SDR & the New Bretton Woods - Part Nine

FREEPOM, SDR's and the New Bretton Woods27 Comments

Debt Swaps and Quota Reforms

In order to have a full and broad understanding of the information we have been discussing in this series, we will need to understand something called Sovereign Debt Restructuring Mechanism (SDRM).

“The objective of an SDRM is to facilitate the orderly, predictable, and rapid restructuring of unsustainable sovereign debt, while protecting asset values and creditors’ rights. If appropriately designed and implemented, such a mechanism could help to reduce the costs of a restructuring for sovereign debtors and their creditors, and contribute to the efficiency of international capital markets more generally.” 

The above quote is taken from a 2002 publication by the International Monetary Fund titled “A New Approach to Sovereign Debt Restructuring”.

When previous attempts at sovereign debt restructuring have taken place it was quickly realized that the public sector funds which were allocated for the sovereign debt restructuring did not stay in the country and in fact became something akin to a transfer of wealth.  We have covered this in previous posts with the explanations about rent seeking elites and the importance of putting self-limiting legislation in place to prevent the transfer of wealth from the large disorganized masses to the small organized rent seeking elite.  See What Are Conspiracy Theories?. 

As the International Monetary Fund plans and implements a new and improved SDRM, the sovereign debt crisis in the world gets worse by the day.

It’s interesting that the media will do anything to avoid mentioning or admitting that the US has a sovereign debt issue.  Maybe that’s because the US dollar is the reserve currency of the world and the debt itself, as well as associated inflation, can be exported around the world.  With QE the US began to monetize its own debt.

When the IMF 2010 Code of Reforms eventually get passed and the inevitable debt restructuring begins, the US will have no choice but to go along and allow its currency to be downgraded and its debt restructured.

This is where the concept of debt swaps come in.  Debt and/or equity swaps are when a debt holder, being China holding US debt, can get an equity position in exchange for a cancellation of the debt. When we think of the low price which China paid for the JP Morgan building, can we safely assume that this was a part of a larger debt/equity swap agreement?

There is also another form of debt swap agreement which entails an exchange of debt holdings for new bonds which have been restructured from the original bond debt.  These types of bond debt swap agreements are meant to take advantage of interest rate differences and conclusively, currency exchange rate difference.

In a previous post we discussed the importance of arbitrage and purchasing power parity.  As a lesson from the original attempts at SDRM, purchasing power parity will be an important and functioning aspect of any debt swap agreement, as arbitrage was the main culprit of why the SDRM failed.

It’s within this larger bond debt swap arrangement where I see sovereign debt being restructured through an SDR (Special Drawing Right) system.

Say China exchanges so much of their US debt (in the form of treasury bonds) for equity in the Federal Reserve System itself, controlling a proportionate amount of internal equity within the American system.  This would explain the JP Morgan purchase and other bank purchases, along with industry and real estate which China has been gobbling up within the United States.

The rest of the treasury bonds which China holds as US debt will be allocated as a bond debt swap within the SDR system.  This debt swap will allow China to retain its investment value of US debt while receiving new SDR bonds which can then be allocated within its new renminbi composition at a new exchange rate which more realistically reflects the economic sustainability of its currency.  This bond debt swap can be completed through a substitution account as stated in previous posts.  This substitution account will be denominated in SDR’s.

Many rumors have come out over the last few years about an impending Global Currency Reset.  It is stated that countries hold large foreign reserves of specific currencies, or the sovereign debt of other countries, within their foreign currency accounts.  As do banks.  When these currencies revalue upward, the money creation will be injected into the world economy and help alleviate some of the pressure of the sovereign debts.

In essence this premise is correct.  The SDRM will take into account the M1 money supply of not only the US dollar, but other currencies of the world as well.  Through this process of debt bond swap or restructuring, we will witness something not unlike a Global Currency Reset, though the mechanics of it will be challenging to understand.

As the world financial system makes its transition to the multilateral system as defined by the International Monetary Fund, the World Bank, the Bank for International Settlements, and all the countries of the world, represented by the G20, no old sovereign debts can be carried over to the new paradigm.  This means the bonds of all countries, including select historical bonds which were issued in such volume and value that their omittance in the new system would create large imbalances in each respective countries SDR composition.

