Aloha from the South China Sea (FREEPOM)

JcollinsCultural, Economics, FREEPOM, Geopolitical, Multilateral Investment Strategies9 Comments

Chinese Capital Outflows and the Buying of American Business Interests

By JC Collins

Early last year the Chinese government threatened the United States with funding and arming Hawaiian independence activists who want to restore the islands’ constitutional monarchy. The story passed with little fanfare until just days ago when the Chinese made a comparison between setting up defensive arms on the man-made islands in the South China Sea, to the US establishing military facilities on the Hawaiian Islands.

The Effects of RMB Appreciation

JcollinsEconomics, Multilateral Investment Strategies, Premium POM

And Why the TPP and AEC Trade Agreements Offset the Negative Aspects

By JC Collins

Back in October of 2015 I wrote a post titled TPP and AEC – Parallel Trade Agreements. It presented the trade agreement aspect of the monetary transition and suggested that both agreements are intended to address the changes to the international trade model as the US dollar begins to share reserve responsibilities with the Chinese renminbi.

It also discussed another previous post from May of 2015 titled The Secret of the TPP – The Coming Interest Rate Increases and Dollar Depreciation. Both articles together lay the groundwork for understanding the short-term measures and long-term strategies which China and the international community as a whole, are implementing in order to capitalize on the forthcoming appreciation of the renminbi and depreciation of the USD. The negative aspects of these exchange rate changes are also considered within the developing framework of these agreements.

Don’t Fear a Crash of the Dollar

JcollinsEconomics, Multilateral Investment Strategies, Premium POM

Dollar Depreciation and Renminbi Appreciation
By JC Collins
Last July I published a post predicting that the US dollar would begin to depreciate at the beginning of 2016. This date range was based on the effective inclusion date of the Chinese renminbi in the Special Drawing Right Basket (SDR) of the International Monetary Fund.
Other factors which were considered was the eventual passing of the 2010 IMF Quota and Governance Reforms in the US Congress, which did in fact happen as predicted by the end of 2015.
The start date of the Asian Infrastructure Investment Banks (AIIB) and the BRICS New Development Bank (NDB) also helped determine the date range provided. The AIIB just celebrated its official launch and it was communicated that the first infrastructure loans would be issued in the second half of 2016.

How China is Deleveraging from the USD (FREEPOM)

JcollinsEconomics, FREEPOM, Multilateral Investment Strategies19 Comments

By JC Collins

On December 29, 2015, in the post The Myth of China Dumping US Dollars, I wrote the following in regards to the past accumulation of USD by the People’s Bank of China:

“The PBoC continues to keep the renminbi weak against the dollar for the purpose of purchasing US dollars which are accumulated by Chinese business and exporters. The People’s Bank of China borrows renminbi in order to purchase these dollars.”

“Once purchased, the PBoC cannot sell renminbi as it would be inflationary. Same as the US with dollars. In order to prevent excess inflation, the PBoC issues new debt and raises the required reserve ratio of capital held by Chinese banks. This has led to the increase of domestic debt within China.”

Right on Target

JcollinsEconomics, Multilateral Investment Strategies, Premium POM

AIIB to Start Lending by Mid-2016

By JC Collins

The Asian Infrastructure Investment Bank will hold its inaugurating ceremony on January 16th in Beijing. These opening board meetings of the China-led development bank will establish the management team of the bank and name a president.

Founding members of the bank include the BRICS members, ASEAN members, and EU countries such as Germany, France, Italy, and staunch American ally, the United Kingdom. The founding members of the AIIB total 57, with more members welcome in the future.

The implementation of this bank, and the diverse founding members list, amounts to a drastic shifting in America’s hegemonic monetary positioning in the world. Alliances are shifting, which is semi-isolating US interests across a broad spectrum of socioeconomic and geopolitical fronts.

China Just Ended the Dollar Peg (…for the most part) FREEPOM

JcollinsEconomics, FREEPOM, Multilateral Investment Strategies26 Comments

Rise of Multilateral Exchange Rates & the Feds Rate Hike

By JC Collins

On March 25, 2015 I published a post titled When Will China End the Dollar Peg. In that post we speculated that the USD based managed peg of the RMB will be removed before the end of the year. Just in time for the implementation of the AEC trade agreement which starts on January 1, 2016.

As we can now determine, China has in fact created an alternative valuation for the renminbi which will function outside of its dollar based exchange rate arrangement. This new composite index will help stabilize the Chinese currency as the Federal Reserve begins the process of policy normalization through incremental interest rate increases.

The Coming Commodities Boom – Redux

JcollinsEconomics, Multilateral Investment Strategies30 Comments

BRICS Development Bank Loans and Emerging Infrastructure

By JC Collins

Back on October 13, 2015, I published an article which defined the coming commodities boom and the investment opportunities it would produce. Since that time the Chinese currency has been officially added to the Special Drawing Right composition with an effective start date established for October, 2016.

It has been my conclusion all along that the renminbi would be widely used to fund this infrastructure development with RMB denominated loans being issued through both the BRICS Development Bank and the Asian Infrastructure Development Bank. I also stated that this would happen at a pace which would surprise many.

Hedging the Coming US Dollar Depreciation

JcollinsMultilateral Investment Strategies, Premium POM3 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.

Introducing POM Multilateral Investment Strategies (FREEPOM)

JcollinsMultilateral Investment Strategies, Premium POM2 Comments

By JC Collins

With so much written and documented regarding the multilateral monetary transition, and the reality of such a transition becoming more apparent by the day, many readers have begun asking for detailed information on multilateral investment strategies. As with the POM thesis itself, I will approach this request with nothing but the most committed of efforts, with a strong focus on getting the information as accurate and honest as possible.

The personal wealth of readers is something which I do not take lightly, as our wealth is the accumulation of our time and labor. Knowing how hard I work on producing the virtual library of information which is available on POM, I do not intend on providing distorted information which others will use to invest and protect their own time and labor.