POM EXCLUSIVE: The Bretton Woods Origin of the Cold War (FREEPOM)

JC CollinsEconomics, FREEPOM27 Comments

Counter-Intelligence, Atomic Bombs, Operation Paperclip, and the Liquidation of the British Empire

By JC Collins

The day was dull and mild when I stepped out of my truck last January in downtown Edmonton. It had just snowed, the wet sloppy kind, and I splashed my way across the street and entered the Tim Hortons coffee shop on Jasper Ave.

The night before I had received a comment on the site which started with PLEASE DO NOT POST. At the time there was no way for interested readers to contact me direct without submitting a comment. The message was very concise and stated that there was information I could use regarding the Bretton Woods Agreement.

Hedging the Coming US Dollar Depreciation

JC CollinsEconomics, Premium POM18 Comments

Strategies for Central Banks & the Average American

By JC Collins

The terms depreciation and devaluation are often used in an interchangeable context. Though this is not always a big issue, as the intent for the average layperson is clear, it is worthwhile to take a moment to clarify the terms and ensure we understand the difference.

Depreciation is brought about when there is a change in the supply and demand side of a currency’s exchange. When there is less demand for a currency, that currency will depreciate in value, like any other asset.

In turn, when the demand for a currency increases, the value of that currency will also increase. A suitable example of this process is the global demand for US dollar denominated assets in the foreign exchange reserve accounts of the world’s central banks.

The China, Russia, Iran Axis and the Creep of Monetary Reform

JC CollinsEconomics, Geopolitical, Premium POM17 Comments

Could a Regional Force Turn Against Saudi Arabia & Israel?

By JC Collins

With the growing concentration of military power in Syria comes the increased potential of a major regional conflict. Such a conflict, between China, Russia, and Iran, as well as Syria, on one side, and the US, Jordan, Saudi Arabia, France, Canada, Australia, Britain, etc.., on the other side, could very well be considered a war involving the world’s major powers.

But consider the possibility that such sides will not materialize, and influential leaders will be successful in their attempts to organize and consolidate all under one collective mandate. With Germany’s Angela Merkel stating today that Assad must be a part of any Syrian peace talks, and Russia and China both becoming more involved in the conflict, such a possibility is now appearing to be more probable than it would have appeared only a few weeks ago.

IMF Interim Reforms and the December Target

JC CollinsEconomics, Premium POM10 Comments

Foreign Exchange Reserves in the Context of Interest Rate Increases

By JC Collins

“Our interest in strengthening the Fund is not based on esoteric notions of global leadership or nostalgia for institutions that the United States created. Rather, we have learned from hard-won experience that a well-resourced and effective IMF is indispensable to achieving our economic and national security interests.”

This was a statement made a few days ago by US Treasury Under-Secretary for international affairs Nathan Sheets when giving an official statement surrounding the US Congress’s failure to meet the September 15th deadline on the 2010 Quota and Governance Reforms.

Potential Path Forward on Fed Rate Increases

JC CollinsEconomics, Premium POM6 Comments

Sovereign Wealth Funds, Reserve Diversification, and Capital Flows

By JC Collins

There are wide assumption being made, and rightly so, that the Fed has put itself into a corner and cannot raise interest rates. It’s the hot topic of the week and passions over another delay are running high. Whether there is domestic justification for a rate increase or not, the lack of justification internationally has widely influenced the Feds decisions, as outlined in the official announcement.

It has always been my contention that there are ways out of this seemingly unavoidable trap. Any multilateral framework at some point would have to account for the disparity in interest rates and balance of payments.

Predictions of a Sept Crash Fade (FREEPOM)

JC CollinsEconomics, FREEPOM50 Comments

Also see updated information in today’s post titled Potential Path Forward on Fed Rate Increases – Sovereign Wealth Funds, Reserve Diversification, and Capital FlowsBut Dreams of a 2015 Rate Increase RemainBy JC CollinsWith the announcement by the Fed today of no interest rate increase, the hopes and fears of a … Read More

The Other Reason for a Fed Rate Increase

JC CollinsEconomics, Premium POM24 Comments

And What Could Help Stabilize Stock Markets

By JC Collins

Last night Marianne and I were watching Donald Trump on television give his speech in a Dallas arena filled with 18,500 people. Along with his usual script of “making America great again” he said that there is $3 trillion outside the country which he will be bringing home. We both looked at each other and mouthed the words “what the %$&@!”.

The statement appeared to slip past unnoticed, and it was not referenced or discussed by anyone after the fact.

It is very clear to me that Trump is reading from the same script as the macroeconomic transition to a multilateral monetary framework which has been widely presented here. The diversification, or reduction, if you will, of Treasuries in the foreign exchange reserve accounts around the world, and the overall depreciation of the USD, will all amount to increased US exports and domestic production.

Are You Ready for the IMF Governance Crisis? (FREEPOM)

JC CollinsEconomics, FREEPOM9 Comments

By JC Collins

Back in May I published a piece titled China Gold Deposits to the IMF – The Lima Accord and Gold Valuations. In that post we reviewed how the gold repatriation which has been taking place is in fact a reversal of the gold which was deposited with the Federal Reserve during the establishment of the USD structured system at Bretton Woods in 1944.

With the arrival of a new monetary framework, countries will need to transfer their gold deposits from within the dollar based system, to the multilateral based system. This system is being structured around the International Monetary Fund and the SDR asset. And like during Bretton Woods, gold deposits are about to be consolidated once again, this time within the multilateral framework of the IMF itself.

The SDR Conundrum

JC CollinsEconomics, Premium POM28 Comments

The Science of Moral Hazard

By JC Collins

BANG. The world just ended.

Not really. But let’s consider the broader ramifications of using the SDR as either a reserve asset, or a method of diversifying foreign exchange reserves through the substitution accounts of the International Monetary Fund.

While poking the doom and gloom analysts with the stump end of a stick, I’d also like to give them kudos for understanding the human nature aspect of the multilateral transition. It will all end in madness once again. This I cannot disagree with, as I’ve stated many times myself that any new system will corrupt again in a matter of years.

But how will this corruption happen? And how long will it take for it to begin?

The China Disequilibria (or why the PBoC is really reducing Treasury Reserves)

JC CollinsEconomics, Premium POM1 Comment

The Coming Floating Exchange Rate Arrangements & Reserve Reductions

By JC Collins

On the morning of November 7, 2009, finance ministers and central bank governors of the G20 countries gathered at the seaside Fairmont resort in St. Andrews, Scotland. The main topic of discussion was the ongoing financial crisis which began back in 2007. Though it could be argued that it began during the Asian crisis of 1997 and 1998.

The crisis itself was the result of unsustainable and systemic current account imbalances between the major economies, as well as a failure of integrating the emerging economies into the global economy. The commitment made at the G20 meeting involved rebalancing the international monetary system (IMS) by reducing account surpluses and limiting account deficits.