Sep 062017
 

By  on September 6, 2017

China Begins Resetting The World's Reserve Currency System

China Begins Resetting The World’s Reserve Currency System

$GLD, $OIL, $CNY

It is a strategic move swapping Crude Oil for Gold, rather than for US Treasuries, which can be printed at will.

A report released by the Nikkei Asian Review indicates that China is prepared to release a RMB Yuan denominated Crude Oil futures contract that is convertible, aka backed by physical Gold.

The contract will enable China’s largest Crude Oil suppliers to settle Crude Oil sales in RMB Yuan, rather than in USDs, and then convert the RMB Yuan into Gold on exchanges in Hong Kong and Shanghai.

This is a significant step in removing the global reserve currency status of USD, and resetting the global economic and geopolitical “landscape.”

Over the past several years, China has quietly established RMB Yuan-based currency exchange facilities, which has set up the ability to implement this new non-USD trade settlement financial instrument.

According to the Brookings Institute, 34 Central Banks around the world have signed bi-lateral local currency swap agreements with the PBOC (Peoples Bank of China) as of the end of September 2016, including the major Crude Oil-producing countries.

With this new contract, China’s largest Crude Oil suppliers will now be able to transact directly with China, and other Crude Oil importing countries, using RMB Yuan which are directly convertible into Gold to settle the trade.

This is a mechanism which is likely to appeal to Crude Oil producers that prefer to avoid using USDs, and are not ready to accept that being paid in RMB Yuan for Crude Oil sales to China is a good idea yet.

Since Y 1973, OPEC Crude Oil has been quoted and traded using USDs, otherwise known as “Petrodollars.”

The “recycling” of petrodollars into US Treasuries has been the life-blood of the US economic and political system. In addition to reducing a major source of funding for the US Government’s enormous deficit spending, the introduction of a Gold-backed RMB Yuan Crude Oil futures contract is an important step toward removing the USD as the world’s reserve currency.

More significantly it re-introduces Gold into the global monetary system.

As the new Gold-backed “Petroyuan” will allow Crude Oil producers to sell Crude Oil for Gold rather than US Treasuries.

Furthermore, it reduces the ability of the US Government to impose its will on the rest of the world. And is a strategic step toward not only ridding the world of its dependence on USDs.

And it also reduced the ability of the US to exert global economic and financially tyranny.

I would also argue that it is 1 of the primary reasons behind the inability of the Western Central Banks to drive the price of Gold lower recently. And they have tried, and tried, and tried.

By Dave Kranzler

 

By Paul Ebeling

 

 

Mike Prettyman Chief Information Officer, Green Fire Engineered Reclamation, Member GreenFire DAO Whatsapp only Phone: 1-602-315-1571 Skype: mike.prettyman Website: http://greenfirefunding.com email: greenfirereclamation@gmail.com

Jun 162017
 

BREAKINGVIEWS-Review: Gold’s financial fascination never dies

by Reuters

Friday, 16 June 2017 13:33 GMT

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

By Kate Duguid

NEW YORK, June 16 (Reuters Breakingviews) – Before winning the presidency and replacing the Oval Office’s red drapes with lamé, Donald Trump was lionizing the gold standard (http://bit.ly/2riEUiS). He wasn’t alone. Campaign rivals Texas Senator Ted Cruz, Kentucky Senator Rand Paul and Ben Carson also backed reviving a policy that had been abandoned by the global financial system 40 years earlier. James Ledbetter’s new book “One Nation Under Gold” helps explain why the outdated idea won’t die.

These Republican presidential contenders were not proposing sincere policies with white papers and serious co-authors. Bullion-backed bucks had been discarded for good reason: it was an impractical constraint that, even when it was the law of the land, had to be abandoned when the United States needed money for war or to combat recession.

No countries in the world operates on a gold standard today; there is no consensus on what a standard would look like or how it would be implemented. And, as Ledbetter puts it: “there will never be enough gold in the world to support the U.S. economy at its current size.”

Yet gold, the book argues, is woven into the American DNA. It is enshrined in the Constitution which says that states may not “make any Thing but gold and silver Coin a Tender in Payment of Debts.” Ledbetter chronicles two centuries of debate over the clause’s exact meaning and its implications for a federally distributed currency. The California gold rush of the mid-19th century established the West as a locus of political and economic power, largely because of the immigration it brought, and the subsequent development of industry. The gold rush became part of America’s founding myth, and for early settlers, evidence of divine providence.

