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 framework.
This transition will require the broader internationalization of the Chinese renminbi, along with methods of expanding RMB liquidity, such as the AIIB and BRICS Development Bank.
We have reviewed how debt restructuring will become the hot topic, which it now has, as the IMF begins to promote the sovereign debt restructuring process as a priority over continued bailouts.
We have concluded that China would announce, for the first time in 6 years, their actual gold reserves in the lead up to the decision on including the RMB in the SDR basket composition. With the preliminary SDR announcement only days or weeks away, it is not surprising that China announced their updated gold reserves today.
The POM analysis concluded that the price of gold would continue to go down throughout this process. That is exactly what is happening.
There has been a convincing case presented here that each crisis would lead to further consolidation and loss of sovereignty. That is exactly what we see happening in Greece.
This will soon spread to other distressed countries.
It was stated here back in Feb that direct management of Greece’s banking system would be given to the ESM, or European Stability Mechanism, and that Syrzia would be the trojan horse used to integrate Greece deeper into the union and implement a greater loss of sovereignty. That is exactly what has happened.
When others were stated that gold was going to skyrocket to $10,000/oz and China’s gold reserves were going to be tens of thousands tons higher, the POM analysis maintained a realistic analysis and trending of the facts.
When others stated that China, and the BRICS as a whole, were going to overthrow the western banking system, the POM analysis stated that the BRICS institutions would be integrating within the larger international monetary framework, and work with other multilateral institutions, on engineering the transition.
When others stated that China would never have anything to do with the IMF and the SDR, and that the SDR was dead, the POM analysis continued to review the actual process of adding the RMB to the SDR and how this would unfold.
It has since become accepted fact that the Chinese currency will be added to the SDR, and that China has incorporated the IMF’s SDDR data reporting standards in the announcement of their gold reserves.
Philosophy of Metrics was created to grow a broader understanding of the macroeconomic trends and esoteric patterns which weave in and out of the systems of the world. The education of the masses on these extremely important topics and events needs to continue.
The points made in this post only partially represent the accuracy of the analysis and trends which are presented here on POM. The complex nature of this transition will continue to evolve as the geopolitical and macroeconomic events shift upon the sands of the history which is yet to happen.
Many have derided me and attacked the analysis and conclusions which have been presented here. But time proves all things, and no other site, or analysis, can prove the level of accuracy which has been presented here over the last 19 months.
The reason for this accuracy is because the POM analysis is based on facts, and a very real process which is taking place in the international monetary framework. This process is attempting to correct the imbalances which have developed in the world’s economy over the last 7 decades.
Once this reality is accepted, the actual analysis comes easy, and proves to be extremely accurate on the broad strokes.
I look forward to continuing to produce these valuable posts and educate all who wish to have a deeper understanding of how the international monetary system functions, and what it’s future will look like.
For those who continue to support this endeavor, and those who see the value of the message being presented here on POM, I say thank you. It means the world to me and my family that so many appreciate the time and effort I put into this all important project. – JC
Subscribe to POM for detailed analysis on macroeconomic trends.
All 3 month and 1 year subscriptions receive access to the epublication series The Economic Transition Papers.