In 2010, the IMF changed its long standing position of having the US and the USD be dominant in its affairs. One aspect was to break up the US veto over any rule changes by lowering it’s voting percentage. The second major aspect was to allow the Chinese Yuan to make up part of the basket in the Special Drawing Rights. These changes point to the highest levels of the banking cartel attempting to break the global dollar trade imbalance. These changes are awaiting the US Congress’s approval before they can go into effect.
These monumental changes will impact the relative valuation of tens of trillions of assets. It literally represents the top of the financial pyramid. The IMF will reset the SDR ratios again in 2015, and they have promised to go ahead and work around the US since the US Congress has not approved (note Jack Lew was tasked in Treasury to get approval from Congress – so the oligarchy is pushing for the change only Congress seems to be dragging their heels) . These changes spell the beginning of the end of the US dollar as global reserve currency.
Most of the news news/rumors I’ve seen published seem to suggest that the IMF seem to be pushing to go back to a fixed exchange rate scheme between central banks using the expanded SDR as the medium of exchange. In addition, there may be some type of SDR bonds issued to create an investible liquid reserve instrument. Gold may be a small part of the SDR given the changes we have seen in central bank holding of global gold reserves. The problem today is depth in reserve assets away from US Treasuries are minimal. These IMF changes ,if implemented, will result in increases in US interest rates and devaluation of the dollar as China and other countries move out of Treasuries and into the SDR-based instrument in a supposedly orderly market. I have a suspicion that the market will be disorderly as insiders trade ahead of the changes – again the relative values of all currencies will be put in play – so I expect ccy trading volatility to continue to increase.
One obvious deduction is that China has been fully integrated into the New World Order but Russia has not. Years ago, I wondered why China was getting very friendly treatment though still officially a Communist country (but not in practice) . China was given favored trading status, admission to WTO even though it maintained a huge variety of subsidies and barriers to free trade, massive investment in capital and technology from Western countries – in spite of being Communist, etc. I will write up some of my thoughts on that subject in a later post, but suffice it to say China since 1980 has become fully integrated into the NWO – that is to say Chinese oligarchs had made a deal with Western oligarchs. On the other hand, Russia though no longer Communist is still getting shunned and economic war is being waged against it. Recent actions against Russia are not a surprise given that China was made part of the banking club but not Russia.
In recent days, Russia is being ripped apart with political and economic sanctions, but China is untouched. In fact, China is the largest beneficiary of the recent actions against Russia. It looks like a good cop/ bad cop scenario where Russia is giving up large sums in deals with China to deal with the Western pressure. The oligarchy may have decided to keep Russia as a resource colony where the West will keep the European part and China will gain Siberia and the eastern parts – at least in terms of economic influence, if not actual political boundaries a few decades in time.
Gang warfare is being waged against Russia at the highest economic levels – at the top of the monetary pyramid, but track the IMF changes carefully this year – the US looks to be a loser also. Watch the currency market closely as they will become even more volatile but they should also start reflecting the new world order where Chinese oligarchs are now given a full seat.