40 Central Banks Are Betting This Will Be The Next Reserve Currency

As we have discussed numerous times, nothing lasts forever - especially reserve currencies - no matter how much one hopes that the status-quo remains so, in the end the exuberant previlege is extorted just one too many times. Headline after headlines shows nations declaring 'interest' or direct discussions in diversifying away from the US dollar... and as SCMP reports, Standard Chartered notes that at least 40 central banks have invested in the Yuan and several more are preparing to do so. The trend is occurring across both emerging markets and developed nation central banks diversifiying into 'other currencies' and "a great number of central banks are in the process of adding yuan to their portfolios." Perhaps most ominously, for king dollar, is the former-IMF manager's warning that "The Yuan may become a de facto reserve currency before it is fully convertible."

The infamous chart that shows nothing lasts forever...

Nothing lasts forever... (especially in light of China's recent comments)

As The South China Morning Post reports, Jukka Pihlman, Standard Chartered's Singapore-based global head of central banks and sovereign wealth funds (who formerly worked at the International Monetary Fund advising central banks on asset-management issues), notes that:

At least 40 central banks have invested in the yuan and several others are preparing to do so, putting the mainland currency on the path to reserve status even before full convertibility

The US dollar remains in charge (for now)...but

The US dollar is still the world's most widely held reserve currency, accounting for nearly 33 per cent of global foreign exchange holdings at the end of last year, according to IMF data. That ratio has been declining since 2000, when 55 per cent of the world's reserves were denominated in US dollars.

The IMF does not disclose the percentage of reserves held in yuan, but the emerging market countries' share of reserves in "other currencies" has increased by almost 400 per cent since 2003, while that of developed nations grew 200 per cent, according to IMF data.

As SCMP goes on to note, the rising popularity of the yuan among central bankers is probably mainly due to Beijing's extremely favourable treatment of them as it has sought to encourage investment in the yuan.

For example, central banks enjoy preferential treatment in the qualified foreign institutional investor category, both on the size of the quota and the length of the lock-up period. The QFII quotas given to central banks are not publicly known, but some of those announced by investing central banks are up to 10 times larger than others in the programme and, most importantly, free of any capital controls.

"Central banks and sovereign funds have special treatment," Pihlman said. "They have the ability to invest in a way that any other investor does not have. When it comes to convertibility, there is nothing formally out there, but it is fully convertible."

As Pihlman explains, things are accelerating...

Pihlman said "a great number of central banks are in the process of adding [yuan] to their portfolios".

"The [yuan] has effectively already become a de facto reserve currency because so many central banks have already invested in it," he said. "The [yuan] may become a de facto reserve currency before it is fully convertible."

The central banks more likely to add yuan holdings in the future were the ones with "strong trade linkages to China" and those which had relatively large levels of reserves which could consider diversifying more for return-related reasons, he said.

"The [yuan's] convertibility may be already there for central banks in a way that has got them comfortable to start investing in the currency," Pihlman said.

We leave it to a former World Bank chief economist, Justin Yifu Lin, to sum it all up...

"the dominance of the greenback is the root cause of global financial and economic crises,"

It appears the world is beginning to listen

Credit to Zero Hedge

Dr. Paul Craig Roberts: Gold and The Dollar Are In A Fight to the Death!

The Culture is killing us

By Klaus Rohrich



One of my college professors back in the ‘60s told me the penultimate difference between capitalism and socialism was that under capitalism man exploited man, while under socialism it was exactly the other way around.

I personally couldn’t have defined the difference any more succinctly than my late prof, but I am given to wonder how any sentient person could still believe that socialism is the salvation of man.

Interestingly, most socialist regimes of the past were imposed on countries through violent revolutionary actions that entailed significant numbers of deaths and near endless human suffering in order to someday create a ‘workers’ paradise. Think the Soviet Union, China, Cuba, North Korea, Vietnam, etc. Fairly each and every nation that has ever adopted socialism as its economic model has failed to advance the fortunes of its citizenry. Indeed, the exact opposite has happened. Hence the total collapse of the Soviet Union and its subservient satellites, the failure of the Cuban economy, where the average income is between $12 to $25 per month and the misery now plaguing Venezuela, where socialism was imposed by Hugo Chavez’s revolution in 1999.

One thing for which socialism is famous is its penchant for lowering the standard of living for everyone, save and except those of the ruling class, or nomenklatura, as it came to be called in the old Soviet Union. Hence the leaders lived like the Czar they overthrew and the rest of the population shared equally in misery, a fact that bespeaks my old prof’s sardonic definition of the difference between the two systems.

