Conflict and Commonality Between Multilateralism and Democracy

By JC Collins

With the increasing socioeconomic tension in the United States, it is reasonable to expect that the population could begin to see the scaling back of police state methodology and the beginnings of a more democratic process which reflects the growing demand for fair and equitable representation.

Whether its protests and rioting against the abuse of power by police, or legislative bills demanding an audit of the Federal Reserve, the pattern of reversal is beginning to take shape.  Some assumption can be made and discussed regarding the rise of multilateralism and the effects of a waning unipolar American world.

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Fear Not the Death of the Dollar

Dollar Depreciation and Investment Safe Havens

By JC Collins

With so much fear mongering and predetermined analysis surrounding the so-called “demise, or death of the dollar”, it can be frustrating for the average person and investor to step back and reflect on the totality of what the multilateral effects will be on the American currency. What is certain amongst the international financial institutions and central banks is the reduction in reserve currency usage of the dollar.

This reduction will have an effect on the international valuation of the USD and the domestic economic performance of the United States, some of which will be positive and will lead to actual job creation growth.

There are multiple angles from which the macroeconomic analyst can view the transition away from the dollar as the primary reserve currency. The obvious and factual originating point of change comes with the reduction of liquidity in the USD asset market, and the rise of a multilateral source of international liquidity, in this case represented by the SDR of the International Monetary Fund.

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More Confirmation of SDR/RMB & Upcoming POM Announcement

Updates from the IMF Spring Meetings

By JC Collins

During a live question and answer session at the Spring Meetings of the International Monetary Fund and World Bank, Managing Director Christine Lagarde once again reiterated that China has formally requested the inclusion of the renminbi currency in the SDR basket composition.  She also stated that Chinese efforts towards economic reforms, such as opening up capital accounts, has been supporting the case for the yuan.

The expansion of the membership list of the Asian Infrastructure Investment Bank and the growing framework of the Eurasian Development Bank, with probable regional currencies, is creating additional leverage on both America and the IMF to ensure that quota and governance reforms are implemented and that the yuan is included in the upcoming SDR review.

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The (Un)Inevitability of War Between China and America

And the Destabilization of North Korea

By JC Collins

As the world continues the shift from a unipolar American dominated world to a multilateral world based on the fair political and economic representation of all countries, there remains flashpoints of tension and possible conflict in regions of the world which have acted as hinges, or gateways, for American hegemony.

The war and political back and forth taking place in Ukraine is one of these regions. The area acts as a natural divide between the Russian geopolitical sphere and the American hegemonic European sphere, a sphere which is now slowly moving away from US dominance and into the multilateral framework.

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Hume’s Multilateral Adjustment Mechanism

By JC Collins

As the Special Drawing Right (SDR) rises to its position as primary reserve asset used in global trade, other countries outside of the current 4 which make up the composition, will seek to have their own domestic currencies added to the supra-sovereign asset basket.  China’s yuan is the obvious inclusion on this 2015 go around, but India, and other emerging economies, will likely be internationalizing their own currencies over the next 5 years to ensure they are included in the 2020 adjustments which will be made to the SDR basket composition.

As the USD is replaced with the SDR, we are likely to see the progressive implementation of a Multilateral Effective Exchange Rate Structure (MEERS) as both high income countries and low income countries will promote the benefits of pegging their domestic currencies to the SDR.

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