Thursday, 18 December 2014

Th end of the petrodollar

Demise of the Petrodollar and the End of American Power - The Colder War by Marin Katusa



Purchase Marin Katusa's blockbuster New York Times best selling book, "The Colder War: How the Global Energy Trade Slipped from America's Grasp" at ‪http://www.colderwar.com/.



The death of the dollar

IMF Now Ready To Slam The Door On The U.S. And The Dollar



17 December, 2014



As I write this, the news is saturated with stories of a hostage situation possibly involving Islamic militants in Sydney, Australia. Like many, I am concerned about the shockwave such an event will create through our sociopolitical structures. However, while most of the world will be distracted by the outcome of this crisis (for good or bad) for at least the week, I find I must concern myself with a far more important and dangerous situation.


Up to 40 people may be held by a supposed extremist in Sydney, but the entire world is currently being held hostage economically by international banks. This is the crisis no one in the mainstream is talking about, so alternative analysts must.


As I predicted last month in We Have Just Witnessed The Last Gasp Of The Global Economy,” severe volatility is now returning to global markets after the pre-game 10 percent drop in equities in October hinted at what was to come.


We expected such destabilization after the wrap-up of the Fed taper, and the markets have not disappointed so far. My position has always been that the taper of QE3 made very little sense in terms of maintaining the manipulated illusion of economic health — unless, of course, the Federal Reserve was implementing the taper in preparation for a renewed financial catastrophe. That is to say, the central bankers have established the lie of American fiscal recovery and then separated themselves from blame for the implosion they KNOW is coming. If the markets were to collapse while stimulus is officially active, the tragedy would be forever a millstone on the necks of the banksters. And we can’t have that now, can we?


This is not to say that individual central banks and even currencies are not expendable in the grand scheme of things. In fact, the long-term goal of globalists has been to consolidate all currency systems and central banks under the outward control of the International Monetary Fund and the Bank Of International Settlements, as I outlined in“The Economic Endgame Explained.”


That particular article was only a summary of a dangerous trend I have been concerned about for years; namely thestrategy by international financiers to create a dollar-collapse scenario that will be blamed on prepositioned scapegoats. I have no idea what form these scapegoats will take - there are simply too many possible triggers for fiscal calamity. What I do know, though, is the goal of the endgame: to remove the dollar’s world reserve status and to pressure the American people into conforming or even begging for centralized administration of our economy by the IMF.


The delusion perpetuated in the mainstream is that the IMF is a U.S.-dominated institution. I have outlined on many occasions why this is false. The IMF like all central banks is dominated by the international corporate banking cartel. Central banks are merely front organizations for globalists, and I am often reminded of the following quote from elitist insider Carroll Quigley when I hear people suggest that central banks are somehow independent from one another or that the Federal Reserve is itself the singular “source” of the world’s economic ills:







It must not be felt that these heads of the world’s chief central banks were themselves substantive powers in world finance. They were not. Rather, they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up and were perfectly capable of throwing them down.
 
The substantive financial powers of the world were in the hands of these investment bankers (also called “international” or “merchant” bankers) who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful and more secret than that of their agents in the central banks.


No one can now argue against this reality after we have witnessed hard evidence of Goldman Sachs dictating Federal Reserve policy, as outlined here.


And, most recently, we now know that international bankers control political legislation as well, as Congress passed with little resistance a bill that negates the Frank-Dodd restrictions on derivatives and places the U.S. taxpayers and account holders on the hook for more than $303 trillion in toxic debt instruments. The bill is, for all intents and purposes, a “bail-in” measure in disguise. And it was pushed through with the direct influence of JPMorgan Chase CEO Jamie Dion.


The Federal Reserve, the U.S. government and the dollar are as expendable to the elites as any other economic or political appendage. And it can be replaced at will with yet another illusory structure if this furthers their goal of total centralization. This has been done for centuries, and I fail to see why anyone would assume that globalists would change their tactics now to preserve the dollar system. They call it the “New World Order,” but it is really the same old-world monetary order out of chaos that has always been exploited. Enter the IMF’s old/new world vision.


