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Monday, April 27, 2015

Late Sunday Night Jester Chat: "SDR's, Silver, Gold and The US Dollar"

Jester’s Place:

[catz] Jester, on DR, Bulldogs says, Gold will reset first, then the CE follows shortly thereafter. Monitor Shanghai. Should we be looking for things to start in Shanghai at the new gold exchange?

[Jester] catz THAT IS A STATEMENT OF OPINION YES?

[catz] That is Bulldogs opinion not mine.

[Jester] THIS IS SHORT.... LET'S START WITH THIS... MAYBE IT ANSWERS THAT STATEMENT THAT WAS NOT A QUESTION TOO....

[Jester] Gold, The SDR, & BRICS
....
[Jester] Last Monday there was a meeting in Washington hosted by the Official Monetary and Financial Institutions Forum (OMFIF) to discuss the future relationship, if any, of gold with the Special Drawing Rights (SDR).

[Jester] NOW I HAVE NEVER HEARD OF THAT GROUP.... BUT THE INFORMATION IS INTERESTING...

[Jester] Also on the agenda was the inclusion of the Chinese renminbi, which seems certain to be included in the SDR basket in this year's revision, assuming that the United States doesn't try to block it.

[Jester] WELL OKAY... WHATEVER...

[Jester] This is not the first time the subject has come up. OMFIF's chairman, Lord Desai wrote a paper about it after the last Washington meeting on gold and the SDR exactly four years ago. The inclusion of the renminbi in the SDR was rejected in 2010 because of inadequate liquidity and is due to be reconsidered this year.

[Jester] Desai pointed out in his paper that there are difficulties when it comes to including gold, because (and I think this is what he was trying to say) none of the SDR's paper constituents are convertible into gold, but gold's inclusion in the SDR would make them convertible through the back door. However, Desai seemed keen to re-examine the case for gold.

[Jester] It should be pointed out that if gold is included in SDRs the arrangement cannot be long-lasting so long as the major central banks insist on printing money as an economic cure-all. However, China's position with respect to gold and her own currency could be a different matter.

[Jester] The Chinese government has almost certainly accumulated large amounts of gold yet to be included in her reserves, and she has also encouraged her own citizens to own gold as well. We can therefore be certain that China sees a monetary role for gold while at the same time she is pushing for the renminbi to be included in the SDR basket.

There is no doubt, if you read the IMF papers from the last SDR review in 2010 that the renminbi does now fulfill the criteria for inclusion today. So the question then is will the advanced nations, which dominate the IMF's membership, permit the renminbi's inclusion, and will the US, which has dragged its heels on giving China and the other BRICS nations a greater shareholding in the IMF, relent and permit these reforms, which were accepted by the other members back in 2010?

[Jester] The Americans' blocking of reform signals her desire to preserve the dollar's hegemony; but given she lost out spectacularly over the creation of the Asian Infrastructure Investment Bank, IMF reform could become the next serious threat to the dollar's dominance. And if America does not back down over the IMF and the SDR, she will have no fall-back position; China on the other hand still has some aces up her sleeve.

[Jester] One of them is gold, and another is her role in a rival organization established by the BRICS. The New Development Bank (NDB) is in the final stages of being set up, driven by frustration at America's attempts to protect the dollar's role and to keep the IMF as an exclusive club for advanced nations. Instead, the NDB could easily issue its own version of the SDR with the gold lining Desai referred to in his original paper.

[Jester] HIGHLIGHTED...

[Jester] The reason this would work is very simple. The BRICS members, unencumbered by the cost burden of modern welfare states could exercise the monetary restraint required to tie their currencies to gold, perhaps running a Bretton-Woods-style gold-exchange arrangement between member central banks to stabilize their currencies.

[Jester] However, the NDB would almost certainly want to see the gold price considerably higher if it is to play any part in a new rival to the SDR. Other BRICS members would be encouraged to make sure they have sufficient gold on board by selling US dollar reserves to buy gold, ahead of any decision to go ahead with a new super-currency.

