Milky Way. ESO / Serge Brunier, Frederic Tapissier via NASA
April 25, 2016 - SPACE - Researchers scanning the skies just got a big
surprise. They spotted a humongous galaxy orbiting our own, where none
had been seen before. It appeared, seemingly, out of nowhere.
So, just how did the newly-discovered Crater 2 manage to pull off this feat, like a deer leaping from the interstellar bushes to stare us down through our collective headlights?
Although the appearance may seem sudden, the fact is that Crater 2 has been there all along. We just missed it.
Now that we know it’s there, though, there are a few other humiliating details that astronomers discovered.
First of all, we can’t blame the galaxy’s size for its relative obscurity. Crater 2 is so enormous that researchers have already pegged it as the fourth largest galaxy orbiting our own.
We can’t blame its distance, either. Crater 2's orbit around the Milky Way puts it right in our neighborhood.
That said, how did we still not know it was there? A new paper out in Monthly Notices of the Royal Astronomical Society from researchers at the University of Cambridge has an answer for us. It turns out that, despite being large and close, Crater 2 is also a pretty dark galaxy.
In fact, it’s one of the dimmest galaxies ever spotted in the universe. That, along with some much brighter neighbors, let the galaxy that researchers have nicknamed “the feeble giant” escape detection until now.
Now that we have seen Crater 2, however, the discovery raises questions about what else is out there.
Researchers are already talking about mounting a search for similarly large, dark galaxies around us. It’s a good reminder that there’s still so much about space that we don’t know.
- Gizmodo.
December 13, 2015 - SAUDI ARABIA - Seventeen women have won seats in municipal councils in Saudi Arabia as the ultraconservative Muslim kingdom allowed females to vote and run as candidates for the first time in history in an election on Saturday.
It was also only the third ever election in Saudi Arabia. Just men participated in the 2005 and 2011 polls.
Sabq.org, a news website affiliated with Saudi Interior Ministry, was first to report that the 17 had successfully been elected across the kingdom.
More than 900 women ran against 6,000 men for spots on the country’s 284 municipal councils.
The development is viewed as historic for Saudi Arabia where women have fewer rights than men, being forbidden to drive cars and making major life decisions without consent from male relatives, among other restrictions.
“I deeply believe in the importance of voting in order to be part of my country’s drive to empower women and elevate their status. The turnout was good and the voting proceeded smoothly. I personally voted based on the candidates’ programs and plans,” one of the female first-time votes told Gulf News.
However, the election was only for two thirds of municipal council seats which have no legislative or national powers but are rather limited to local affairs.
The turnout was also quite low, with just 25 per cent of the voters casting ballots due to election still being a new thing for the Saudis.
Salma bint Hazab al-Otaibi, who won a seat in the Madrika district of Mecca, was hailed as first woman councilor in Saudi Arabia on social media.
Huda al-Jeraisy, a daughter of a former head of the chamber of commerce, was elected in the country’s capital, Riyadh.
Two women were elected in Saudi Arabia’s most conservative region, Qassim, but their names were not released as well as the name of another female councillor from al-Babtain.
The late King Abdullah announced that the women would vote in 2015 as he had been looking to increase the public role of females in the country. - RT.
Myanmar's National League for Democracy party leader Aung San Suu Kyi leaves her party headquarters after talking
to supporters about the general elections in Yangon, Myanmar November 9, 2015. (Reuters Photo)
November 9, 2015 - MYANMAR - The landslide victory for Aung San Suu Kyi’s National League for Democracy (NLD) in Myanmar’s historic multi-party election is a great triumph in the annals of contemporary political struggles. It marks a stunning comeback for a woman ---- revered as ‘The Lady’ ---- who was robbed of a similar win in 1990 by the military. Subsequently, she survived 15 years of imprisonment and decades of crackdowns on her party by the country’s military rulers.