While the investment universe has been mesmerized by the deterioration of the Russian Ruble and oil prices, the IMF has been a busy little bee hive...
In articles over the past year, I have warned that the plan to dethrone the dollar and replace it with the special drawing rights basket currency system would be accelerated after it became clear that the U.S. Congress would refuse to pass the IMF reforms of 2010 proclaiming “inclusiveness” for developing economies, including the BRICS nations. The latest spending bill removed any mention of IMF reforms. The IMF, under Christine Lagarde, has insisted that if the U.S. did not approve its part of the reforms, the IMF would be forced to pursue a “Plan B” scenario. The details on this “plan B” have not been forthcoming, until now.


The Financial Times reported on the IMF shift away from the U.S. by asserting the authority to remove the veto power America has always enjoyed over the institution. This action is a stark reminder to mainstream talking heads and to those who believe the U.S. is the core economic danger to the world that the IMF is NOT an extension of American policy. If anything, the IMF and the U.S. are extensions of international banking power, just as the BRICS are nothing more than puppets for the same self-serving financial oligarchy clamoring for the same IMF-controlled paradigm, as Vladimir Putin openly admitted:







"In the BRICS case we see a whole set of coinciding strategic interests. First of all, this is the common intention to reform the international monetary and financial system. In the present form it is unjust to the BRICS countries and to new economies in general. We should take a more active part in the IMF and the World Bank’s decision-making system. The international monetary system itself depends a lot on the US dollar, or, to be precise, on the monetary and financial policy of the US authorities. The BRICS countries want to change this…"


And of course the Chinese have pronounced their fealty to the IMF global currency concept:







The world economic crisis shows the "inherent vulnerabilities and systemic risks in the existing international monetary system," Gov. Zhou Xiaochuan said in an essay released Monday by the bank. He recommended creating a currency made up of a basket of global currencies and controlled by the International Monetary Fund and said it would help "to achieve the objective of safeguarding global economic and financial stability."


The BRICS are not the only nations demanding the U.S. lose its supposed "influence" over the IMF.  Germany, the core economic pillar of the EU, called for America to relinquish its veto power back in 2010 just as the reforms measure was announced.


The IMF decision to possibly eliminate U.S. veto power and, thus, influence over IMF decisions may come as early as the first quarter of next year. This is the great “economic reset” that Largarde has been promoting ad nauseam in multiple interviews and speeches over the past six months. All of these measures are culminating in what I believe will be a more official announcement of a dump of the U.S. dollar as world reserve currency.


Along with the imminent loss of veto power, I have also written on the concerns of the coming SDR conference in 2015. This conference is held only once every five years. My suspicion has been that the IMF plans to announce the inclusion of the Chinese yuan in the SDR basket and that this will coincide with a steady dollar dump around the globe. Multiple major economies have already dropped the dollar in bilateral trade with China, and engineered tensions between the U.S. and the East have exacerbated the issue.


The timing of the SDR conference has now been announced, and the meeting looks to be set for October of 2015. Interestingly, this linked article from Bloomberg notes that China has a “real shot” at SDR inclusion and official “reserve status” next year, but warns that the U.S. “may use its veto power” to stop China’s membership. I have to laugh at the absurdity of it all, because there are many people in the world of economic study who still believe the developments of globalization and fiscal distress are all “random.” I suppose that if it is all random, then it is a rather convenient coincidence that the U.S. just happens to be on the verge of losing veto power in the IMF just before they are about to bring the BRICS into the SDR fold and supplant the dollar.


This is it, folks; this is the endgame right in front of our faces. The year of 2014 is the new 2007, with all the negative potential but 100 times more explosive going into 2015. Our nation has wallowed in slowly degrading financial conditions for years, hidden by fake economic statistics and manipulated stock prices. All of it has been a prelude to a much more frenetic and shocking event. I believe that we will see continued market chaos from now on, with a steep declining trend intermixed with brief but inadequate “dead cat” stock bounces. I expect a hailstorm of geopolitical crises over the next year to provide cover for the shift away from the dollar.


