The Sovereign Debt Complex

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How China and America Are Waging a Quiet War over Sovereign Debt Restructuring

By JC Collins

Note: This large article of 2300 words is one of the most important pieces I’ve written on the multilateral transition, as it ties much of the previous material together to present the reader with a conclusive and realistic analysis of what is happening internationally, both economically and geopolitically.

The most pressing issuing facing the international monetary order today is the threat of sovereign debt defaults and the loss of confidence in sovereign bonds. The sovereign debt crisis is growing at a brisk pace with most of the attention on Greece. But many other countries could quickly slide into the limelight and steal the show. Some of these countries are Spain, Italy, Ireland, and even the United States.

If China can successfully cut the United States out of the South China Sea, than it would put immense pressure on Japan, another larger holder of US debt, to support the SDRM solution to sovereign debt restructuring. Japan, a country on the verge of its own sovereign debt crisis, much like Greece, cannot hold out much longer before a solution will need to be implemented. Both Japan and Greece will take the world with it, including China and the United States.

Warning on Scams (FREEPOM)

JcollinsEconomics, FREEPOM, Premium POM32 Comments

Dinars, Chinese Elders and Dragon Families By JC Collins The importance of this post stands apart from the majority of the material on POM.  The relevance and timing of this information corresponds with the evolution to some of my own initial assumptions and the full application of logic.  The post … Read More

Learn Why The US Dollar Will Not Collapse

JcollinsEconomics, FREEPOM52 Comments

Since 1944 the currency of the United States has been used as the primary reserve asset in the international monetary system. The use of a single domestic currency such as the USD as the global reserve currency has caused large systemic imbalances in the global financial framework. These imbalances have … Read More

The Cashless Society

JcollinsCultural, Economics, Premium POM35 Comments

The elimination of paper currency and the inevitable end of anonymous transactions are fast approaching. As frightening as this reality may be, there are both pros and cons to the reduction of paper currency in circulation and the regulated use of electronic currency.

The obvious con is directly related to individual sovereignty and privacy rights. The ability to perform anonymous transactions will become impossible under the protocols of a cashless society. For many, this seemingly natural right to remain anonymous is unfortunately overshadowed by criminal activity and underground economies, both of which are supported by paper currency in circulation.

One method of reducing paper currency which has been discussed is to hold a reverse lottery of sorts, where random note serial numbers are pulled, at which point they become worthless and are taken out of circulation. Anyone holding the lottery notes would instantly lose the associated wealth. Under such a program there would likely be a rush of paper currency back to the central bank as wealth retention is sought.

It’s a freakish catch-22 when systemic deflation is growing by the day, which in turn leads to the hoarding of cash. The central bank answer to the deflationary shocks is to go even deeper into negative interest rate territory. But this negative interest rate policy, and associated savings debit, will also lead to the hoarding of cash, as individuals attempt to protect their wealth from confiscation. The obvious solution, from a central planning perspective, is the elimination of paper currency in circulation.

The Secret of the TPP

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The Coming Interest Rate Increases and Dollar Depreciation

By JC Collins

The Trans-Pacific Partnership is being promoting as an opportunity for the United States to boost exports and create more domestic jobs. The reluctance of most Americans to accept this salesmanship at face value exists for good reason.

Trade agreements of the past, such as NAFTA, have not particularly benefitted the average citizen of the United States, Canada, or any other country that has entered into FTA’s of any sort. With that being said, one of the main reasons for the continued disparity of past trade agreements is centered on the inability of authorities to address exchange rate manipulation and currency mismanagement.

The Mechanics of a Vietnamese Dong Appreciation

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One segment of this multilateral shift has to do with using exchange rates as a method of correcting the imbalances. It has been determined that appreciating the domestic currencies of trade surplus countries is a viable rebalancing strategy. This is likely what is behind so much of the “global currency reset” talk and conspiracy which has built up online over the last 5 years. It is not a coincidence that talk of this sort began at the same time as 2010 IMF Quota and Governance Reforms and announcements from China on moving away from the USD towards a supra-sovereign (non-domestic) asset, such as the SDR, and discussions around the sovereign debts of historical bonds.