Sound money, as commodity-backed currencies are known, also appeals to an American tradition of small government. A limited supply of gold necessarily limits the supply of money a government can issue, which in theory limits government spending.

Gold remains of interest to Americans not just as a basis for currency, but also as an investment. Though it pays no dividends and, unlike a company, the size of the asset will not grow, the precious metal is still popular, particularly amid economic insecurity. To wit: in 2011, after the financial crisis, gold prices reached an all-time high of more than $1,800 an ounce.

When presidential candidates talk about the gold standard, they’re not just addressing worries about fiat currency, they’re also signaling to goldbug investors who have more faith in a scarce commodity than American industry. One of the more interesting arguments comes toward the end of Ledbetter’s book. “Listening to today’s gold populists, it can be difficult to distinguish between the sales pitch for buying gold and the arguments for gold-backed currency; it seems likely that some of that confusion is a deliberate blurring of passions.” Ledbetter’s account of gold’s association with populism illuminates how these two interests have blurred.

Like bitcoin, gold, as a basis for currency and an investment, appeals to those with little faith in government or the financial system. Anti-gold sentiment in the 19th century and early 20th was associated with the East Coast banking elite, and became linked to big government during Franklin Roosevelt’s four presidential terms. Though the United States didn’t fully abandon the international gold standard until 1971 – a decision made by the Republican administration of Richard Nixon – its limits were clear when Roosevelt decided paper money would no longer be convertible to gold and the dollar became a permanently managed currency.

Enabling the president to adjust the value of the dollar based on economic need arguably helped the United States to recover from the Great Depression. It also linked Roosevelt’s anti-gold policies with what critics deemed to be the socialist programs of the New Deal, as Ledbetter documents. This was enmeshed with a virulent strain of anti-Semitism, and produced a populist movement familiar today: nativist, anti-elitist and anti-government.

The performance of the S&P 500 Index has largely been inversely correlated with the price of gold, affirming our understanding of gold as a safe-haven investment. When faith in the American economy is low, gold prices tend to increase, as was the case in 2011. The trend, however, has been harder to map in 2017. The S&P peaked in June, as Trump’s political crises helped gold hit its highest level since he was elected. While that can be explained by gold’s status as a safe haven, it may also indicate skepticism about the financial system, government and big business that has persisted since the financial crisis.

Though the price of gold fell from its peak in 2011 as the American economy began to recover, it never returned to pre-crisis lows. That may suggest that as long as American populism has life, so does the country’s fascination with the shiny metal.

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Jul 302015
 

Does Cryptocurrency have an intrinsic value?There has been one big issue with these new cryptocurrencies since their beginning and subsequent expanding distribution. How are they valued? Do they hold any intrinsic value whatsoever?

Of course that is not the only issue surrounding them but it is certainly one of the biggest questions asked and also one of the most important ones to reach an understanding about especially if you are thinking about buying into these types of currencies. 

A cryptocurrency only has value in its exchange – it has no inherent value – this is precisely the same as with a ‘conventional’ currency. A dollar is only actually worth what someone is willing to give you in exchange for that dollar.

If everyone were to stop accepting the dollar it would become worthless instantly. This is precisely how the financial market works, if globally the dollar becomes viewed as a bad investment it will ultimately collapse.

Cryptocurrency, just like the dollar, is only worth what someone will exchange for it. There is no Federal Reserve to issue new digital currency, theoretically making it more stable. Bitcoin for example, releases more of its cryptocurrency each year but the exact amount decreases proportionally year after year. The Federal Reserve, however, issues dollars in a reactionary fashion whenever it so chooses. Therefore, the more businesses and people that accept a form of a cryptocurrency – the more stable it will become.

In conclusion you could say that this questions has two answers. One view is that because cryptocurrencies in general are not tied to any physical commodity or other institution giving it a value it can not have any intrinsic value. At the same time the opposite can be argued that actually because it is not tied to any person, organization, country or regulation that can control it, it therefore has an intrinsic value in its ability to avoid being controlled.

I have included a youtube 5 minutes long video “The real value of bitcoin and cryptocurrency technology – The Blockchain explained“ that will explain bitcoin and cryptocurrency in five minutes. In 5 minute this video will demonstrate how blockchain technology will drastically change our lives.