Ultimately, the death of the dollar will be hailed in the mainstream as a “good and necessary thing.” They will call it “karma.” They will call it “progress.” They will even call it “decentralization” and a success for the free market. But it will not feel like a positive development for the American public, who will suffer greatly as the dollar crumbles. Only those educated in the underpinnings of shadow banking will understand the whole thing is a charade designed to hide the complete centralization of sovereign economic governance into the hands of the globalists, using the IMF and BIS as “fiscal heroes,” saving the world from a state of economic destruction the elites themselves secretly created.


A Chinese bailout of Russia?

China Prepares To Bailout Russia



17 December, 2014

Earlier this evening China's State Administration of Foreign Exchange's (SAFE) Wang Yungui noted "the impact of the Russian Ruble depreciation was unclear yet, and, as Bloomberg reported, "SAFE is closely watching Ruble's depreciation and encouraging companies to hedge Ruble risks." His comments also echoed the ongoing FX reform agenda aimed at increasing Yuan flexibility which The South China Morning Post then hinted in a story entitled "Russia may seek China help to deal with crisis," which which noted that Russia could fall back on its 150 billion yuan ($24 billion) currency swap agreement with China if the ruble continues to plunge, that was signed in October. Furthermore, two bankers close to the PBOC reportedly said the swap-line was meant to reduce the role of the US dollar if China and Russia need to help each other overcome a liquidity squeeze.

As Bloomberg reported, earlier in the evening, China's Wang Yungui noted
  • *CHINA IS CLOSELY WATCHING RUBLE'S DEPRECIATION: SAFE'S WANG
  • *CHINA ENCOURAGES COS. TO HEDGE RUBLE RISKS, SAFE'S WANG SAYS
  • *REAL IMPACT OF RUBLE DEPRECIATION UNCLEAR YET, SAFE'S WANG SAYS
Adding that China plans sweeping reforms to promote FX flexibility.








Russia could fall back on its 150 billion yuan (HK$189.8 billion) currency swap agreement with China if the rouble continues to plunge.
 
If the swap deal is activated for this purpose, it would mark the first time China is called upon to use its currency to bail out another currency in crisis. The deal was signed by the two central banks in October, when Premier Li Keqiang visited Russia.
 
"Russia badly needs liquidity support and the swap line could be an ideal tool," said Bank of Communications chief economist Lian Ping.
 
The swap allows the central banks to directly buy yuan and rouble in the two currencies, rather than via the US dollar.
 
Two bankers close to the People's Bank of China said it was meant to reduce the role of the US dollar if China and Russia need to help each other overcome a liquidity squeeze.
 
China has currency swap deals with more than 20 monetary authorities around the world. Swaps are generally used to settle trade.
 
"The yuan-rouble swap deal was not just a financial matter," said Wang Feng, chairman of Shanghai-based private equity group Yinshu Capital. "It has political implications as it is a sign of mutual trust."
 
The rouble has lost more than 50 per cent against the US dollar this year, pushing Russia to the brink of a currency crisis, though measures announced by the central bank helped it recover some ground yesterday.
 
Li Lifan, a researcher at the Shanghai Academy of Social Sciences, said the swap would not be enough for Russia even if it is used in its entirety. "The PBOC might agree to extend something like 15 billion yuan initially as a way of showing China's commitment to Russia."

*  *  *








...as if to assure all involved parties that there will be enough capital support on both sides, the PBOC released a surprising announcement that the central banks of China and Russia signed a 3-year, 150 billion yuan bilateral local-currency swap deal today, according to a statement posted on PBOC website. Deal can be expanded if both parties agree, statement says. Deal aims to make bilateral trade and direct investment more    convenient and promote economic development in 2 nations.
 
