Seven Confirmations of Seven POM Trends in Seven Days (FREEPOM)

Economics, FREEPOM, Geopolitical22 Comments

And it’s Only October

By JC Collins

“Somehow it seemed as though the farm had grown richer without making the animals themselves richer – except, of course, for the pigs and dogs.”  - George Orwell, Animal Farm

Seven important stories emerged in the global media over the past week which further confirms the analysis presented here on POM.  Though timeframes and specific data points may vary and fluctuate, such as interest rate movements, the overall trend is moving along the multilateral path which has been defined and discussed here through thousands of pages of research and laborious writing.

It was presented here back on March 25, 2015, in the post When Will China End the Dollar Peg that China would in fact be moving towards ending the peg which it manages against the US dollar.  In that post I stated the following:

“One of the biggest questions which we need to consider as the world moves closer to the full implementation of the multilateral financial system is when will the RMB end its managed peg to the USD?  Now that the official request has been made to the International Monetary Fund, for the yuan to be included into the SDR basket composition, it is only a matter of time before the ending of the peg occurs.”

The post also explained how the yuan would in fact be added to the Special Drawing Right composition.  Since that time it has been confirmed by both China and the International Monetary Fund that the yuan will in fact be added to the SDR.  It is only a matter of the effective start date as opposed to whether or not is will actually be included.

Also in that post we discussed CIPS, or China International Payment System, which is meant to diversify from the American dominated SWIFT system, but also be integrated with SWIFT by using the same base programing.  From the March post:

“It is now stated that the CIPS system is ready to go, and is only going through final testing with 20 banking institutions, 13 of which are Chinese, and the remainder as foreign subsidiary banks.  The new operational start date is in October, but it could be fully operational at any time.”

It has now been officially stated that CIPS has been launched and is operational and functioning, in October, as presented her on POM back in March.  As a part of the CIPS mandate, POM also explained how China would adopt the IMF’s SDDS, Special Data Dissemination Standard.  Though not as headline making as CIPS itself, the SDDS protocol is equally important and has also now been officially confirmed.

All of those points are setting the stage for the ending of China’s managed peg, which has now been officially requested by the International Monetary Fund.  From Reuters:

“A floating exchange rate will enhance monetary policy autonomy and help the economy adjust to external shocks, as China continues to become more integrated into both the global economy and global financial markets.”

“China has described the yuan devaluation as modest and part of reforms to make the currency more market-driven, which coincided with the country's push to have the yuan included in the IMF's Special Drawing Rights (SDRs) basket.”

These points which we have just reviewed, and the subsequent confirmation of the analysis which has been presented on POM, makes this site the most accurate place for information on the international monetary system.  Though I’m not one to seek external confirmation, I will take this moment to allow for a small amount of peacocking.

But wait, there’s more.

The confirmation of the POM analysis continues as central bankers, and the emerging markets themselves, are now calling on the Federal Reserve to begin the process of normalizing interest rates.  A recent article in the Wall Street Journal carries the story:

“Fed fatigue has enveloped emerging-market officials facing repeated bouts of volatility in their currencies and capital flows alongside mounting worries about debt. Some policy makers, gripped by the uncertainty, delivered a message to their American counterparts as officials gathered in the Peruvian capital for the International Monetary Fund’s annual meeting: Please stop dithering.”

“Delaying the increase would not solve the situation,” said Sukhdave Singh, deputy governor of Bank Negara Malaysia. “If it is a case that the emerging markets have taken on too much debt, there will be a day of reckoning. Delaying an interest-rate hike does not necessarily address that issue.”

The main reasoning the Fed used last month to not increase interest rates was the volatility it would cause on the emerging markets.  In the post On the Eve of a New Bretton Woods, we reviewed how the IMF and World Bank meetings in Lima, Peru would be the beginnings of the next phase of the monetary transition to a multilateral framework.  The above quote from the Wall Street Journal and speeches given at those meetings regarding the monetary challenges, is bonus confirmation of everything we have been learning here for the last two years.

Which brings us to our next point which POM has been very vocal about, and that concerns the ominous financial reset which so many herald and discuss.  It has been my position that the normalization of monetary policy, the ending of QE and the beginning of interest rates increases, would be the spark that ignites the reset, or as I define it, adjustments to the monetary framework.

Others have predicted that interest rates could not increase until there is a reset.  Though it is true that interest rates have not begun increasing yet, the above statements coming from the meetings in Peru would strongly support my position on this matter.