A reader sent the following link which explains in more detail the IMF 2010 Code of Reforms and how the Executive Board would be redesigned with the US retaining its veto power over votes.  This document is a perfect example of the convoluted processes and procedures involved in understanding the transition to the new multilateral financial system.

At first the US retaining its veto power on the Executive Board of the IMF seems like a contradiction to what is meant as reforms.  It’s important to recognize that the US needs to approve the reforms of the Executive Board because the 85% vote required can only be met if the US votes for it.  But once the reforms to the Executive Board are accepted, the emerging markets will have equal say over the quota reforms, which only require 70% of the vote.

IMF-board1

Major policy changes to the Executive Board will still require the 85% vote which the US will have veto power over.  But in essence, it’s a wet paper veto as most of the multilateral financial system processes and procedures will be completed through the use and continued reforms of the IMF quotas.

We will get into the quotas themselves in a future post, but they are directly related to the transition to an SDR bond debt swap system.

For the US, the quota reforms are of vital importance because it will allow for the increase of quota injections from the emerging markets, including China, which as we discussed above, will be instrumental in restructuring the sovereign debt of the United States.

We have touched on so many aspects of this new multilateral system in our series titled SDR’s and the New Bretton Woods.  Many of these components have been connected within the overall picture in this post itself.  If any are finding it difficult to understand, I would suggest rereading the main instalments of the series.  As hard as it may be to understand, it is even harder to write about it for the purpose of creating clarity.  It hurts my head and I’m sure there will be mistakes or misinterpretations in how I both understand and explain certain aspects.

Before closing this essay, I’d like to remind everyone of the Hegelian Dialectic component in the overall picture.  In previous posts we have explained how this process of problem/reaction/solution will be used to drive the sovereign debt and currency crisis around the world to extreme levels.  We will see revolutions, like in the Ukraine and elsewhere, and debt defaults and threats of defaults, which will stir the solution offered up by the International Monetary Fund, Bank for International Settlements, World Bank, G20, and other NGO organizations.

As revealed in The Great Work of the Ages, an alchemical process is taking place on the world stage.  From the ashes of the old fiat currencies will rise the phoenix, by way of SDR’s as the new world currency.  It is obvious when deciphered from the documentation of the rent seeking elite themselves.  What we can only hope for is that the components of the new system which are intended to self-limit the wealth transfer activities of the elite will remain in place long enough for the system to transition once again before it corrupts back into itself.  Everything in this world is a corruption of the one true process.    – JC

SDR’s and the New Bretton Woods – Part One

SDR’s and the New Bretton Woods – Part Two

SDR’s and the New Bretton Woods – Part Three

SDR’s and the New Bretton Woods – Part Four

SDR’s and the New Bretton Woods – Part Five

SDR’s and the New Bretton Woods – Part Six

SDR’s and the New Bretton Woods – Part Seven

SDR's and the New Bretton Woods - Part Eight

27 Comments on “SDR & the New Bretton Woods - Part Nine”

  1. This world currency arrangement will allow the global banks to issue currency directly for sovereign resources, more or less, in what you are calling a "restructuring." The sovereign debt is after all a claim on future resources. So putting aside for a moment the dire consequences of this coordinated effort failing, are you putting me in the position of cheering for a system that will enslave us all?

    Thanks for your essays. I am really enjoying them.

    1. That link contains some new information that I have yet to encounter. It states:

      "In January, House GOP leaders told the administration they would approve the IMF language if the IRS would scrap a proposed rule governing 501(c)(4) groups. A Democratic source familiar with the negotiations said the GOP has not moved off that position."

      This obviously spurred the question of what is this IRS proposed rule? See the following link:

      http://www.reuters.com/article/2014/02/28/ccagw-irs-proposed-rule-idUSnBw285782a+100+BSW20140228

      And another connecting both the IMF reforms and IRS proposed rule change:

      http://www.politico.com/story/2014/01/international-monetary-fund-internal-revenue-service-spending-bill-102347.html

      Quotes from the last link:

      "The stakes are big."

      "U.S. trading partners are collateral damage in the political fight over the omnibus. More than three years after brokering an IMF deal in November 2010, Washington still can’t make good on its pledges and is holding up reforms promised to emerging economies like Brazil and India."