America is currently undergoing a revolution in efforts to turn its own economy from capitalism into socialism. And while this is not a particularly remarkable development in and of itself, what makes it remarkable is that for the first time in history socialism is being imposed on the people by its existing ruling class. The process to achieve this isn’t necessarily one involving violent revolution, but the end result will undoubtedly be as if it had.

Take for example the imposition of a draconian national healthcare regime. Designed to provide coverage for some 10% of the American population that did not have healthcare coverage, the regime was imposed on the other 90% that did. And while the administration crows hollowly about this Brobdingnagian victory, evidence of its harm is everywhere.

No rational individual could possibly believe that 7 million Americans actually signed on to this outlandish and expensive scheme, but it was necessary for the administration to postulate this lie, if for no other reason than to offset the over 6 million Americans that were documented having lost their existing healthcare coverage because of the new healthcare law.

But healthcare isn’t the only area in which socialism is being imposed on the nation from the top down. In other areas, such as finance, industry and agriculture the socialist hordes in the form of government regulators are running rampant and wreaking havoc in their wake.

It’s fashionable to blame George W. Bush for the housing crash, but few understand that this economic disaster had been 30 years in the making and was made inevitable by George W.’s predecessor, Bill Clinton. Clinton’s strengthening of the Community Reinvestment Act (which was initially instituted by the hapless Jimmy Carter) and its enforcement through Janet Reno’s intimidation of American mortgage lenders created the conditions that resulted directly in the collapse of the housing market and the Great Recession of 2007.

To date none of the policies the Obama administration have imposed on the country have resulted in good economic news. On the contrary, any economic gains in the US economy were in spite of the administration’s policies, not because of them. What’s more, it’s difficult to ascertain if the economy is any better off today than it was in January 2009, given the administration’s mendacity. Is the unemployment rate really at 6.7% as claimed by the Bureau of Labor Statistics, or is it closer to double digits, when considering that there are over 93 million Americans not participating in the labor force?

Then there’s the global warming/climate change boondoggle, which the administration is once again pursuing with total disregard to the economic damage its policies will impose on the nation. And what’s remarkable, as more and more people see these policies for what they are, i.e. a massive wealth redistribution scheme, its proponents are doubling down their efforts to impose their dubious policies. Now they’re calling for the incarceration of prominent individuals who argue that climate science is still open to debate and they’re legitimizing lying about their claims in the interest of the common good. But it’s all to accomplish a positive outcome.

Where have we heard this before? The Soviet Union? Nazi Germany? Fascist Italy? These are all states whose ruling classes justified their actions because they were working for the common good, much in the same way that our political elites and their intelligentsia are arguing the same.

Saddest of all is my realization that this phenomenon has little, if anything, to do with politics and everything to do with culture. Over the past three decades the culture has morphed into a vapid, shallow backwater of mediocrity. Ignorance is the order of the day. Being smart is no longer desirable. Working hard is for suckers. Honesty is for the naïve. Patriotism is a form of racism and being heterosexual is so yesteryear.

It’s in a culture such as this that diseased philosophies, like those espoused by Barack Obama and his acolytes, find root and blossom. I see very little hope for meaningful change within my lifetime and likely not within the lifetime of my children.


Credit to Canada Free Press

Donetsk protesters barricade for independence

DEADLY EBOLA VIRUS SPREADS

NEW YORK – Defying efforts at containment, the Ebola outbreak that began in Guinea and has caused 90 dead in Guinea and Liberia has now spread further across West Africa into Mali in what Doctors without Borders is calling an “unprecedented” outbreak.

The U.N.’s World Health Organization, or WHO, has identified the active virus as the Zaire strain of Ebola. The virus has a death rate approaching 90 percent, suggesting that unless contained, the outbreak in West Africa could become one of deadliest epidemics of Ebola, for which there is no known cure.

Doctors without Borders has 52 international staff working alongside its Guinea staff in cooperation with Guinea’s Ministry of Health.

The group is caring for 19 patents held in isolation units set up in various locations across Guinea.

The teams include doctors, nurses, epidemiologists, water and sanitation experts, health promoters and psychologists.

“Our efforts are aimed at containing the outbreak, which is accomplished by detection of the sick and isolating them from the rest of the population,” explained Anja Wolz, MSF’s emergency coordinator in Conakry, Guinea.

“Although there is no cure for this disease, we can reduce its very high mortality by addressing the symptoms. This includes administering a drip to patients who have become dehydrated from diarrhea and by confirming that they do not have a different disease, such as malaria or a bacterial infection like typhoid.”

Meanwhile, tensions in the region are growing as health-care authorities fight to combat panic in the areas affected by the Ebola outbreak.

In Mali, three people have been placed in quarantine, with samples sent off to the Centers for Disease Control and Prevention in Atlanta for testing.

The Associated Press reported Friday that residents in Bamako, the capital of Mali, have conducted public demonstrations that resulted in several people wounded when police tried to disperse protesters.

