Will China Transfer American Debt to the IMF?

JcollinsEconomics, Premium POM64 Comments

Quota Increases, Gold, and SDR Allocations

By JC Collins

Though not reported elsewhere, the statements by International Monetary Fund Managing Director Christine Lagarde yesterday regarding the failure of the US congress to ratify the 2010 Quota and Governance Reforms are explosive.

“Now, the IMFC, which is one of the key governing institutions of the IMF, has decided that if by the 15th of September this matter is not resolved satisfactorily, then we have to select the interim step that we will take forward in order to make sure that there is an element of down payment on the quota increase.”

The speculation of what is meant by “element of down payment” has given POM readers much to think about.

Before I allow myself to speculate, let’s review some facts.

First, there is little reason, considering the delays over the last 5 years, to expect that there will be a reasonable resolution to this matter. The impasse between the Executive Branch and Congress over the supporting legislation around the 2010 Reforms is nearing an end.

New 2010 IMF Reform Deadline

JcollinsEconomics, FREEPOM27 Comments

During a virtual press release by Chrstine Lagarde today, she was asked the question on the 2010 reforms.  Her answer gives the 15th of September as the deadline for the reforms to be enacted by the United States before the interim steps (Plan B) are implemented. MS. LAGARDE: First of … Read More

This Is When the US Dollar Will Begin to Depreciate

JcollinsEconomics, Premium POM18 Comments

The Made in America Comeback, TPP, AEC, and SDR Composition

By JC Collins

The value of the dollar has been based on international demand and investor preferences for USD denominated assets. The reserve status of the dollar has maintained this demand and preference. Without the reserve status the dollar would have weakened based on the large trade deficit which the United States has developed. Equally, the trade deficit would not have developed if the demand for dollars was not created with the reserve status.

America’s trade deficit is as much a problem for the rest of the world as it is for America. The only way foreign investors in dollars and dollar denominated assets can get paid on their investments is for the trade deficit to eventually turn into a trade surplus.

The First SDR Review

JcollinsEconomics, FREEPOM11 Comments

By JC Collins The press release from the International Monetary Fund on June 23, 2015, covered some interesting and relevant topics which we have been discussing here.  The trend in regards to monetary reform and the multilateral transition is now beginning to align with the macroeconomic policies which are unfolding … Read More

The Consolidation of Sovereignty

JcollinsCultural, Economics, Premium POM25 Comments

Deflation and Debt Restructuring

By JC Collins

Over the last week the International Monetary Fund has increased its communication on the sustainability of debt. It called for the restructuring of Greek sovereign debt, and has now stated that Japan’s debt is unsustainable.

None of this is surprising, as most who follow such things have known for a long time that there is a level of sovereign debt in the world which is unsustainable. The fact that the IMF is now officially drawing attention to this fact has more to do with the preparation for the next stage of monetary easing.

The progression from Quantitative Easing to SDRM (Sovereign Debt Restructuring Mechanism) is something we have covered consistently here on POM. Most readers will recognize that sovereign debt restructuring is the inevitable outcome, or evolution, of the unwinding, or deflation of the existing international monetary bubble.

The Grand Man – Chapter Two

JcollinsEsoteric, The Grand Man66 Comments

The Before the Beginning By JC Collins Thoth, the god of learning in the Egyptian Mysteries, considered the pineal gland to be the source of twenty-six thousand books.  In the first chapter of this series we reviewed how the brain is an embryo attempting to become.  The pineal gland is … Read More

POM Analysis Is Trending Accurately

JcollinsEconomics, FREEPOM32 Comments

By JC Collins This week has brought some interesting trends to the forefront of the international monetary order.  Here on POM we have been trending data and presenting an analysis based on the fundamental process of transitioning the international monetary framework from a unipolar USD based system, to a multilateral … Read More

SDR Negotiations – A Visual Guide (FREEPOM)

JcollinsEconomics, FREEPOM38 Comments

Export Increases and Currency Depreciation By JC Collins The future composition and weight of the SDR basket could fluctuate with the exchange rates of the domestic currencies which will use it as an anchor.  To fully understand how the Special Drawing Right could work as an international monetary unit which … Read More

BRICS Bank and Reserve Fund Support the USD

JcollinsEconomics, Premium POM16 Comments

CRA and NDB Are Integral Components of the IMF Supra-Sovereign Multilateral

By JC Collins

The lack of official information, along with the huge amount of misleading information, in regards to the BRICS institutions and their purpose, has created a vacuum of sorts where false narratives and unsubstantiated claims are spread and promoted. It is important that we understand thoroughly the purpose and intentions of all multilateral institutions and the macroprudential policies which integrate them for the common purpose of monetary reform and stability.

The BRICS institutions (along with further RMB internationalization) will facilitate a reduction of USD in the foreign reserves accounts around the world and allow for the dollar to depreciate, which will facilitate the next arm of economic domestic development for the United States, being the expansion of production and increase in exporting, which will in turn reduce Americas trade deficit and lower the debt-to-GDP ratio.

Unwinding the Bretton Woods Experiment

JcollinsEconomics, Premium POM38 Comments

US Dollar Depreciation & the Return of American Exporting

By JC Collins

This crisis is perpetuated by the fact that the USD is used as the international money clearing unit, a role which was originally designated for a multilateral global currency called the bancor during the Bretton Woods conference, but was vetoed by the United States to the benefit/detriment of the dollar.

Since 2008 the world has been establishing trade agreements and engineering the architecture of the replacement to the unipolar USD based monetary framework with a multilateral framework which will adjust the deficiencies in the balance of payments between nations.

The process of unwinding Bretton Woods is complicated, challenging, and fraught with macroeconomic volatility and geopolitical tension. But the international monetary system is ready for the change.