READER THOUGHTS ON “RENMINBI AND THE ALTERNATIVE IMF REFORMS”
Juliennejocon NOVEMBER 11, 2014 AT 10:23 PM I was wondering what plan B might be. We will wait with anticipation on the outcome. Thanks JC
Casey Ciccarello NOVEMBER 11, 2014 AT 11:36 PM So renminbi is a good hedge against the dollar deflation? And the global deflation as you state in earlier posts?
Or is it subject to the same fate of the impending liquidity crisis? Sorry to ask my first question on this blog with such directness, please don’t think me rude.
But, I, like others find your posts very logical and informative and check in often to see when you post your next bit. Not to minimize what you do but it seems you are really building up an important subject that has got me “hooked”! Respects CBC
JC Collins NOVEMBER 11, 2014 AT 11:46 PM It may be, but also just as likely to be subject to the liquidity crunch. Sorry for not giving you a definitive answer either way, but there are still many variables at play here. As in any venture, diversification has the highest probability of a equitable outcome.
Arie L'or (@Trident_one) NOVEMBER 11, 2014 AT 11:39 PM Usualy the problem with baskets is that, if there is one rotten apple in a basket, the rest gets infected too.
JC Collins NOVEMBER 11, 2014 AT 11:42 PM They put the good ones on top though so they can sell it. It’s only after that the buyer realizes they were had.
Robert NOVEMBER 12, 2014 AT 10:02 AM My only observation of your writing has and continues to be: that you seem to feel that the forces that have always controlled the world will continue to control the world and mankind has only misery and abject slavery to look forward to…depressing and for those that hope in a better vision, not true. I continue to look forward to finding out who is right.
JC Collins NOVEMBER 12, 2014 AT 12:21 PM Mankind as a whole is responsible for its condition.
This state of misery as you put it is the externalization of Mans internal deficiencies. Change must be achieved internally and individually so the whole can transition to this “better vision”.
It’s not a matter of right and wrong Robert, its a matter of understanding. We are the cause of our own enslavement and we are also the solution we have been waiting for.
Nothing or no one is going to save us from ourselves but us. Each new system will be a continuation of the one that came before it until Man can make this change.
I’m assuming that you are not relinquishing your ability to change or transition to someone or something else? You are ready to help Mankind transition to this “better vision”?
daniel grig (@gelingrig) NOVEMBER 12, 2014 AT 10:50 AM This is the trick. We are selling the “product” yuan-DEG, as a solution, not ideology.
The ideology behind this product will be visible after consuming the product, it is too late.
The same happened with the dollar – as the global reserve currency. It was sold as an international solution as the only path out of the problem and now we realize the trap, too late.
The Chinese will feel the consequences of their own skin for many years.
Jack Jackson (@hugovictor54) NOVEMBER 12, 2014 AT 2:06 AM Dear J.C.: Ok, how about this one. If the U.S. and the G20 accepts the IMF reforms and the SDR bonds and the rest would the Federal Reserve still be in a position to set domestic interest rates or will it have surrendered that authority to a higher authority? Would QE be something the Fed could continue to do, or would that to be regulated at the international level? What think J.C.? Pdog
Dripfood NOVEMBER 12, 2014 AT 7:48 AM What makes you think QE wasn’t already regulated at the international level?
Jack Jackson (@hugovictor54) NOVEMBER 12, 2014 AT 1:48 PM Dear Dripfood: Hey, I like that, you are of course quite right. I suppose what I am trying to say is something like this. Will the newer system prevent the kind of monetary expansion that we have witnessed over the last several years?
I believe that J.C. has stated the QE here and around the world was more a preparation for the new system which would tend to mean QE as we have known it would discontinue with the beginning of the new system. So let’s say that QE will end pretty much for good. But what of interest rates?
The Fed loans it’s money out for very little return if any and if my facts are right rates at many of the central banks around the world are extraordinarily low.
Would that situation begin to reverse with the beginning of the new SDR bond program?
