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Thursday, March 26, 2009

CHINA - urges new global reserve currency - People's Bank of China governor Zhou Xiaochuan is on the right track

Author Thomas Ramseyer
China's Zhou Xiaochuan on the right track
It is very wise to ask for a new widely accepted currency like Poeple's Bank of China's governor Mr. Zhou Xiaochuan does. 

The USD has seen its peak already long time ago. The decay was eased off when the government started building up huge debt to the bad of the american people which was lured into saving only after having bought. 

The result is evident; the system has failed. It is proven by all; by politicians, managers as well as the priests and professors.

Gold convertibility's cessation in the 70ties proves faltering american way of doing business
The very first warning about the deadbeat american system of interest and debt has been given by the termination of the gold convertibility. (President Nixon's speech to the American people on air)

Don't forget, remember the USD nosedived just as a lame duck from a longtime maintained stable - was it really stable ? - level of some e.g. Swiss CHF 4.30 to agonizing CHF 1.43 within only seven years. 

The US-Dollar's volatility then showed what the rest of the world was dealing with; a heavily indebted country living on the wealth of all others. Adventurous performing USD - 1977 CHF 1.43, 1980 2.93, then bumping up and down to 90ties' 1.10 to recover to some CHF 1.83 . . . . . . stable country? stable political system? never ! . . . It is rather the story of a dead man walking head over heal since quite some time.

USDollar paper flying like a boy's kite in the crosswinds
- kite on a boy's string or boy on the kite's string - this may be the question
The United States of Americas' Dollar in fact is the most manipulated currency all over the globe. The currency system has no clue about how much worthless paper is swamping over the entire world. How much fake money is lingering about. Misused to trick the ignorant citizens' system by hindering the desperate central banks' actions.

Real pirates even do not use ships nowadays - they volatiledly get hold of other countries's wealth - how to neatly get hold of quite some billions
What they did and what they will do again is to deprive other countries' economies of their wealth. Taxpayers are not directly impacted by the action taken, it happens through the backdoor of the central banks. 

For shedding a bit of light on it just read that tale. 1978 USD vs CHF 1.43 Swiss Central Bank has bought starting at much higher levels like hell, Swiss Franc liquidity to pour out of everybody's ears and nose. 

Similar situtation throughout Europe, Germany, France and all the others. Then the almighty states decided to "assist" the drowning they issued Carter bonds in Swiss Franc at levels never seen [2.125% in CH for two to three and a half years] as well as in DeutschMark denominations. 

The USA helped Europeans to neutralize their overshooting liquidity . . . . . It is true they helped ... by helping themselves as well. The Billions of Swissfrancs sold at levels of some 1.43 against US-Dollars were bound to be bought back at roughly 2.83 two to three and a half years later.

Individuals ripped off wide eyes shut
The calculus is easy: ONE $ bought for CHF 1.43 in 1978 sufficed to pay back CHF 2.83 at the redemption of the Bonds. CHF 1.40 were sneaking out of Swiss National Banks' backdoor, just cleared away right under the noses of Swiss taxpayers not noticed by the latter. 

They never got aware facts being covered by loud voices. It is about to happen again: Swiss National Bank got credit of some USD 68 Billion selling them against NON-US-currencies at levels of CHF 1.-- to 1.20 for one USD. 

Imagine when Switzerland has to pay this American loan back by buying USD at substantially higher levels - they will fix it - of .... let us just assume some CHF 2.-- per USD. What will this be?? A never ending nightmare: ONE USD will cost us twice as many Swissfrancs as at start. Twice as many ?  

Thus sixtysomething billion (roughly CHF 65'000'000'000) If this compared to GDP or actual internal debt we get the creeps.

The ancient remedy of pumping in liquidity won't work this time - the peoples' debt too heavy - internal as well as external
The USA have been struck by interest rate's gamble and are severly shaking; their president trembling, not very assuring like a priest of a lost religion. He is all but promise. Promise built on sand.

Glued to the past - antiquated view given extraordinary situation
USD considered the strongest currency all around the globe ? NEVER !!

US political system considered the most stable around the globe ? NEVER !! 

US citizens the most hardest working force in the world ?? NEVER !!

US President Obama is slapping the NON-US-world right in the face !!
What does he think? How arrogant; there still are all the others hey cannot survive without !! 

The US without the world ? The world without the US ? Who is indebted ?, the rest or them ?

Q & A - question and answer
Who was importing more than exporting ? The hardest working people in the world !

Who is living on the other countries' money ? The hardest working people in the world !
Who is consuming more than earning ? The hardest working people in the world !

Whose citizens have returned to live in tents at the cities' brims ? The hardest working people of the states !

Who is forcing countries all over the world ? The hardest working people's state !

