Tin Foil Hats, Economic Reality and the Total Perspective Vortex

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... it was on 7 December 2022, on the first day of Chinese premier Xi Jinping’s multiday visit to Saudi Arabia to strengthen ties in areas such as energy and investment, that back in China, SAFE was simultaneously announcing that the Chinese central bank had begun ‘buying’ gold again.

So you can see that none of this was coincidental. The symbolic intersection of the Chinese Yuan, Middle Eastern energy, and gold, in a visit between two gold loving nations designed to boost multipolarism in the region at the expense of US dominance is clear to see. This was China again saying “I’ll see your hand and I’ll raise it with some gold”. But this time there is a lot more at stake than joining the SDR or negotiating a trade war. This time China and Saudi are sowing the seeds of a future PetroYuan and reminding the world that it could be linked to gold.
...
The reality is that China is probably accumulating gold all the time, and has never stopped accumulating, both on the international market as well as from undisclosed domestic production. While these monthly ‘purchases’ could be fresh buying internationally, they could just as easily be some of the Chinese state’s existing gold holdings being reclassified as PBoC gold.
...
... the monthly China gold ‘purchases’ which we will probably see in the coming months will do just enough to keep China’s gold reserves on everyones’ radars, as a portion of the world shifts towards a multipolar monetary future.

 

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Saudi Arabia is open to discussions about trade in currencies other than the US dollar, according to the kingdom’s finance minister.

"There are no issues with discussing how we settle our trade arrangements, whether it is in the U.S. dollar, whether it is the euro, whether it is the Saudi riyal," Mohammed Al-Jadaan told Bloomberg TV today in an interview in Davos, Switzerland.
...


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2022 was a very busy year for central bank digital currencies (CBDC), with the number of countries developing a CBDC rising to 114 by the end of December and representing 95% of global GDP. Some central banks, like those of Saudi Arabia and Tunisia, have chosen to focus their energies on the development of a wholesale central bank digital currency (wCBDC), designed to enable commercial banks and other financial institutions to settle transactions between one another. Others, such as Norway, Turkey and Russia, have opted for the more ambitious target of a retail CBDC (rCBDC) designed to be used at every level of the consumer economy.

Some countries, most notably China, advanced their CBDC programs dramatically over the course of the year, and are now solidly in the real-world implementation phase, while others like Indonesia have only begun to study their feasibility. As of January 2022, Ecuador is the only country to formally abandon their CBDC program to fully embrace the decentralized potential of cryptocurrencies like Bitcoin.

But as economist Richard Werner told Kitco News, much of the real action on CBDCs in 2023 will remain hidden from the public eye. "The CBDC project is a long-term project, and that means even if we don't see too many concrete, big moves forward in 2023, that doesn't mean nothing's happening right behind the scenes.
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I wish I knew what this meant for us stackers.

Anyone have a crystal ball?
 

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I wish I knew what this meant for us stackers. ...
No crystal ball, but my expectation is:

Should CBDCs be well received - physical metal (stacks) will continue to be attractive liquid assets for storing wealth. Not much different from today

Should CBDCs be rejected - either fiat paper returns us back to day's status quo, or stacks become immensely popular for black market bartering
 

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Back in September (post # 641) and October, news broke on some projects aiming to develop an alternative to SWIFT for CBDCs. Looks like there is another contender throwing a hat into the ring:

The ambitious new Universal Digital Payments Network (UDPN), which is designed to provide interoperability between fiat-backed stablecoins, central bank digital currencies (CBDCs), and regulated protocols was launched earlier today at the World Economic Forum in Davos, Switzerland.

UDPN was developed by Red Date Technology, which also developed BSN, China’s state-backed blockchain network, together with German IT solutions provider GFT, Japanese electronics firm TOKO and U.S. law firm DLA Piper.

“The purpose of UDPN is to investigate a potential alternative to existing payments systems by enabling interoperability between fiat-backed tokens of stablecoins and regulated protocols,” said Marika Lulay, CEO of GFT. “The decentralized approach and geographic breadth of participating firms, combined with the advanced technological solution deployed for these trials, set this network apart.”
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Brazil and Argentina will this week announce that they are starting preparatory work on a common currency, in a move that could eventually create the world's second-largest currency bloc.

South America's two biggest economies will discuss the plan at a summit in Buenos Aires this week and will invite other Latin American nations to join.