Another POM trend which has been confirmed this past week involves the point system which China is implementing to rank citizens.  This was first described back on March 5, 2015, in the post The Redback Revolution:

“In its efforts to regain the superpower status which it had previously held three times in the last 2000 years – the Han Dynasty, the Tang Dynasty, and the Qing Dynasty – China has developed an urbanization plan which is meant to attract “elite human talent” to the “elite cities” which will be structured under strict population controls and citizenship will be based on a point system.”

“As the old world USD based system recedes into the shadows of yesterday, (like the British Empire before it) we can determine that the National New Urbanization Plan of China will become, under the emerging multilateral framework, the Global Urbanization Plan of the United Nations.  See post Development Goals of the New World Order and The Globalization of Central Banks.

The alternative media has been in a buzz over the past week based on an article presented on TechDirt.  The piece, titled China Looks to Quell Dissent with 'Citizen Scores,' A Number That Tracks Purchases, Opinions and Social Circles, explains in more detail this point system and the real world challenges to personal liberty and privacy which it will entail. When considered in combination with the POM articles linked above on globalization and development goals of the new world order, there is serious cause for concern about the trend of multilateral mandates, both macroeconomic and socioeconomic, and geopolitical.

Last but not least, POM has been alone in the prediction that there would be no major world war over this monetary transition.  It has been predicted by many that the war in Syria would spread into a larger conflagration which would engulf the entire Middle East and the rest of the world.  Though it is hard for many to imagine that America would willingly relinquish it hegemonic control over the majority of the world, the trend of exactly that happening is beginning to become extremely obvious.

In the post The Coming Western Tribunals, the following was presented:

“Many in the western world are still unable to accept this transition in monetary framework and reserve unit of account.  That is expected, as the British people also went through a similar process in the waning years of their once great empire.  Memories of the East India Trading Company and ocean supremacy eventually gave way to a subservient position to American hegemony.  The fact that the UK has just slipped away from that hegemony for the first time (by joining the AIIB) is very telling of the gravity and advancement of the multilateral transition.”

“The rest of the world is aware of the fundamentals at play in this transition, and America will slowly accept its acquiescence to the multilateral in the coming years.  The study of the cultural impact of this type of change on once hegemonic populations is worth further reflection.  The recent reduction in western corporation performance, such as with McDonald’s and other big chain stores, offer a potential starting place for this study.  Comparisons and benchmark cases between both Great Britain and America during these periods will offer immense information for future reference when the international community is faced with similar challenges in the decades to come.”

There is much more written in that quote which the reader can utilize for further research, but the trend of the POM analysis is clearly defined, and supported by the recent actions of the US over its proxy war in Syria.  Russia has, in the span of a week, effectively removed the US hegemony from the Middle East.

We can expect that some level of American interest will be protected in the region, but it will not be at the level which has been previously experienced.  In fact, we are beginning to hear about discussions taking place between the Americans and Russians, as well as the Russians and Saudi Arabia.  The balance has shifted, as predicted, and the likelihood of an all-out war over Syria, or even Ukraine, is receding with each passing day.

The geopolitical posturing by the US over all these regional conflicts, and points of tension, like the South China Sea, will be dealt with as points of negotiation over the multilateral transition.  The US will only relinquish control when absolutely necessary.  Like now in Syria.  No one wants war over this transition, and I will continue with my original position on this matter.

The POM site, and myself in general, have been lambasted for the analysis presented here.  I have always contested that the fine points and mandates of the multilateral transition is where the answers can be found.  The confirmation of this position continues with real world events and methodologies unfolding as expected.   – JC

“It is a stifling, stultifying world in which we live.  It is a world in which every word and every thought is censored.  In England it is hard even to imagine such an atmosphere.  Everyone is free in England; we sell our souls in public and buy them back in private, among our friends.  But even friendship can hardly exist when every white man is a cog in the wheels of despotism.  Free speech is unthinkable.  All other kinds of freedom are permitted.  You are free to be a drunkard, an idler, a coward, a backbiter, a fornicator; but you are not free to think for yourself.  Your opinion on every subject of any conceivable importance is dictated for you by the pukka sahibs’ code.”  - George Orwell, Burmese Days

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22 Comments on “Seven Confirmations of Seven POM Trends in Seven Days (FREEPOM)”

  1. Cool. But still in any conflict accidents can happen so perhaps it might be too soon to tell. But yes I agree with the rest. Good job. English not my first or even 2nd language.