To be sure, some such as Bloomberg, are skeptical that the unprecedented pivot by Russia toward China as it shuns the west, will merely harm the Kremlin. Others, however, wonder: who will be left standing: Europe, with its chronic deficit of energy and reliance on Russia; or Russia, a country overflowing with natural resources, whose economy is currently underoing a dramatic and painful shift, as it scrambles to dissolve all linkages to the Petrodollar and face the Gas-O-Yuan?

*  *  *

Is 'isolated' Russia about to be bailed out by the world's largest economy China?


Perhaps, they already started...

But then again - with the BRICS currencies all turmoiling... (ZAR -22% not shown)



The punchline, however, is that using bilateral swaps, the BRICS are effectively disintermediating themselves from a Fed and other "developed world" central-bank dominated world and will provide their own funding.







We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements.... The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures. 


Incidentally, the role of the dollar in such a world is, well, nil.
For those who have forgotten who the BRICS are, aside from a droll acronym by a former Goldman banker, here is a reminder of the countries that make up 3 billion in population.



Chart: Bloomberg



MH17 - confirmation of Ukrainian responsibility

Ukrainian Soldier Confirms: Ukraine’s Military Shot Down Malaysian MH17 Plane
By Eric Zuesse


17 December, 2014

A Ukrainian soldier who was part of the crew that operated the supposed missile-battery that the Ukrainian Government claims shot down the Malaysian MH17 airliner on July 17th has testified publicly for the first time, saying that the missile-battery was operated by the Ukrainian military, not by the rebels as asserted, and that he and his former crew-mates who operated it laughed when they heard their Government say that this missile-battery was operated by rebels and had shot the airliner down.

An English-translated transcript of the December 15th Russian-language interview with this soldier was posted at UkraineWar.Info on December 17th by Michael Collins, an investigative journalist with UkraineWar.Info who has been following very closely the multiple investigations that are proceeding into the cause of the downing.

This testimony confirms the accumulating prior, already overwhelming and even-more-convincing evidence, which is linked to in my latest article on the topic, here, all of which evidence indicates that either one or else two Ukrainian fighter-jets intentionally shot this airliner down — that it was not an error by rebels who had misidentified this airliner as being a bomber from the Ukrainian Government, such as the Ukrainian Government and its sponsor the U.S. Government claim.

Regarding the reason why the Ukrainian Government did this, it, too, is clear: U.S. President Obama needed a startling incident in order to obtain from the EU and other U.S.-allied nations their participation in heavily increased economic sanctions to weaken Russia. As soon as this plane was downed, both the Ukrainian Government and the Obama Administration claimed that they possessed convincing proof that it had been downed by pro-Russian rebels in Ukraine’s former southeast. All U.S. allies got on board with that and agreed to hiked sanctions against Russia.

This “false flag” event (as such government fakeries are called in the intelligence communities) succeeded, just as did Hitler’s burning down the Reichstag and blaming it on leftists, which was the event that enabled him to seize total power in Germany.

THIS JUST IN (3:21PM Eastern time in U.S.) from Michael Collins: 

“George [Eliason, a third member of our team at UkraineWar.Info, and a resident inside the conflict-zone] says that due to the pub from the article, the Ukraine govt took down their ‘damning’ pic of BUK 312 today and that the reporter who did the interview is underground and fleeing the country.”

So, the reason why Ukrainians are reluctant to go public about their lying Government is obvious. And, all of the ‘news’ media there are owned by Ukrainian, or, in some cases, by American, oligarchs. (The American ones do it through ‘nonprofit’ foundations they create, which are co-funded by the American Government. The U.S. oligarch then gets tax-write-offs, plus co-funding by U.S. taxpayers, to save him still more money on his scheme.)