The initial focus will be on how a new currency, which Brazil suggests calling the "sur" (south), could boost regional trade and reduce reliance on the U.S. dollar, officials told the Financial Times.

It would at first run in parallel with the Brazilian real and Argentine peso.

“There will be ... a decision to start studying the parameters needed for a common currency, which includes everything from fiscal issues to the size of the economy and the role of central banks," Argentina’s economy minister Sergio Massa told the Financial Times.

"It would be a study of mechanisms for trade integration," he added.

"I don’t want to create any false expectations. ... It's the first step on a long road Latin America must travel." ...

https://www.ft.com/content/5347d263-7f24-4966-8da4-79485d1287b4

h/t: https://gata.org/node/22400
 

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Russia’s intentions are clarifying​

Jan 26, 2023 · Alasdair Macleod


We have confirmation from the highest sources that Russia and the Shanghai Cooperation Organisation (SCO) are considering using gold for pan-Asian trade settlements, fully replacing dollars and euros.

In an article written for Vedomosti, a Moscow-based Russian newspaper published on 27 December, Sergey Glazyev, a prominent economic adviser to Vladimir Putin who is heading up the Eurasian Economic Union committee charged with devising a replacement for dollars in trade settlements sent a very clear signal to that effect. It appears he will drop earlier plans to design a new commodity-linked trade currency because it has been superseded.

More:

 

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Chinese media says that China and Russia are weaponizing gold.


news broke on some projects aiming to develop an alternative to SWIFT

Long post addressing some current developments with reserve currency machinations:


UAE looking to settle non-oil commodity trading with India in Rupees.



Russia and the Shanghai Cooperation Organisation (SCO) are considering using gold for pan-Asian trade settlements, fully replacing dollars and euros.


If all this stuff comes to pass and is shown to be workable, who is going to be buying US bonds so that our gov can still pay it's bills?

Will the gov start requiring all 401k's and ira's to be invested in gov bonds?
 

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The second-largest currency bloc in the world began taking shape in South America this week, and the world’s foremost economic minds are baffled.

Brazil’s and Argentina’s presidents confirmed their plan to create a common currency provisionally called the “sur” in a joint op-ed published in Argentinean newspaper Perfil last Saturday. Brazil’s newly inaugurated President Luiz Inácio Lula da Silva arrived in Buenos Aires Monday for a summit with his Argentinean counterpart President Alberto Fernández, where the two will discuss strengthening trade ties as well as plan the new currency bloc, which other Latin American countries are being invited to join.

“We decided to advance discussions on a common South American currency that can be used for both financial and commercial flows,” the two leaders wrote in their op-ed, adding that a common currency would shield both countries against external forces and vulnerabilities. On Monday, Brazil President Lula told reporters the common currency would help reduce the region’s reliance on the U.S. dollar by facilitating trade.
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“I’m surprised by idea of a common currency for Brazil & Argentina,” former U.S. Treasury Secretary Larry Summers wrote on Twitter Monday, adding that the plan was “highly problematic” given the economic differences and lack of political alignment between Brazil and Argentina, shared run-ins with populist political movements, and issues with fixed exchange rates.

Summers conceded he is no specialist in Latin American economies and invited other experts to comment, but even developmental economists and authorities in South American economies have been scratching their heads at the move.

“This is insane,” Olivier Blanchard, a French economist and former chief economist for the International Monetary Fund, wrote on Twitter Sunday, while José De Gregorio, a Chilean economist and the country’s former minister for the economy and governor of its central bank, called the idea a “total waste of time” on Monday.

“The announcement of a single currency is the most absurd thing I have heard and not very credible,” De Gregorio told local outlet Radio Infinita. He compared the plan unfavorably to the euro, which unlike in Latin America began with a “very deep economic union” between countries. He also warned that Brazil risked unsettling its monetary policy by integrating its currency with Argentina.
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~~~

Russian Foreign Minister Sergey Lavrov said on Wednesday that Brazil, Russia, India, China, and South Africa – BRICS countries – will discuss creating a common currency at the group's forthcoming summit this August in South Africa.

"Serious, self-respecting countries are well aware of what is at stake, see the incompetence of the 'masters' of the current international monetary and financial system, and want to create their own mechanisms to ensure sustainable development, which will be protected from outside dictates.

"It is in this direction that the initiatives that have been voiced recently ... about the need to think about creating our own currencies within the framework of BRICS," he told a news conference after a meeting with Angolan President Joao Lourenco in the capital Luanda.
...

 
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