And what of this liquidity crisis? Just how deep is this going to go? J.C. I believe tends to think that it will be short lived, (although he refers to it as the “harvest”). I am sorry to think that the financial system will contract greatly and the “harvest” tremendous. What’s says you? Pdog
JC Collins NOVEMBER 12, 2014 AT 2:14 PM In regards to your original question, central banks such as the Fed will maintain the illusion of autonomy and it will appear that their domestic policies on interest rates and everything else will be a natural progression and response to on-going events.
This is how it has been and it will continue as such. The source of liquidity will change on the macro level as the world moves away from the USD denominated system. QE, defined as method of exchanging illiquid assets for high liquidity assets will discontinue in its present form.
The Fed, as well as other central banks, will likely exchange these illiquid assets on their books for SDR assets. QE was a method of preparing the system for massive SDR bond allocation and exchanges through substitution accounts. Interest rates will increase in time.
Jack Jackson (@hugovictor54) NOVEMBER 12, 2014 AT 3:09 PM Yes J.C. that’s all good for the banks, But a forty to sixty percent devaluation of the dollar in fairly short order which I believe you articulated, and a “liquidity crisis” and maybe a little austerity from the IMF on the US social safety net adds up to huge social problems down here in the lower 48. A lot of “folks” aren’t real happy as it stands now.
I don’t see this as a smooth transition. Do you have an opinion as the cultural transition the U.S. might undergo? Sincerely, pdog
JC Collins NOVEMBER 12, 2014 AT 3:46 PM The cultural transition has already been taking place and the reaction of the disorganized masses has been so manipulated and directed that it’s hard to tell what is a natural outgrowth of frustration and what is engineered.
At the end of the day, the dollar, and all currencies, continue to devalue through inflation. As such, the USD has already devalued a lot over the last few years. It will become more apparent as the new exchange rate regime slowly emerges. The reference point is shifting from the USD.
A correction to the equity markets is coming and I would suspect that most are not going to be happy about it.
I’m expected a 30% correction in the real estate market here in Canada, especially in Vancouver once the slow down in China deepens and investment from across the ocean decreases, and most are not going to come out of it in the positive.
But what can anyone do outside of understanding how the system works and transitions so that next time we are smarter. The “fall of the Berlin Wall moment” I mentioned previously may very well be the implosion of American cultural and institutions.
We are already seeing the beginnings of this CSI as once iconic symbols of American growth and prosperity are declining in both prestige and profits.
Companies and institutions that wanted to remain intact had to move offshore in the hopes of avoiding the implosion of American culture. This comment is getting long so perhaps I should write a post about it. Thanks Jack.
Jack Jackson (@hugovictor54) NOVEMBER 12, 2014 AT 6:24 PM Dear J.C. Wow! Pdog
dripfood NOVEMBER 12, 2014 AT 6:59 PM Me thinks cultural transitions are slower in real life than they appear on paper. On top of that, smart parasites seldom risk upsetting their hosts too much.
Brand new grazing pastures await the parasitic elite in ‘the east’ and ‘the south’. The infrastructure for debt-irrigation is being finalized as we speak in these quarters of the globe.
The western pastures will probably be laid waste for a short while, for the grounds are exhausted after several decades of continuous harvest. But then again, maybe parasitic elites can genetically change when exposed to light from the right angle.
Cadwaladr NOVEMBER 12, 2014 AT 3:10 PM With regard to RMB becoming fully convertible, these old news stories about convertibility being planned for 2015 received very little coverage at the time, or since:
There was a similar report about a year later, quoting a named Chinese official:
tristero888 NOVEMBER 12, 2014 AT 3:24 PM another chip in the armor:
Hong Kong to scrap daily yuan conversion limit to boost stock investment (in China)
cadwaladr NOVEMBER 12, 2014 AT 10:50 PM It is clear that the Americans are actively preparing for civil unrest when SHTF:
I have also seen it suggested that they will use fear of ebola to impose martial law to lock down the population ahead of the fan being hit. Sounds far fetched I know, but we are in uncharted waters.