The SBV is unable to contract the money supply because that would mean purchasing less government bonds and ending the managed peg to the USD. The multilateral framework is not yet ready to support such a move by Vietnam, but could be by Jan 1, 2016, which is when both the AEC trade agreement and new SDR composition, which will include the Chinese currency, will come into effect.
The State Bank of Vietnam, or any other central banks, have the ability to bring money in and out of existence. As such, a method of reducing the money supply, once the VND ends the peg to the USD, could simply entail purchasing additional government bonds with the existing money supply, as opposed to creating new money supply. This would take money out of circulation.

China Gold Deposits to the IMF

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The world has never used a supra-sovereign (non-domestic) currency as the global reserve asset, and as such, there are some unknown factors which could swing valuations and volumes. The agreement between all countries and global institutions on a multilateral framework has been in negotiations since at least 2009, if not earlier. Many of the geopolitical and macroeconomic adjustments (such as the tension with Russia and the Swiss franc depeg) are symptomatic of the challenges presented by attempting to draw all countries into a multilateral framework.

There are so many moving pieces to this transition, but some semblance of pattern is beginning to take shape. Based on the demand of China to have their own domestic currency added to the SDR composition, and the agreed upon accumulation of gold by China, along with the “multilateralization” of gold exchanges, such as in London, and the rise of the yuan denominated SGE, can be interpreted as early indicators of the intent of Chinese authorities to place a large amount of gold on deposit with the IMF, in anticipation of the implementation of the SDR as the global reserve asset.

The Rise of the Philosophical Class

JcollinsCultural, Esoteric, FREEPOM28 Comments

The attempts at replication between all layers and levels of our socioeconomic framework unfortunately focuses on mundane and self-defeating obsessions, such as mindless entertainment, substance abuse, rumor and fear mongering, being better and faster than the rest, all take and no give, pornography, illusionary sexual ideologies and pairings, and all other forms and methods of lowest common denominator methodologies and mannerisms.
The emergence of advanced technologies, such as AI and robotics, which will find one of its ultimate purposes in the autonomous replacement of all human labor, will leave humanity with an endless yearning for more. We will attempt to live vicariously through our artificially conscious companions and servants, and perhaps in time even seek union with them through the mandates of Trans-Humanism. But it is my contention that humanity is now entering a period, or feedback loop, where the esoteric philosophy of the old world is gaining ground in the minds and hearts of those whom least suspect, or want it to happen.

Will the AIIB Use SDR as the Currency of Settlement

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By JC Collins

It is interesting that the countries which have joined the Asian Infrastructure Investment Bank (AIIB) are now the same countries which are supporting the inclusion of the Chinese currency in the basket composition of the Special Drawing Right of the IMF.

The currency of settlement which will be used by the AIIB has been widely speculated over the last few weeks and months. There has been talk of an AIIB currency basket, and the discussion around using the USD as the currency of settlement.

A unique AIIB specific currency basket is likely a non-starter as the time and negotiations required to construct and implement such a regional currency basket will not align with the operational timeframes of the AIIB itself.

Chasing Ghosts

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The Prison of Our Mind

By DeeJJ

It is perceived by both the rent seeking elite and disorganized masses that there is an eternal enemy that lies beyond our control. It is labelled in various ways depending on the belief structure of the current society. Within the construct of religion, for example, the enemy is presented as a daemon or devil; a heartless evil creature that has the power to lure those of weak virtue into acting on more primal impulses such as murder or promiscuity. The stakes are high in the battle of good vs. evil, with the soul elevated as collateral. This creates a continuous push and pull within the mind, knowing what is moral, ethical, and righteous while being tempted by mammalian motives