[Jester] YA THINK THIS MAY BE WHAT IS GOING ON NOW?

[Jester] It would appear the era of the dollar's global domination as a reserve currency is coming to an end, and the stage is now being set for gold to be officially accepted as the ultimate reserve money once again, this time by the next generation of advanced nations.

[Jester] IT IS WHAT IT IS... THIS IS THE WAY THINGS ARE TRACKING IN MY OPINION...
http://ift.tt/1IVXAr0

[Jester] NOW... I DO NOT THINK THAT IS THE PREDECESSOR.... I THINK IT IS THE RESULT... BUT THAT IS MY OPINION...

[Jester] I DO NOT THINK WE ARE WAITING ON THE GOLD TO MAKE A MOVE... I THINK WE ARE WAITING ON THE CURRENCIES TO RESET TO IT...

[Jester] BULLDOG REFERENCES A JIM WILLIE THINGIE IN HIS POST... AND I WILL TELL YOU THAT IT IS A GOOD LISTEN... BUT I AM NOT SO SURE HE IS UP TO SPEED ON THE BACKGROUND OF THE RESET ALREADY UNDERWAY...

[Jester] IF WHAT I AM HEARING IS TRUE WE WILL NOT HAVE TO WAIT FOR THE GOLD TO ADJUST THE THING... IT WILL CERTAINLY BE A RESULT OF THE RESET.... BUT NOT WHAT CAUSES IT...

[LdyFaith] Jester,,, it makes sense,,,and is pretty much you have said would happen

[Ilyaa] Jester I have a friend who is in the banking industry and has been traveling worldwide to "revamp" the entire banking and financial system and he's said that the project funding would go FIRST and then the RV/GCR would happen sometime after that! Do you concur with this???

[Jester] HERE IS ANOTHER GOOD ARTICLE... AND WHILE I AM AT IT LET ME TELL YOU GUYS THAT REDWOLF FED ME ALL THIS INFORMATION EARLIER TODAY... HE DESERVES THE CREDIT FOR FISHING ALL THIS OUT....

[Betsy Ross] yay Redwolf!!!

[Hannah] Jester Please tell Redwolf hello and thank you!

[stillwacko] Thanks Redwolf

[Jester] I AM JUST THE MOUTHPIECE.. HE IS THE RESEARCHER.... AND A DANG GOOD ONE AS YOU ALL KNOW...

[Jester] LETS GO HERE FOR A MINUTE...

[Jester] WILL BE INTERESTING IF NOTHING ELSE...

[Jester] What Will Happen To You When The Dollar Collapses?

[Jester] I AM GUESSING EVERYONE IS CERTAINLY INTERESTED IN THAT....

[Jester] YES NO MAYBE?

[jojill] Yes

[LH] yes

[kirbycat94] Jester yes, yes i am

[Jester] Historically, when a nation’s debt exceeds its ability to repay even the interest, it can be assumed that the currency will collapse. Typically, governments exacerbate the situation by printing large amounts of currency notes in an effort to inflate the problem away, or at least postpone it.

[Jester] ISN'T LIKE WE HAVE NOT SEEN THAT IN THE PAST FEW YEARS IS IT?

[cassey3] yes!!!

[Jester] The greater the level of debt, the more dramatic the inflation must be to counter it. The more dramatic the inflation, the greater the danger that hyperinflation will take place. No government has ever been able to control hyperinflation. If it occurs, it does so quickly and always ends with a crash.

[LdyFaith] Absolutely

[Jester] Although there are observers (myself included) who frequently discuss what a reserve-currency crash would mean to the world, there is little or no discussion as to how this would impact people on the street level, and perhaps that discussion should begin.

[Jester] When currencies crash, the state often tries to float a new currency. Sometimes, it’s accepted, sometimes not. Generally, the people of the country (and those trading within the country) move immediately to “the next best thing.” In 2009, when the Zimbabwe dollar crashed, several currencies were used, but the US dollar was the clear favorite, as it was the world’s reserve currency and therefore the most “spendable” currency.

[Jester] WHO? YIKES!