  2. Hi JC, another great article! thank you very much.

    The PoM site over the last couple of years has given my rather small entourage a huge insight into why trade surplus countries could see a notable exchange rate appreciation and why trade deficit countries could incur a substantial exchange rate depreciation. Researching this analysis easily presents the PoM thesis as being fundamentally "spot on!".The pending multilateral transition towards a coordinated global rebalancing of debt and trade is an enormous task and the pace of such an event - without war - is a constantly revisited known-uncertainty from my camp 🙂

    However, we've come to realize that we've never considered who the beneficiaries of an exchange rate appreciation would/could be. We've always focused on why an appreciation of a countries exchange rate would occur in the first place..

    That said, we've started looking into this particular line of thought and discovered that there a few major industries that stand to see some positive benefits from exchange rate appreciations.

    RMB Appreciation from Chinas Perspective
    Posted on September 12, 2011

    How does RMB appreciation affect five of the largest industries in China?

    Aviation: Positive impact
    As a large holder of foreign currency-denominated assets/liabilities, it can be said that the aviation industry may be the biggest beneficiary of RMB appreciation...

    So, being 2015 and with the advent of the ASEAN - SAM (Single Aviation Market) coming into effect by Jan 1st 2016 - could the same outcome be surmised (in that the ASEAN Aviation industry will be a direct beneficiary of the RMB SDR inclusion and regional currency exchange rate appreciation)?

    Cheers mate 🙂

      1. hmm. Seem to have found the answer!

        [from above link]
        <a href="https://www.dbs.com.sg/treasures/aics/pdfController.page?pdfpath=/content/article/pdf/AIO/150811_insights_stars_aligned_for_asean_airlines.pdf&quot; target="_blank"Investment Summary
        page 3
        Stronger US$ could be a challenge. The US$ has been strengthening against regional currencies since August 2014 and is projected to continue doing so. Non-US carriers generally generate a deficit in US$ due to the high percentage of costs that are incurred or denominated in US$. All else being equal, for every 1% appreciation of the US$, we estimate that operating earnings of the airlines above would be impacted by 2.6-15.3%.

  3. Lol. Love the title for your post. Here are a couple more pieces to the puzzle that's been touched on. Slowing Chinese exports and contraction of the USD. POM is the best.

    "China’s exports fell 3.7 per cent in the year to September, a smaller drop than forecast. But the standout feature was a 20.4 per cent decline in imports in US dollar terms for the same period — the 11th consecutive month of contraction."

    http://www.ft.com/cms/s/0/7fb7bcc6-7151-11e5-ad6d-f4ed76f0900a.html#axzz3oRhFr8AY

    "China’s Exports Down 6.1% In August, Imports Fall 14.3%, But Trade Surplus Sharply Up"

    http://www.ibtimes.com/chinas-exports-down-61-august-imports-fall-143-trade-surplus-sharply-2086112

  4. “Though it is hard for many to imagine that America would willingly relinquish it hegemonic control over the majority of the world, the trend of exactly that happening is beginning to become extremely obvious.”

    It is not obvious. You are not taking into account that Mr. Obama does not represent the military industrial complex. Quite to the contrary. Obama has done everything he can to throw a wrench into the military machinery and yet we are still where we are, contemplating another world war. You use the term “America” as if it’s a monolithic entity. It’s not monolithic.

    The players are not all controlled from the Round Table at the BIS as your writing seems to imply. If the international bankers were as powerful as you say they would have got their bancor at Bretton Woods. The same group that vetoed the bancor has only become more powerful since then and will not simply fold up their tents like the Soviet military in 1989.

  5. So, this video could placed as comment/info in many of JC's posts...but since he's writing about rates:

    https://www.youtube.com/watch?v=Fbkr7TGUJsI

    I found it interesting that Denniger sees that in 2008, as homeowners were getting hosed, policies/programs were enacted to "rescue" the homeowner and hide the fraud. Meanwhile, since companies and government entities that escaped 2008 and are still over-levered will not escape this round of devaluation, policies will be created to save the corporations and governments directly. The funding gaps created by 0% (or negative) rates will force the Fed to raise rates.

    Also...anybody want to shed some light on how the Fed follows the market's lead in terms of rates, as Denniger notes?

  6. JC I have to ask does art or in this case politics take direction from life? Or does life take direction from politics meaning art?

    The universe was created for life to be the supreme decision maker thru thought. So I cannot grasp your talent to predict future likely political actions unless it is life or mass consciousness thought dictating to political leaders to take certain actions to try and mitigate a disaster. And that at the leadership level there is conflict between those who belive the populace to be no more them sheep and those who believe life is a gift.

