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Dollar Disaster Looms? China and Russian currencies break away

OWON: Recently, we wrote about this as a major break by Russia to find its own way in the world by breaking the yoke that was binding it.

Now we see this story. What is happening is a major hit to the value and velocity of the dollar and if Russia and China find favor in their internal economies. Then other countries will follow suit. No question this is both a threat and challenge to US hegemony.

We will soon see a US response as one cannot sleep walk through this. This will freak Washington and NY.




Dollar Disaster Looms? China and Russian currencies break away


The Daily Bell
20 August 2016

Russia leaves the Dollar based monetary system and adopts a system of Sovereign Currency. The implications are phenomenal! “In 1990 the first priority of Washington and the IMF was to pressure Yeltsin and the Duma to “privatize” the State Bank of Russia, under a Constitutional amendment that mandated the new Central Bank of Russia, like the Federal Reserve or European Central Bank, be a purely monetarist entity whose only mandate is to control inflation and stabilize the Ruble. In effect, money creation in Russia was removed from state sovereignty and tied to the US dollar.”

2016: “The Stolypin club report advises to increase the investment, pumping up the economy with money from the state budget and by the issue of the Bank of Russia”. Putin decided to follow the Stolypin club advice as the new monetary policy of the country. -Before It’s News

Money is changing fast and the US dollar is going to crash.

Here’s an excerpt from yet another recently published article (translated from the Russian) describing how the ruble may now evolve (here).

We must nationalize the ruble. What does it mean? It means that we must separate the internal markets from the external ones.

… Thus, the first step for Russia is secession from the IMF and others similar institutions designed to keep the entire world in bondage. The dollar noose must be cut.

Now the amount of printed rubles will not be determined by how many dollars we have but by the actual needs of our economy.

… We have absolutely no need in the central bank in its current form, but we do need a financial regular. Under any regime, it was the Treasury that performed this function. Let it remain the same now regardless of the official name. It may continue to be called the Central Bank. If the essence is changed, there is no need in changing plaques.

You can also see an article (here) that goes into this issue more deeply and claims that Putin has in mind backing a portion of the ruble with gold as well. (We should note there are claims the ruble is backed by gold already.)

The dramatic – historical – Russian currency changes (if these articles are accurate) seem a little difficult to discern in full at this moment, but obviously things are changing fast. And they are changing for China’s “money” as well. In fact, some have speculated China and Russia could launch a joint, gold-backed currency (here, see bottom of article).

At the beginning of October, the yuan joins the IMF’s SDR basket (here). This means that major international institutions can issue bonds payable in yuan (actually RMB, the Chinese external currency).

And that is just what has happened already. The World Bank is issuing a large yuan/RMB tranche and this will be the first of many (here).

Investors who want to place funds in RMB rather than dollars will use the new yuan/RMB-based instruments. The US will continue to print dollars but those dollars may not find a home abroad so easily. Instead they may circulate back into the US economy creating significant price inflation.

The US was able to do so much damage domestically and abroad because of its virtually unlimited spending power. It’s been able to prosecute endless, horrible wars and imprison up to five percent of its adult population at any one time.

Now things are changing. Between the Russian announcement and yuan/RMB convertibility, the US will gradually have more trouble printing money at will. Perhaps the corrupt military-industrial complex will be impelled to shrink and large-scale social programs like the wretched Obamacare will have more difficulty with funding as well.

As a libertarian publication, we should rejoice over the upcoming starvation of the US fedgov.

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