      "The world has changed dramatically since the IMF was established in 1945 after the wreckage of World War II. Emerging economies need to play a greater role, and the U.S. has a stake in facilitating this process while also making good on its own pledges to maintain its leadership position in the IMF."

      Strange that no other so called "freedom" websites are talking about this IRS proposed rule change which is meant to curtail freedom of speech. Why would the IRS and Treasury Department want to limit political opinions of not for profit organizations? By focusing in on the micro we can better discern the structure of the larger macro.

      1. THE RUSSIANS ARE TAKING CONTROL OF THE UKRAINIAN GAS PIPELINE REGION TOO FORCE THE E.U. TO SUBMIT TO DEFECTING FROM THE DOLLAR and thus DEFECTING FROM THE U.S.A. !
        http://www.theguardian.com/world/2014/mar/03/europes-gas-supply-ukraine-crisis-russsia-pipelines
        This goes hand in hand with the Russian Iran China alliance on the Islamic Pipeline and a new Desired Currency pricing system other than the petrol dollar . http://www.examiner.com/article/it-s-not-about-the-chemical-weapons-it-s-about-the-syrian-pipeline
        http://shariaunveiled.wordpress.com/2013/09/06/the-truth-behind-the-war-in-syria-the-qatari-natural-gas-pipeline-obamas-war-for-oil/
        China is behind this all the way . The USA is trying to get China to side with them but China wants a New World trade currency out of this too and it be them ,
        They are trying to SPIN it as a China and US against the Russian Bear but thats not the truth ! http://www.washingtonpost.com/politics/hoping-to-isolate-russia-us-woos-china-on-ukraine/2014/03/10/15dfba00-a8b3-11e3-8a7b-c1c684e2671f_story.html

        In April at the G 20 we will be formally introduced to this new world order !
        The Ukraine alliance has been KEY to a dollar pricing system into the EU , and they are going to be forced to DEFECT by RUSSIA saying they control the route totally and if they want Gas they will agree to new SDRs proposed to the IMF and World bank , which approve of a new trade currency .
        http://www.reuters.com/article/2014/03/11/us-eu-energy-russia-gazprom-idUSBREA2A0ZT20140311
        RUSSIA PUSHES DEEPER INTO UKRAINE !
        http://www.woodradio.com/articles/breaking-news-478151/russia-military-moves-deeper-into-ukraine-12114037

  2. Why would the IRS and Treasury Department want to limit political opinions of not for profit organizations? "

    “The IRS proposal would arbitrarily designate such common practices as 'Candidate-Related Political Activity.' The new rules would not only prohibit long-standing practices, they would also severely restrain free speech by restricting any criticism of an incumbent federal, state, or local politician within 30 days of a primary or 60 days of a general election, and effectively requiring groups to remove any reference to politicians from their websites or any other publications during those time periods."

    From the above article posted already: http://www.reuters.com/article/2014/02/28/ccagw-irs-proposed-rule-idUSnBw285782a+100+BSW20140228

    What I'm thinking is, if the US along with many other countries are giving up their sovereign economic decision making to larger entities like the IMF, BIS, WB, then the thinking and opinions of the disorganized masses (and ability to access information) will have to change to support such a shift without revolution or revolt. This legislation shows how centralized decision makers want control over the most sovereign aspect of a human, which are their thoughts and ideas. In the generations after X, I have a feeling their minds will be so indoctrinated that they will support any centralized decision making without any understandable concept of free thinking, freedom of speech or the awareness of human sovereignty. In fact, whoever may be moving towards free thinking will be rejected by the masses and forced to conform. The large majority of humans need to retain a certain level of social connection and community to (for lack of a better term) keep from going insane.

    Dr. Courtney Brown has been making "Implication" postings around the topic of information control and mass consciousness manipulation:

    "“The Powers That Be” have essentially unlimited resources, both financial and physical. They use these resources to monopolize the information that the masses are shown, for that is their only truly effective means of controlling what the masses believe. They know that no movement can successfully challenge this control without the dissemination of new information that contradicts the flow of stories that solidifies their power. Direct censorship never works well, for there are always attempts to circumvent it. But since any input of new information requires a minimum threshold of resources to be effective, the highest priority of “The Powers That Be” is to financially starve potentially respectable sources of dissenting information."

    https://www.facebook.com/courtney.brown.7568596?sk=wall

    I watched a movie on Netflix last week called "The Wave". A teacher showed his students (who are German and didn't believe they could ever return to a Fascist Dictatorship) how it is done. It was an interesting movie also depicting how the leader will become an egomaniac by relishing in the subservience and worship of his followers.