Who is postponing all the sort of things by putting in a veto? The hardest working people's states.
The real remedy - looking forward into the future - no retrograde activities to apply

The actual system has collapsed. It already started collapsing just when durables were built without prior saving. Paper against the Marshall !
Buy first then save is the root of all the mess. Save first then buy is remedy.

M O N E Y   N O T   B A C K E D   B Y   R E A L   G O O D S    I S   U S E L E S S

Greedy managers' salaries - not really the reason - a marginal battlefield
The reason for the actual crisis is not the greed of certain individuals playing around with other people's wealth by putting it at stake. The noise about that bunch of skimming riders is just good enough to hide the truth. 

Why talk about some USD 140 Billion when Trillions are at stake. Why concentrate on collateral damage while the house is set on fire? It's just to mislead the people having kept ignorant. 

Presidential outcry is but a show we know. It is just to hit the sack instead of hitting the donkey.

Reason is the system has been built on illusions - paper for the real
The illusion is that paper keeps the wealth which is not true; it's proven. Paper is only meant to transport the value for a short lapse of time. Never to preserve. 

For to preserve real goods resources such as soil and manpower are needed. Capital for capital; never capital for paper. This has to be understood again.

Suggestion to renew the financial System
ALL currencies finally are useful only in their home-countries. For that reason it is not possible to manage currency reserves by diversification. 

At the end of the day any currency will be converted back into the original currency thus working but at home. 

This is the reason why concerted action has to be taken by all countries during the very same lapse of time.

a) The whole currency system has to be altered by the following measures taken:
1) All bills are collected and subsequently destroyed.

2) In the case old bills are replaced by modern new ones it is NOT possible to exchange central bank money (giralgeld) for bills. Individuals do not need more bills than are afloat all of a sudden.

3) All credit cards are collected for extinction. Consumers are to first pay down their debts then save and only after saving to cosume or invest in durable goods. Thus economy becomes sustained while having long-term goals to achieve. 

Financial intermediaries are not to use misleading expressions such as SAVING afterwards; saving is always BEFORE buying. Only debit cards are allowed; there are no credit lines allowed anymore.

4) Paper always buys durables or nutrition. Options are traided only on a fully covered basis; no delta hedges allowed. Futures always are paid against physical delivery. People in the need are buying from producers. Inflation thus is impossible, illusive structures whatsoever beyond control are not allowed. 

As it can be seen illusions turn the people down. Americans sell their blood, their sperm, their hair. They are about to sell even more.

5) To protect firms from takeover - friendly or unfriendly - they simply unlist from the stock exchange. No reason needed to bar somebody from the shareholders' book. The law will alter.

6) Uneven tradebalances are settled by the exchange of real goods. The biggest debtors of all times is in austerity, they cure themselves. If they do not there will be even spuds' convertibility cessation

b) replace the USD by a new worldwide economy based currencyThe example of Europe shows the way - ECU first artificiel currency proves useless

1) First Europe invented the ECU which was a currency not backed by one sole economy. The ECU only was a basket of different european currencies exchangeable only at fixed rates the latter being altered from time to time because of misbehaveing governments in terms of policies influencing the money.

2) Europe invented then the EURO, one single money meant for the whole European Community. Before inventing all the countries were to streamline their economies. The convergence of the Interest rates took place. All the countries actually had same rates.

3) X-DAY The European dealt out new money exchanged the balance sheets' currencies as well as all the bills. ECB European central bank for once had full controll on central bank money knowing about the entire mass of bills roaming about the countries up and down. [Meanwhile the US-Dollars' - fake and real - amount of bills still was, is and will be unknown to federal reserve thus US-administration. See the vital difference?!]

4) As all the countries had same relative figures inside their domestic economies there were only slight differences in yield along the whole yealcurve up to fifty years. The slight differences never the less proved the expected behaviour of different politicians thus influencing their countries' interest rates. 

Interest rates now are the price for money. The market exchanges discounted cashflows - e.g. Italy's 10 years present value against Germany's 10 years present value. First only slight spreads . . . . . have a look at them now ! Frenchs are Frenchs, Germans are Germans, Italians are Italians, others are others . . . they stay for ever what they are.

5) Only Problem all countries' individual central bankers become sheer statistical bureaucrats, no power anymore thus not on stage. They leave their vessels. The manipulative power by cheap or expensive money thus the control is surrendered to the most powerful - are they ? - economies. 

The more they count the more power and influence they have. Driven by the people's foreseen riots threatened to lose their seats.

6) In case of a unified sole currency overall the countries only decent behaving of the parliaments each member thereof elected by the souvereign, individuals, taxpayers, will lead to stability and sustainable prosperity. Each country's interest rates [the yield curve] reflect the measures taken by the parliaments then executed by the administrations' presidents or multiple headed crews.

Destroy the paper, deprive the crooks of measures to be taken by manipulating money

Do it ! Walk NOT talk !

copyright Thomas Ramseyer