[Jester] Not surprisingly, the Zimbabwean government fought the use of the dollar, as they wanted to retain control of the economy and the people. People were therefore penalized for using the US dollar and other currencies.

[Jester] And that’s what most governments do, but here’s where that idea usually falls down: First, the “black-market” currency is so desired by the now-jaded citizens that they do all they can to avoid the new official currency. Soon, most transactions, although illegal, are undertaken in the black-market currency. Second, since no one really wants the new currency, even the political leaders are soon using the black-market currency.

[Jester] NOW... YOU GUYS HAVE BEEN HEARING JIM WILLIE TALK ABOUT THE SHIESSE DOLLAR RIGHT? WELL THERE YA GO....

[Jester] Ultimately, the black-market currency is legalized (since it’s the only truly workable solution), and it often becomes the unofficial currency, if not actually the official one.

[Jester] It’s safe to say that the EU, the US, and quite a few other jurisdictions are nearing currency crashes, and in all likelihood, the euro will go before the dollar. So, unless the EU has already prearranged a new euro, the US dollar might well be chosen as an immediate solution to the problem, as the US dollar is presently recognized and traded throughout Europe. Therefore, a relatively painless transfer could be made.

[Jester] However, the dollar, which is presently praised as being a sound currency, is really only sound in relation to the euro (and some other lesser currencies). Once its less stable brother, the euro, collapses, the dollar will be exposed.

[Jester] As the US dollar is a fiat currency and is on the ropes, the US (and any other country that is using the dollar as its primary currency when the time comes) will experience a currency emergency at the street level that will be unprecedented.

[Jester] The big question that is generally not being discussed is: The day after the crash (and thereafter), what will be the currency that is used to buy a bag of groceries, a tank of petrol, a meal at a restaurant? Certainly, the need will be immediate and will be on a national level in each impacted country, affecting everyone.

[Jester] ENTER THE SCHIESSE DOLLAR...

[Jester] NOW LET ME INTERJECT SOMETHING HERE... A MINUTE PAUSE IF YOU WILL...

[Jester] WHILE I RESPECT JIM WILLIE AND HIS STUFF GREATLY... I DO NOT THINK THE REPUBLIC IS ON HIS RADAR.... JUST SAYING...

[Jester] SO... WITH THAT IN MIND LET US CONTINUE...

[Jester] I have discussed for some time that the US will be prepared ahead of time with a new, electronic currency. This will serve three purposes:

[Jester] 1. It will allow the US government to blame paper currencies for the crash, in order to distract the public from recognizing that the government itself is the culprit.

[Jester] 2. It will allow the US government to create a currency system that disallows the holding of tradable currency by the population—that is, a debit card would be created by banks through which all transactions must pass, assuring that all transactions are processed by (and thereby subject to the control of) a bank.

[Jester] HOLD THAT THOUGHT... BECAUSE THIS IS ALREADY HAPPENING... BUT THAT IS ANOTHER SUBJECT WE WILL GET TO IF WE DO NOT RUN OUT OF TIME...

[Jester] 3. It will allow the US government to have knowledge of every penny earned and spent by any individual or organization, allowing for direct-debit income taxation.

[Jester] HMMMM.... NOW I AM NOT SO AGAINST THAT AS LONG AS IT IS ACROSS THE BOARD.... BUT AGAIN... ANOTHER TOPIC....

[Jester] If the US does institute such a system, US citizens will then become the most economically controlled people in the world, overnight.

[Jester] AND THAT DOES NOT SURPRISE ME EITHER...

[Jester] It’s likely that a black-market system would spontaneously be created by US citizens in order to bypass the new government system. A portion of daily trade would occur under the table. It would unquestionably be made illegal, and we can only speculate as to how prevalent it would become: 10% of all transactions? 30%? Anyone’s guess. Certainly, the government would crack down, and penalties might become severe.

[Jester] LIKE IF WE TRIED TO PAY IN GOLD OR SILVER UNDER THE TABLE... JUST SAYING...

