The Replacement of USD Denominated Reserves with Chinese Renminbi Reserves
In yet another sign that the multilateral thesis presented here is accurate and unfolding as planned the European Central Bank announced the switch of USD denominated reserves into Chinese renminbi denominated reserves. The initial re-allocation of reserves is in the amount of 500 million euros and will represent the first of many re-allocations as trade between the EU and China expands with the implementation of the Silk Road initiative and development of the Eurasian Union.
The re-balancing of global liquidity between the USD and RMB is in the early stages but will increase in frequency and volume in the coming months and years. The current composition of the EU foreign exchange reserves are in USD, Yen, gold, SDR and now RMB. We should expect that further re-allocations will take place with the RMB and eventually SDR replacing the traditional USD reserves.
The overall multilateral strategy of Europe re-aligning with the Eurasian continent in place of the Anglo-American arrangement it has held for centuries is a milestone in the history of world geopolitics and monetary frameworks. The re-structuring which is taking place internationally is not broadly discussed or understood by the larger masses and media outlets.
The changes that are now taking place will transform the world unlike any time since the Napoleonic Wars which indebted European royal bloodlines and expanded the central banking structure across Europe. The revolutions and civil wars that followed around the world were a direct result of these wars and restructuring of how the systems of the world functioned.
Equally so today we are experiencing a massive migration of cultures and a major shifting of the old world borders and alliances which have been maintained for centuries. The function of the Napoleonic Wars and revolutions has been replaced by the War on Terror and the transformation of mass demographics around the world through migration and the fragmentation of nationalism.
We have previously discussed the new modern nationalism which Brexit and Trump represent, but it should be noted that this new modern nationalism is in fact the fragmentation of true nationalism under the weight of a descending new world framework and system of governance. The package is being sold to individual and specific subset demographics through whatever presentation works best in that region, with common strategies overlapping across the terrorism and migration themes.
Each movement and phase of the transition from the USD denominated framework to the multi-currency and multipolar framework will be weighed and measured before implementation. The fluctuation and allowance for flexibility in the transition is allowing for small individual movements within a well-defined boundary.
The end result must be a rebalanced international monetary system with a new global governance framework put in place which determines the direction and movement of individual nations so the collective whole is managed effectively. Whether we agree with this direction, or not, is irrelevant as the power and influence behind the strategy will not be denied.
The internationalization of the Chinese renminbi is one of the top priorities which will be pushed and encouraged across the geopolitical and monetary spectrums. New alliances will develop based on the amount of reserve holdings of the USD and RMB. It would be my anticipation that the Eurasian Union will be largely built upon the RMB in much the same fashion that the Anglo-American establishment managed the world under the pound and dollar frameworks for so long.
Outside of Eurasia the dollar will still reign supreme but the ability of the Anglo-American establishment to control and direct the course of the world will now be shared with other partners and through new alliances, as opposed to sanctions and military interventionism.
The reduction of the accumulation of USD foreign exchange reserves will be replaced with an increase in accumulation of RMB foreign exchange reserves, as represented by the recent actions of the European Central Bank. The end objective is a move away from reserve accumulation completely and towards a new SDR based framework which will not require foreign exchange reserve accumulation but will be based on quota amounts and each nations fundamental weighting in the SDR composition.
A substitution account process will eventually be used to replace foreign exchange reserves with SDR quotas. Both processes could overlap one another as the re-balancing and replacement takes place. But one thing is certain, the multilateral transformation of the world is proceeding as planned and there is little that will alter the direction or prevent the realization of the end objective. – JC
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JC Collins can be contacted at firstname.lastname@example.org