The crowds in Bamako were evidently angry that several people suspected of having the deadly disease were being held in isolation in their neighborhood.

Also on Friday, an angry mob attacked an Ebola treatment center in Guinea, accusing the staff of bring the disease to the town, according to Reuters.

“We have evacuated all our staff and closed the treatment center,” Doctors without Borders medical worker Sam Taylor told Reuters, declining to give details of the attack. “We have the full support of the local leaders and we’re working with the authorities to try and resolve this problem as quickly as possible so we can start treating people again.”

Government health officials in Guinea have banned the consumption of bat and bush meat, local delicacies in West African nations that are considered carriers of the Ebola virus.

Last week, Senegal closed its border with Guinea in an attempt to stop the spread of the virus.

WHO reports Ebola first appeared in 1976 in two simultaneous outbreaks, in Nzara, Sudan, and in a village in Yambuku, Democratic Republic of Congo, situated near the Ebola River, from which the disease takes its name.

“Ebola is introduced into the human population through close contact with the blood, secretions, organs or other bodily fluids of infected animals,” the WHO website says.

“In Africa, infection has been documented through the handling of infected chimpanzees, gorillas, fruit bats, monkeys, forest antelope and porcupines found dead or ill in the rainforest.”

Ebola spreads from close contact with the blood, secretions, organs or other bodily fluids of infected people.

WHO warns burial ceremonies in which mourners have direct contact with the body of the deceased person can also play a role in the transmission of Ebola. The transmission of the disease via infected semen can occur up to seven weeks after clinical recovery.

Dr. Peter Piot, co-discoverer of the Ebola virus

The Centers for Disease Control and Prevention warn the symptoms of Ebola include fever, headache, joint and muscle aches, weakness, diarrhea, vomiting, stomach pain and lack of appetite, while some patients also experience a rash, red eyes, hiccups, cough, sore throat, chest pain, difficulty breathing and swallowing, as well as bleeding inside and outside of the body.

After an incubation period of between two and 21 days, the Ebola virus can cause death a few days later in particularly virulent cases in which the body organs shut down and internal bleeding becomes unstoppable.

People who fall sick with the disease tend to vomit, have diarrhea and suffer both internal and external bleeding, with their bodies often “covered in virus,” explained Dr. Peter Piot, the founding executive director of UNAIDS and under secretary-general of the United Nations from 1995 until 2008.

He’s the microbiologist and physician who co-discovered Ebola and now directs the London School of Hygiene and Tropical Medicine.

The Ebola virus has alarmed international health officials because the frequency of international air travel has increased the possibility the outbreak of the virus in one nation might quickly be transmitted to other countries by patients in the incubation phase of the infection.

The virus is also a serious threat to health-care workers administering health treatments for the illness.

Credit to WND
Read more at http://www.wnd.com/2014/04/deadly-ebola-virus-spreads/#qXxpAd2SHuhg7LCo.99

Dollar Is Dropped As Countries And Central Banks Declared Their Holdings In Yuan

Major Operation against Protesters Underway in Kharkiv

MOSCOW, April 8 (RIA Novosti) – Major operation began in Ukraine’s Kharkiv, the city center is currently blocked, acting Interior Minister Arsen Avakov said Tuesday.

"Counterterrorism operation in Kharkiv has begun, city’s downtown is blocked. So are the metro stations. There is nothing to worry about. Kharkiv Regional State Administration building is clear from protesters. Firearms were not used during the operation,” Avakov wrote on his Facebook page.

He also claimed 70 people have already been arrested.

Pro-Russian opposition protesters have been rallying across Ukraine’s eastern and southeastern regions since the recent change of power in the country.

Acting Ukrainian Foreign Minister Andriy Deschytsia announced Monday that if the situation in the southeastern regions escalates, the government in Kiev will take “much harsher” measures than those that have preceded Crimea’s reunification with Russia last month.

Ukraine’s interim authorities vowed tough “anti-separatism measures” in eastern and southern regions with substantial ethnic Russian communities, which rallied that in support of greater autonomy over the weekend.

The Donetsk region in eastern Ukraine announced plans Monday to schedule a referendum by mid-May on declaring independence and joining Russia. Ukrainian media said similar intentions were voiced by protesters in Kharkiv late Monday, although no formal measures have been taken so far.

Russia has repeatedly said that Ukrainian nationalists and their aggressive rhetoric bear full responsibility for the crisis in the country, which resulted in the reunification of Crimea with Russia last month.

Moscow said that a federal form of government is the only way out of the protracted political crisis in Ukraine, currently a unitary state which is de-facto split into a Ukrainian-speaking west and Russian-speaking east and south.

Credit to RIA Novosti