[Jester] Elsewhere in the world, there would be greater freedom, but what would their currencies be? There are many countries that presently use the US dollar as one of their official currencies. After a crash, the greater the link to the US dollar, the greater the loss of economic freedom, although, in most such countries, the government is likely to be less efficient than in the US, which would work in favour of the individual.

[Jester] Such countries would also have the option of switching from the dollar to another dominant currency. With the euro and dollar gone, that currency might be the Chinese yuan. The difficulty with this possibility is that, presently, the yuan is not in common use on the street.

[Jester] Adoption of a currency such as the yuan would require a sudden switch in monetary policy, complete with teething problems. However, recent developments amongst the BRICS and others indicate that many countries are already seeing the writing on the wall and are readying themselves for the use of the yuan as an alternate.

[Jester] YA THINK?

[Jester] A Return to Precious Metals as Currency?

[Jester] A further possibility is taking place in Mexico today. Mexico is re monetizing silver. A one-ounce pure silver Libertad coin will function in parallel to (and be interchangeable with) the existing paper peso. Banks will value the Libertad daily, based upon the silver price. Thus, Mexico will create a legal way for its citizens to protect themselves against devaluation of the peso, whilst creating an internal protection against currency crashes in other countries.

[Jester] HIGHLIGHTED....

[Jester] If the Mexican government remains consistent in its plan, it will do more than simply help stabilize Mexico economically; it will serve as an example to other countries that when the Goliaths of the euro and US dollar fall, there is a very sound alternative.

[Jester] Further, the more countries that follow this policy, the more silver (and for that matter, gold) would become an international currency. It would matter little to a petrol station owner in Canada, Australia, or Chile whether his till was filled with coins marked, “Mexico,” or whether they said “Iceland,” “New Zealand,” or “South Africa.” After all, an ounce of silver is an ounce of silver, no matter what the issuing country is.

[Jester] As the Great Unraveling proceeds, we would be wise to monitor what happens with the Libertad in Mexico and watch for a similar return to precious metals in other jurisdictions. As this development progresses, we might wish to consider that, whatever jurisdictions are the most forceful in demanding the continued use of doomed paper currencies (or, worse, transferring into electronic currencies), we may choose to store our wealth, no matter how great or small, in a safer jurisdiction. Further, we may choose to reside in a jurisdiction where a currency crisis will be less likely to occur; to live under a government that does not seek to monitor and tax our every economic transaction.

[Jester] HOW ABOUT THE STATES? THAT IS GOING ON IN SOME ALREADY.... THINK THEY HAVE A CLUE WHAT IS GOING ON? JUST SAYING....

[Jester] LINK TO THE ARTICLE...  http://ift.tt/1EDIGYA

[Jester] SO.. IT SEEMS AS IF IT IS A LOT BIGGER PICTURE THAN FIRST REPORTED... WHAT DO YOU THINK NOW?

[LdyFaith] Jester,,, the question of the states was my first thought,,,metals are already legal currency in TX I think

[Jester] LdyFaith I DO NOT THINK SO.... BUT I THINK THEY ARE SET UP FOR IT....

[Jester] With Gov. Rick Perry’s signature in June, H.B. 78 became law in Texas. Gold and silver currency and bullion no longer incur the state’s 6.25 percent sales tax, which has been applied to purchases under $1,000. This is the first time a state has expanded an existing sales tax exemption for gold and silver.

[Jester] YOU DO NOT PAY STATE TAX ON BUYING GOLD AND SILVER....

[Jester] PAVING THE WAY FOR IT TO BE USED AS TENDER...

[LdyFaith] Jester,,, thanks,,, I knew they were working on it

[Jester] THERE ARE 11 STATES WORKING ON SOME FORM OF THIS...

[kirbycat94] Jester sounds like we're headed in the right direction for sure!

[Jester] DOES THAT ADD SOME CLARITY TO THE ORIGINAL QUESTION AT ALL?