BUK 312 - In Ukraine government terrotiry
BUK 312 – In Ukraine government territory (Anatoly Sharij)


The never-ending drought in California

"Don't worry! It'll get worse"

As the economy sinks into a deflationary depression and the West fights a cold war (and a hot war in Ukraine) with Russia, the world is burning and the power-that-be are fiddling.

Don't expect one storm and floods to make any difference to California's woes. The aquifers are being exhausted by the Infinite Growth.
NASA: California Needs 11 Trillion Gallons of Water to End Epic Drought


17 December, 2014

California’s record-setting three-year-old drought has left the state with a massive water deficit, and communities, agricultural interests and others warring over access to the supply


Now groundbreaking new calculations based on Now groundbreaking new calculations based on NASA satellite data have revealed just how large that deficit is. A team of sci’s Jet Propulsion Laborator (JPL) crunched data from NASA’s Gravity Recovery and Climate Experiment (GRACE) to figure out how much water it would take to end the drought. They determined that it would take 11 trillion gallons—about 1.5 times the maximum volume of the largest U.S. reservoir—to make up for drought losses due to record heat and low rainfall.


Spaceborne and airborne measurements of Earth’s changing shape, surface height and gravity field now allow us to measure and analyze key features of droughts better than ever before, including determining precisely when they begin and end and what their magnitude is at any moment in time,” said NASA team leader Jay Famiglietti. “That’s an incredible advance and something that would be impossible using only ground-based observations.”

"Record drought in the U.S. southwest has hit California especially hard. Image credit: NASA/JPL
Record drought in the U.S. southwest has hit California especially hard. Image credit: NASA/JPL

The NASA team found that the volume of water in the Sacramento and San Joaquin river basins had decreased by 4 trillion gallons a year since 2011—more water than is used by the state’s residents each year for domestic and municipal purposes—and that water storage in the two basins is currently 11 trillion gallons below normal, a deficit that has steadily increased since GRACE launched in 2002. Depletion of groundwater in California’s fertile agricultural Central Valley is responsible for two-thirds of the loss.

Integrating GRACE data with other satellite measurements provides a more holistic view of the impact of drought on water availability, including on groundwater resources, which are typically ignored in standard drought indices,” said Matt Rodell, chief of the Hydrological Sciences Laboratory at Goddard.

NASAMap
Groundwater in California has been depleted at an unprecedented rate. Image credit: NASA/JPL

Making matters worse, data from NASA’s Airborne Snow Observatory earlier this year showed that California’s Sierra Nevada snowpack was half that of earlier estimates.


The 2014 snowpack was one of the three lowest on record and the worst since 1977, when California’s population was half what it is now,” said Airborne Snow Observatory principal investigator Tom Painter of JPL. “Besides resulting in less snow water, the dramatic reduction in snow extent contributes to warming our climate by allowing the ground to absorb more sunlight. This reduces soil 
moisture, which makes it harder to get water from the snow into reservoirs once it does start snowing again.”


The NASA scientists said that the recent rainstorms in California will do little to alleviate the water shortage, failing to provide anything close to the amount of water the state needs to end its prolonged drought.


It takes years to get into a drought of this severity, and it will likely take many more big storms, and years, to crawl out of it,” said Famiglietti.


Summing up Russia

I do not have the knowledge to understand all the nuances of what is happening to the ruble, but this sums things up quite nicely.

In one word, DANGER

Medvedev declares: more of the same



Medvedev has just called a government meeting with most of the directors of top Russian corporations and the director of the Russian Central Bank.  He immediately announced that he will not introduce any harsh regulatory measures and that he will let the market forces correct the situation.  As for the former Minister of Finance, the one so much beloved in the West, Alexei Kudrin, he expressed his full support for the latest increase in interest rates.

The Atlantic Integrationist 5th column is clearly on a full-scale offensive.  This is far more dangerous than anything the US, NATO or the EU are doing.

The Saker


http://vineyardsaker.blogspot.co.nz/2014/12/medvedev-declares-more-of-same.html

Headlines -12/17/2014

Bankia’s saga of lies, deception, and fraud should (but probably won’t) culminate in the imprisonment of a former IMF president, crippling fines for the auditors (Deloitte), and fireworks at financial regulators.