    1. "The universe was created for life to be the supreme decision maker thru thought." I appreciate your position on that matter. I would like to add that my own personal belief is that matter and spirit are attempting to evolve together for the benefit of both. As such, I see the world somewhat different then many others. I hate to sound too New Age and what not, but it does feel like humanity is beginning to stretch its self awareness. Perhaps the information age, and in turn the opportunity to process massive amounts of information, has given each of us, and all of as a whole, the ability to experience, and know, the symbiosis which permeates not just matter and spirit, but also thought, as you mentioned. There is something new moving through the caverns of human thought. A new thing with an old face. The real war is intangible and meant to keep matter and spirit from evolving together. Let that be the thought which allows us to envision something different for tomorrow. That is the political art which I use to draw forth my experience on life.

      1. Well, Thought, and interesting point. A book published in 1955 has certainly changed my Thoughts. Not saying it will change yours but that's possible, it's The Urantia Book. Perhaps you've already found it...

        http://www.urantia.org/

        just a thought

      2. Mr. Collins:

        Your micro view is quite correct. The world is on the edge or precipice of great shifts and transformations in human consciousness. IMHO, the spread and use of the internet has greatly facilitated such positive changes; which would partially explain why there are internet use restrictions buried within the present and secret Pacific and Atlanta trade agreements. On the macro scale or view, there are great forces of darkness, evil, and selfishness that are actively resisting such positive evolutionary changes. Evil realizes that awareness and understanding within their intended host, slaves, or victims, especially of the division between matter and spirit, would mean a loss of control and power. Aware and entitled souls rarely remain slaves because sucking of their spiritual energy by others would cease.

        Ozymandias

      3. The truth is what is new moving thru the caverns of human thought. The truth has been kept from the public masses for so long it sounds like absurdity, but as they say the truth is stranger than fiction. As for the interest rates it seems raising them creates many problems with the BOND markets. Is it not true that the majority of the big banks are now holding their bonds under HTM or Hold to maturity when not 4 years ago 100% of these same bonds were being classified AFS or Available for Sale? When holding the bonds HTM the banks are allowed to carry them on their books at the price they paid avoiding showing the lower value of these assets and having their bottom lines look healthier as a result.

  7. Are you aware of the Particle Wave Experiment that proves the observer influences atoms by observing them. Therefore I do not understand what you mean by the evolution of matter?

    1. It is my interpretation that the experiment you reference supports what I stated. And I didn't say the evolution of matter. I said matter and spirit are attempting to evolve together. There is a difference. Thought plays a role in this process, which goes back to the experiment you mentioned. But I'm sure you have your own ideas on this, and I support that.

      1. Hello JC when you see that "matter and spirit are attempting to evolve together for the benefit of both" is that in the sense that they are both evolving together each on their own path but trying to evolve at the......same evolutionary speed.....perhaps?

        If so spirit could have its own evolutionary dreams or process and matter its own. But if matter drags too far behind it seems it could hinder spirits evolution. If this becomes the case I could anticipate spirit and matter being in conflict.

        I can also envision it as dna strands in their spiraling parallel structure. Maybe the connectors are steps in evolution....wonder if there is a set or group of 33 evolutionary steps?

  8. JC. Are we not spirit and matter ?

    Humans are as I understand it spiritual beings having an experience called life on a planet with in a vibrational frequency where thoughts are materialized into matter.

    1. Of course we are both spirit and matter. That is the point. I think we're really missing each other on this topic. Let's leave it for another post were I get into an esoteric topic.

  9. I was very happy to see Russia take the lead in Syria..the theory is and what I have read on most geopolitical sites is that Russia is taking care of its own interests in the regions to keep terrorist groups such as ISIS from spreading into Russia and also to aid Assad as the US' original goal was to take out Assad. It is kind of strange to say the least that the US would just drop back and do nothing.I am following this as candidates for president are offering some different solutions and it seems the people of the nation are finally happy with the fact that Putin is taking the lead in the Syria conflict and are not really leaning toward any candidate that wants to be involved in the Middle East..What a change, but maybe all along we were all just tired of fighting wars that never end.

    I had said earlier in a post that I did not believe that congress would vote on TPP until after the election..Well guess what..that is exactly the feeling going forward now..Here is an article on this.

    http://theconservativetreehouse.com/2015/10/15/josh-earnest-talks-tpp-deal-potus-signature-and-vote-may-wait-until-after-2016-election/

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