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Time to trash Triffin

Time to trash Triffin

The dollar-based credit bubble is imploding, and emerging economies are seeking protection by accepting trade settlement in other currencies. The US policy of threatening regime change, currency destabilisation, or other means of ensuring nations remain in its sphere of influence are now failing.

Mainstream economists in the West insist the dollar is irreplaceable, and that as a trade settlement medium China’s yuan is strictly limited. Referring to Triffin’s dilemma, China would have to run deficits to provide the necessary currency liquidity. But they ignore the role of bank credit, which can be expanded at will to meet trade settlement demand.

Furthermore, China’s exchanges offer hedging facilities into physical gold, attracting Middle Eastern energy exporters away from petrodollars, until the new trade settlement currency planned by Sergey Glazyev comes into existence.

For evidence of Russia’s intentions to reintroduce gold into trade settlement, a translation of the semi-official position penned by Glazyev jointly with his deputy is appended to this article.

Increasing systemic risk in US, European, and Japanese banking systems is accelerating the movement of international trade settlement away from fiat dollars into safer havens. These are or will be ultimately backed by physical gold.

The world is changing before our eyes…

Quietly, informed opinion is beginning to accept that America has lost its global influence. Even Brazil, Argentina, and Mexico are openly planning for a future where their international trade will turn away from North America and Western Europe to an Asia firmly bound into the rules of China and Russia — rules that insist on evolving payments away from the dollar to their own currencies or into trade settlement currencies being planned.

…click on the above link to read the rest…

The Care and Feeding of a Financial Black Hole

The Care and Feeding of a Financial Black Hole

A while ago I had the pleasure of hearing Sergey Glazyev—economist, politician, member of the Academy of Sciences, adviser to Pres. Putin—say something that very much confirmed my own thinking. He said that anyone who knows mathematics can see that the United States is on the verge of collapse because its debt has gone exponential. These aren’t words that an American or a European politician can utter in public, and perhaps not even whisper to their significant other while lying in bed, because the American eavesdroppers might overhear them, and then the politician in question would get the Dominique Strauss-Kahn treatment (whose illustrious career ended when on a visit to the US he was falsely accused of rape and arrested). And so no European (never mind American) politician can state the obvious, no matter how obvious it is.

The Russians have that pretty well figured out by now. Yes, maintaining a dialogue and cordial directions with the Europeans is important. But it is well understood that the Europeans are just a bunch of American puppets with no will or decision-making authority of their own, so why not talk to the Americans directly? Alas, the Americans too are puppets. The American officials and politicians are definitely puppets, controlled by corporate lobbyists and shady oligarchs. But here’s a shocker: these are also puppets—controlled by the simple imperatives of profitability and wealth preservation, respectively. In fact, it’s puppets all the way down. And what’s at the bottom is a giant, ever-expanding, financial black hole.
…click on the above link to read the rest of the article…

 

 

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