## Airline Death Spiral ##
Delta continues to pull back in Memphis. The airline announced in 2013 that it would drop Memphis as a hub and has whittled away at its presence there ever since. Now, after yet another round of cuts revealed on Friday, it appears Delta's retrenchment in Memphis is nearly complete.
A survey by the International Air Transport Association suggested that 43 per cent of airlines experienced more than 100 cases of unruly passengers in a year. We round up the more bizarre cases of air rage that have come to light in recent years.

## Fault lines/flashpoints/powder kegs/military/war drums ##
60-plus nations nominally in the coalition and over 1,000 airstrikes between Iraq and Syria, the US has thrown myriad data at  Congress to try to prove “progress” in the war on ISIS. Yet a closer inspection reveals anything but.

Scientific data shows Greenland's continental shelf is connected to a ridge beneath the Arctic Ocean, giving Danes a claim to the North Pole and any potential energy resources beneath it, Denmark's foreign minister said.
Watch as more countries come up with their own versions of the nine-dash line. -- RF
Global arms sales by top 100 defense companies in the world fell for the third year in a row, while Russian arms sales went up by 20 percent, according to new data compiled by the Stockholm International Peace Research Institute (SIPRI), a Sweden-based independent think tank.
The population of Jewish settlers in the occupied West Bank has continued to surge during Prime Minister Benjamin Netanyahu's years in office, growing at more than twice the pace of Israel's overall population, according to newly obtained official figures.

## Global unrest/mob rule/angry people/torches and pitchforks ##

## Energy/resources ##
As hard as it is to believe - given the strength of the "Russia-is-doomed" meme - Crude oil prices for Russia (in Rubles) are unchanged since February... This is important as all costs are Ruble denominated while revenues are USD denominated, leaving Russian oil companies’ margins insulated despite the dollar decline in price.
Severe droughts are forcing researchers to rethink how technology can increase the supply of fresh water.
Ukraine’s bid to rid itself of its dependence on Russian energy just took a huge hit.

## Got food? ##

## Lifestyle Solutions ##

## Environment/health ##

## Intelligence/propaganda/security/internet/cyberwar ##
Researchers in the Netherlands have found what they say is a way to make it impossible for criminals to forge passports, ID cards or credit cards.
This of course assumes that we'll have the power to run the necessary electronics and the internet. Even temporary power outages would wreak havoc on such a system. -- RF

## Systemic breakdown/collapse/unsustainability ##
It's the kind of defiant hubris one expects from a dying empire. -- RF
Of course all added layers of security entail greater cost and also increase complexity, thereby hastening collapse. -- RF

## Japan ##
Electrics, hybrids, fuel-cell cars... Futile attempts to save a dying system. -- RF

## China ##
About 300 Chinese people are fighting alongside the Islamic State in Iraq and Syria, a Chinese state-run newspaper said on Monday, a rare tally that is likely to fuel worry in China that militants pose a threat to security.

## UK ##
Hospitals and fire services will be run “outside the public sector” as the Conservatives dramatically shrink the state and cut costs, a senior minister has disclosed.
The Dalai Lama says Britain kowtowed to China over the protests in Hong Kong because its “pocket is more or less empty”

## US ##
The bottom line for the vast majority of us is that there is an extremely high price to be paid for independence from fealty to the State or Corporate America.
The Empire is falling on hard times. -- RF
Homeland Security Secretary Jeh Johnson came to this South Texas outpost on Monday to inaugurate a 50-acre detention center that will hold up to 2,400 migrants caught crossing the Mexican border illegally, becoming the largest immigration detention facility in the country.
Housing starts collapsed in November. They weren’t good, they weren’t even so-so as media reports intimated. The seasonally adjusted annualized number which the paid flacks report is absolute nonsense. It’s fiction.

And finally...