    The NWO (Agenda 21, Basil 3, and 2010 IMF Code of Reforms) are extremely organized plans to move the world into this centralized control grid. The slow implementation of these plans will control and affect every aspect of a person's life and are more comprehensive than the experiments in societal design in Nazi Germany, Communist Russia and Communist China.

    I remember hearing a saying, that humans are easier to train than animals. Based on my own interaction with people of many ages from many walks of life... I believe that even if true information is accessible the majority of people have been so well trained that the cycle of human slavery will continue onwards. And if at any time there is revolution and the structure of our current system changes, there will eventually be corruption and control again.

    It feels like we have been here before, like time is cyclical, history repeats itself, and there is a natural human desire for consolidation but a spiritual desire for expansion. These two forces always in opposition, and constantly a battle within every human being. What we perceive as our outer world is a manifestation of this inner dichotomy.

    1. Wonderfully written comment. I've strayed away from the social engineering aspect of civilization so we could focus on the structure and integration of the multilateral system itself. Since we discuss things in patterns, its obvious to see that the banking influence in this world has funded many ideologies and systems of control. As you mentioned, Nazi Germany, Communist Russia and China, even Pol Pot in Cambodia, where time was set back to year zero, have been experiments to perfect a process of social engineering for future implementation.

      The Nazi program of eugenics was originally started in America by Margaret Sanger and her associates. See the book War Against the Weak by Edwin Black. This program was funded by western banking interests from its inception and continued to be funded by western banking interests in Nazi Germany. The results of the studies which took place in the camps were exported back to America and were used in many medical and social programs. The Human Genome Project is a direct extension of this eugenics program from the early 20th century. As a side note to that topic, the website Ancestry.com scares the hell out of me.

      You mention that we require some form of social interaction to maintain a level of natural sanity. I agree. In fact, it is my contention that the whole internet social media concept was engineered and released to the public at large as a social experiment and program. Facebook, Twitter, etc.., are all simply the simulacra of our natural social or tribal interaction. See the book Simulacra and Simulation by the French philosopher Jean Baudrillard.

      To close my comment, I would like to express my opinion that the rise of autism, aspergers, and other associated "mental disorders" are simply the natural response of the "human entity" to this social engineering of our minds.

      Starting this blog has been a rewarding experience for me. To interact with others out there, like you and the rest of my readers, brings much joy to my life. To share understanding and resources reduces the loneliness which is born from the collective ignorance. I am encouraged. - JC

  3. JC,

    Allthough I like your work on the SDR issue I can't see them resolving anything cause they do not address the problem which is corruption and greed which still is the issue and the distribution of wealth who still doesn't go to the people but to the "controllers".

    If it smells like a duck looks like duck then it's most probably a duck no matter if you call it anything else.

    The SDR ideals do NOT answer to that fact. They are truly just a bandaid. Like start the game over, but without taking the crooks out and changing the rules.

    Oliver

    1. Oliver, I agree with you about the sustainability of any new system. I see attempts at cleaning up the system in the banker "suicides" and banker arrests and convictions in other countries. The issue we are facing is a human one. How do we prevent the process from always corrupting? Alchemists down through the ages have attempted this and failed. We all need to solve this mystery for ourselves. Perhaps processes are meant to self-corrupt.

  4. The basic human dna programed traits of human beings' need to survive in a self assigned comfort zone and overall dominance of fellow humans leads to dishonesty, corruption, greed, misappropriated power which imo can't be changed It will always be a problem of the greater good of human existence, therefore society as a whole needs to regulate in order to neutralized this human need
    We saw how devastating to the social order this human need, trait can be without proper social regulation in 2007/2008
    Griff

  5. How can you stop a person in a position of power, from being bribed or blackmailed? the answer is to give back power to everyone by local representation, they can't buy everyone. Select one person from your street (no one puts themselves forward) who you know to be kind and honest with a good heart, and have them as your representative. They in turn vote for and area rep, then a district rep and so on to representation for your country. Best Wishes. Bill...

