THE RMB WILL REPLACE THE USD

THE RMB WILL REPLACE THE USD

 

Ask yourself – Why does the rest of the world know what is going on and thier economy’s are booming with a constant steady increasing employment rate, while the so called ‘people in the developed western nations’ do not know about the new global economic system, and why are your nations having economic problems – that looks like a crisis is starting?

Every Hwy to and from the airport in all Asian country’s have these billboards everywere – I see them with my own eyes!!! I have told you all before about this – and I will tell you again! The first one I saw was on the Hwy from the Bangkok airport to Sukhomvit road in downtown Bangkok just before the exit!

 

The dollar’s role as the world’s primary reserve currency helps all of us Americans by keeping interest rates low. Foreign countries buy United States Treasury debt not just as an investment, but because dollar-denominated assets are the best way to hold foreign exchange reserves.

The Death Of The US-Dollar Lead To The Birth Of A New World Economic Order!

The IMF is expected to announce a reserve currency alternative to the U.S. dollar very soon – maybe this week, which will send hundreds of billions of dollars moving around the world, literally overnight.

As China moves up the economic pecking order, it has been trying to promote the yuan as an alternative to the U.S. dollar, which has been the dominant global reserve currency since the 1944 Bretton Woods conference.

Worldwide Riots in OECD Western Nations caused by Economic Collapse – Soon! 

Currently, China represents around 11 percent of global gross domestic product, more than 10 percent of world trade and nearly 9 percent of total foreign direct investment.

China may have prompted some interest in the subject: “. . . it is perhaps a good time for the befuddled world to start considering building a de-Americanized world,” wrote Liu Chang for China’s official news agency Xinhua.

China Plans to Double the Gold Price and Disrupt the Forex Derivatives!!!

Shanghai is going toward repricing gold and silver ratios versus the dollar! You are seeing an explosion of supply of the dollar, which should be good for gold, which is contrary to the way markets should work. The Chinese are fed up with what’s going on… They want to make equilibrium between supply and demand in the gold price!

How Will The Collapse Of The USD Affect Australia? 

Australia’s debt — government, corporate and household — is but one link in the global debt chain!

A global debt chain that is, according the McKinsey Report released in February 2015 titled ‘Debt and (not much) Deleveraging’, now topping over US$200 trillion!

So who owns the US$200 trillion global debt?

The simple answer is just about everyone, including taxpayers, investors, superannuation members etc…

The Australian Office of Financial Management publishes a Public Register of Government Borrowings. Currently it states that Domestic custodian and nominee companies own $756 billion of the $980 billion of government debt! This does not include ‘Interest’.

Domestic custodian and nominee companies are entities for superannuation funds, managed funds, private wealthy individuals/families and possibly shelf companies for overseas interests.

Australia has a debt it can not repay! Just like Greece, Italy, the UK, the USA, etc etc etc!!!

Let’s say that the Future Fund invested $1 billion in Puerto Rican debt and had to write this amount off. In this case the ultimate beneficiaries of this fund — public servant pensions — wear the loss.

What we have is a situation where individuals, corporates, investment funds and governments have lent US$200 trillion to households, corporates, governments and the financial sector.

The question is, are all those borrowers good for the money?

My guess is not all of them will be able to honour their debt obligations in a world where growth is slowing or going into the negative.

What people forget is: crises happen at the margin!!!

The subprime lending crisis was the match that led to the GFC bushfire.

According to estimates, the total amount in subprime loans was US$1.3 trillion.

A research paper from University of North Carolina titled ‘Subprime Mortgage Crisis’ stated:
“By October 2007, approximately 16% of subprime adjustable rate mortgages (ARM) were either 90-days delinquent or the lender had begun foreclosure proceedings, roughly triple the rate of 2005.By January 2008, the delinquency rate had risen to 21% and by May 2008 it was 25%”

One quarter of subprime loans — US$325 billion — were in arrears in May 2008. This rather piddly amount of defaults was enough to cause tens of trillions of dollars to be wiped off share and property values around the world.

This is what I mean by things happening at the margin. You don’t need every dollar of the US$200 trillion debt pile to default to create economic and market chaos. All we need to see is maybe 5% default, or US$10 trillion. That’s 30 times the dollar amount of subprime defaults.
So who will default? I don’t know. But what I do know is not all those borrowers are investment grade, and when things get tight, they’ll buckle. And when one buckles another will buckle…and so on…

For every dollar that is defaulted on, a superannuation fund, pension fund, or individual lender is on the other side writing off that debt.

If you lent someone a $1 million and they say ‘sorry, ain’t got it’, you might have to rethink what life looks like…cut back on your expenditure. This contraction in expenditure becomes deflationary, which in turn puts a greater squeeze on those with debts. Defaults increase. Expenditures decrease. And around we go…

Another example of crises happening at the margin is in the share market!

The average daily turnover on the Australian share market is around $4.5 billion. The total value of the Australian share market is roughly $1.5 trillion.

As a percentage, daily turnover equates to 0.3% of the market’s value. This means 0.3% set the price for the remaining 99.7%.

When the market is in panic mode, turnover may double or even treble — this still means 99% of shares ARE NOT sold and just 1% can cause the market to plunge 10, 20 or even 50%.

The same holds true for an economy. The 1920/21 recession — the worst in recorded history — saw the US economy contract by 18%. This still meant 82% of the economy was functioning.

Crises happen at the margin. We do not need to see all the US$200 trillion go up in smoke, only some of it…

Don’t over-think who owns what and try to connect all the dots. You’ll just get in a muddle.
Stand back, look at the big picture and be guided by what history has demonstrated time and time again about what happens when there is too much debt in the system.

You do not have to be an expert to appreciate that every single debt crisis in history has ended badly! Why would you bet your capital against a different outcome this time?

Especially when you consider this debt issue has crept into every single corner of the developed and developing world…

When the debt default dominoes start to fall, the impact is going to be felt all around the world…including Australia — and more specifically, our heavily indebted household sector will feel it hardcore!!!

Interest rates will rise!
Real Estate will loose value!
Cost of living will rise!
Unemployment will rise!
Wages/salarys will not increase! 
Western Currency’s will loose value! 

I am sure everyone can understand this simple reality check!