[Jester] kirbycat94 WELL 11 OF US ARE.... TENNESSEE INCLUDED... HAHAHAHAHA

[LdyFaith] Jester,,, adds much clarity

[caro] Jester yes it does

[kirbycat94] Jester, well that goes without saying! TX & TN. Wickedly smiling

[catz] Yes it does. Thank you.
[Jester] AND YOU GUYS HAVE SEEN THE ARTICLES RECENTLY ON BANKS INCREASINGLY REFUSING CASH WITHDRAWALS... IT IS ONLY GOING TO GET WORSE....

[Jester] THEY DO NOT HAVE THE MONEY ON HAND TO PAY PEOPLE OUT...

[diditrvyeet] Jester i never thought this through before and there might be an easy answer, but if silver/gold can be used, say to buy gasoline, how does the fluctuating price of pm play on these type of daily purchases if paying with coins

[Jester] diditrvyeet NOTHING MORE THAN A DAILY EXCHANGE RATE SAME AS THE EXAMPLE FOR MEXICO... GO BACK AND READ THAT PART...

[diditrvyeet] Jester ok

[Jester] IF YOU HAVE EVER TRAVELED ABROAD... EVERYONE KNOWS THE PREVAILING EXCHANGE RATE DAILY...

[Jester] WHEN I WAS IN GERMANY PAYING WITH DOLLARS THEY CALCULATED IT RIGHT IN FRONT OF ME EVERY TIME I BOUGHT SOMETHING....

[Jester] OTHER COUNTRIES ARE ALREADY USED TO THIS SCENARIO...

[Jester] I WAS PROBABLY GETTING RIPPED OFF EACH TIME BECAUSE I HAD NO IDEA WHAT THEY WERE DOING.... LOL

[Jester] HECK... WE WENT TO BELGIUM ON WEEKEND... AND WE LIKED TO GET SOME GAS... AND TWO ZEROS WERE STUCK ON THE PUMP WITH STICKERS AFTER THE PART THAT WAS GOING AROUND AND AROUND...

[Jester] HAHAHAHA

[Jester] AND IT ADDED UP TO SOME BIZARRE NUMBER FOR A TANK FULL OF GAS....

[Jester] TWICE ASKED ME WHAT WE OWED AND I TOLD HIM... I HAVE NO FRICKING IDEA BUT WE ARE GOING TO NEED A WHEELBARROW FULL OF THEM.... HAHAHAHAHA

[LdyFaith] Hmmmm,,, they solved "deleting the zeros",,,with stickers hahahaha

[goodtimes] Jester hahaha that is too funny

[Jester] THEN WE HANDED THEM SOME DEUTSCHMARKS AND THEY GAVE US SOME BACK AND WE HAD NO IDEA WHAT WE PAID BUT WE HAD A FULL TANK OF GAS.... LOL

[kirbycat94] Jester that's so funny, am cracking up!

[kirbycat94] Jester, well there ya go! BTW, Were you drinking?

[Jester] kirbycat94 WELL WE WERE 4 AMERICANS IN BELGIUM ON THE WEEKEND TRIP FROM GERMANY... HMMMM...

[Jester] HAHAHAHAHA

[kirbycat94] Jester, yeah, that's what I thought! Hahaha

[Jester] THAT STORY IS JUST TO SHOW YOU GUYS THAT EVERYTHING IS RELATIVE TO WHERE YOU ARE...

[LdyFaith] Jester,,, o has put into the health care bill that it is a federal offense to not report any and all gold and silver owned,,,,

[Jester] LdyFaith GOOD THING I DO NOT HAVE THAT HEALTH CARE... THEN I AM NOT UNDER THAT RULE... HAHAHAHA

[Jester] FEDERAL OFFENSE TO HAVE A GOLD COIN MY BUTT... THE STATE I AM IN IS ALLOWING IT...

[Jester] kirbycat94 I HAVE AN INTERESTING ARTICLE FOR TOMORROW ALONG THOSE LINES.... HAHAHAHAHA

[LdyFaith] Jester,,, mine is as well,,, Texas is moving forward with these bills

[Jester] YOU GUYS TAKE IT EASY… SEE YOU TOMORROW….


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