Rick Shade NOVEMBER 12, 2014 AT 11:09 PM When you look at it….the bankers are still going to be in control. What will happen is a settling of accounts in the US. Once the SDR takes a real hold, the dollar will be about as desirable as a brown thing in the punchbowl…
The solution is merely a sleight of hand…where the gold is STILL in the hands of the bankers…..lol
The US dollar will be worth less, yet the price of homes will continue to drop…supposedly. these two forces will counteract eachother, because houses are houses….and ya gotta denominate them in something.
If in fact deflation in housing continues, it means that dollars will disappear, and people will get MUCH poorer. This may be why some think there will be a new T-note issued by the US, and the federal reserve bought by the Chinese.
The T-note issued by the US for the schmoes in the US… (us)….will continue to drop in value, since no gold, industry, or much else can support it.. (oops….aircraft carriers)
The fly in the ointment is the unpredictability of the US people with guns. I don’t think they have that quite worked out….but Bubba ain’t gonna like it….and he will smell a banker rat….he may flail out at the wrong guys, but flail he will. I doubt it will be “good times”…
chuc1997 NOVEMBER 12, 2014 AT 11:45 PM If the gold is in the hands of the bankers (and it is), explain to me again why they are not going to revalue it significantly higher to recollateralize the system?
JC Collins NOVEMBER 13, 2014 AT 12:04 AM Why would they? What you are suggesting is not an absolute and in fact is extremely unlikely to happen. So many people have lost both large and small fortunes based on the salesmanship of PM sellers and their propaganda associates.
This dream and delusion of $10,000 gold and $5000 silver is sadly fading away into the shadows of departed profits. The PM sellers have been unloading as much as possible since the highs a few years back.
The frantic selling and propaganda have resulted in some entertaining debates and fear based decision making, but unfortunately regular people who believed the BS have lost fortunes while the PM sellers have profited. The lows have not been reached yet and more will continue to be lost.
At some point people must awaken from the sales trance they have been put under by false information and bad data trending and straight out misleading information.
No central bank or country is going to “revalue it significantly higher to recollateralize the system”.
I promote PM’s as a base structure investment for a life time of participation, but not for a get rich quick scam that attempts to convince unknowledgeable people that gold is going to the moon.
The PM sellers that have promoted this falsehood are just as guilty as the international bankers for scamming and fleecing the masses.
Susan Morris NOVEMBER 13, 2014 AT 12:04 AM @JC: Is this just more of the same, getting the IMF solution accepted?
JC Collins NOVEMBER 13, 2014 AT 12:15 AM It appears so Susan. At least at a glance. It also hints at the method of money creation, or a change in the method, as governments become either lender or borrow to the IMF, and money is created by production in the economy.
This is likely why tax regulations have to be adjusted. The GDP of each country will dictate the lender or borrower status of each country, as the countries infrastructure projects are funded by SDR bonds.
GDP will dictate SDR quotas and countries will be prevented from overspending and running massive deficits. As discussed in a previous post, Turkey has been the poster child for this transition.
Susan Morris NOVEMBER 13, 2014 AT 12:34 AM thank you
Cadwaladr NOVEMBER 13, 2014 AT 12:51 AM Not sure I agree with you about gold, JC. Revaluation worked well for the US in The Great Depression (1934 Gold Reserve Act); and it’s always seemed to me like a no-brainer from the bankers’ point of view as part of the solution to the current depression, bank insolvency excess debt problems, too.
Wouldn’t surprise me at all if, when they have induced as many holders as possible to puke their metal as a result of financial repression, gold were re-valued upwards – perhaps at the point where it is added to the SDR?
JC Collins NOVEMBER 13, 2014 AT 1:39 AM I agree that gold will revalue upward again at some point and it likely will be added to the SDR basket as well.