  6. This blog has become one of my favorites. The quality of information and logical thought from JC along with the readers responses is great. I personally like that the writing is respectful and not fear based or emotionally charged. Although the topics discussed affect everyone in different and significant ways, may induce a sense of uncertainty or fear, the information presented on this platform allows us to have a bird's eye view and see the forest through the trees (like learning about the 2010 IMF Code of Reforms).

    Being able to take a step back and interpret events as they are is empowering. To have the understanding and awareness of what is taking place without fighting against or being attached to an outcome that may not be possible for humanity at this time allows for more maneuvering and creativity within the current paradigm.

    A few years ago after unplugging from the matrix per se, it was very challenging... in the sense that interpreting new information that is either skewed or emotionally charged can lead to confusion. Having to rewire neuro pathways and reprogram belief systems is not easy, but worth it. I'm sure many people reading this blog can relate.

    One of my favorite speakers, Gregg Braden, talks about the shifting paradigm. How people are waiting and wanting things to return to the way it was... like the Republic of the USA being restored. When in fact, after compounding events that have taken place on a macro level, we will never return to where we once were. If a human experiences suffering or a trauma, they will no longer be the same person... ever again. If anyone is interested, here is a Gregg Braden video:

    https://www.youtube.com/watch?v=pr0QpwNSaVo

    Moving forward into this great consolidation, the world will be rocked and we will never be able to regain what is lost. There is the "should be world" and "as is world". Living and longing for the past is a trap. So is waiting for the future. Personal power is lost in both.

  7. I'd like to add my own perspective on humanity. I used to often use the terms "sheeple" or refer to others "less conscious" as "sleepers" and more. While to a certain degree, there is some validity to this labeling, what is often overlooked by the labeler is that they themselves possess the same traits. The so called awakened, aware, or conscious individuals may be fooling themselves into believing they are not any of the above if they are not willing to be a shepherd themselves. My point here is that, the individual forms his/her own reality in thought before it manifests into physical existence. This, IMHO, is the key to the so called "controllers" having the ability to control. They present an image for our consumption and we happily oblige, whether it be gobbling up every word FOX broadcasts or agreeing with everything Alex Jones, Jeff Rense, David Wilcock, or any other self proclaimed insider, informer, or guru says. If instead, the individual could unplug for a moment, slow down the endless cycle of noise and look within to use their own powers of intuition as a guide, they might find they wouldn't need the imagery of others. If we could only locate again the ability to form our own image through our own experiences and intuitions, physical existence would quickly follow suit.

    Imagery is the key. Despite the appearance of events, I simply do not believe the powers that be are as powerful as they project themselves to be. They serve a purpose, and it is to serve as a reminder of what every single human is capable of, or requires to keep the illusion alive. Humanity must be willing to take the next step and take personal responsibility for all that is unfolding. Until we are willing to change the proverbial "man int he mirror", to expect the world to do any itself is insanity.

    Despite how easily manipulated and controllable humans seem to be, I believe it is totally dependent on the perspective of the observer. My own experiences have provided both extremes. Before I admitted myself and my consumer driven , technologically dependent lifestyle as part of the problem, my experience kept looping "sheeple". Now, 3 years after I have done a 180 and am trying to do everything I can for myself and my family, my experience has given me the opposite; people who are like minded, free thinking, and critical of the madness unfolding keep showing up in my experience. People are far more aware collectively than most "aware" folks think. this being said, before humanity can truly move forward, we must take a hard look at how we go here and decide what we, the individual, is willing to do about it.

    No matter what kind of system "they" give us, how cleverly designed it is, or how controlling it appears to be, we are masters of our own desitiny. Micro economies can quickly give rise if only individuals can muster the courage to do more themselves and at minimum, barter/trade for things they can not. This is not THE solution, but it removes an element of control. What the IMF and it's minions may not bargain for is by diminishing the average American's ability to numb themselves, they may awaken a true "sleeping giant". I believe in the people, and I believe the changes we are embarking upon go far beyond the micro of economics. I gues the real question becomes; "Are you willing to be a shepherd or remain something else?"

    I hope my point is clear and melds into the topic of this wonderful and refreshingly open and informative blog. Well done JC

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