Although this election has been one of the freest in Myanmar since the ill-fated one in 1990, the NLD entered the fray with a vast disadvantage vis-à-vis the ruling military-backed Union Solidarity and Development Party (USPD). The armed forces, the civilian bureaucracy and the Buddhist fundamentalist clergy abused their powers to try and ensure that the NLD’s win would not be a thumping one.
The apparatus of Myanmar’s ‘deep State’ — which detests Suu Kyi’s star status and mass appeal — engaged in patronage politics and fraudulent vote-buying, press-gagged government employees, and ran a blatantly racist and religiously charged campaign in an orthodox Buddhist nation to paint Suu Kyi as a “candidate of Muslim minorities”.
These dirty tricks came to a naught because ordinary Myanmarese people associate the USPD with the dark past of military despotism and decisively rejected the corruption and monopolisation of the economy by the army under civilian guise.
Even though Suu Kyi is now 70, she still enjoys the halo of being the daughter of the great freedom fighter Aung San who was assassinated just after Burma, now Myanmar, got independence from Britain.
The Lady has proved to be more than a handful for the generals in civvies, most of whom could not even win their individual parliamentary seats in the NLD’s electoral wave.
An NLD supporter celebrates: Aung Sang Suu Kyi’s party is on course to win the Myanmar election. Photograph: ZUMA Wire/REX Shutterstock
Suu Kyi’s win is comparable to Nelson Mandela’s ‘Long Walk to Freedom’. Yet, even though the NLD is on course to sweep more than two-thirds of the parliamentary seats, Suu Kyi will not become president of Myanmar the way Mandela did after apartheid was overthrown in South Africa.
This is because the military-written Constitution has already disqualified her from assuming the top office of the country on flimsy grounds. Moreover, there is a military-appointed block of 25% of parliamentarians who will never permit the NLD, no matter how many MPs it commands, to amend the Constitution.
The political liberalisation initiated by the former junta in Myanmar from 2010 onwards to overcome international sanctions and isolation was carefully orchestrated by reserving an ‘eminent domain’ for the military, not just in parliament but also in key ministerial portfolios, state institutions and realms of policymaking.
Military higher-ups would not be losing sleep over the USPD’s crashing defeat in the elections since they had taken out enough preemptive insurance to keep dominating the country. The fact that the generals are respecting the NLD’s win and not repeating the usurpation of the people’s mandate like in 1990 means that they are now prepared for indirect rule.
Thus, Suu Kyi faces two challenges: Having to appoint a ‘proxy President’ who must be loyal enough to take orders from her, and to fulfill the expectations of Myanmarese people for civil liberties, peace with minorities, federalism and economic development without enjoying full civilian control over the State structure.
The Lady has admitted that the latest elections were “less than free and fair”, but she had to compromise to work within the confines set by the military to even get this far in Myanmar’s political evolution.
The catchy anthem of the NLD has a stirring line- “Go, go, go away dictatorship”. But what Suu Kyi has secured is a hybrid regime that is definitely more democratic than that of the USPD but less-than-perfect democracy she and her people yearn for.
As a compassionate Buddhist who stuck to non-violence against tremendous odds and who believes in the ethos of embracing enemies, the Lady will now attempt to convert the incorrigible army establishment to work together with her in the interests of Myanmar’s long-suppressed citizens. She certainly has a whopping mandate of people power as a tailwind to try and reform the army for which she has expressed “fondness” for, while never accepting its absolutist excesses.
Myanmar may not be lucky to eventually see its most beloved heroine, now already a septuagenarian, occupying the presidency. But short of that, she has taken her nation closer to democracy and already earned her place in the pantheon. - Hindustan Times.
April 21, 2015 - SPACE - Astronomers have discovered a curious empty section of space which is missing around 10,000 galaxies.
The ‘supervoid’, which is 1.8 billion light-years across, is the
largest known structure ever discovered in the universe but scientists
are baffled about what it is and why it is so barren.
It sits in a region of space which is much colder than other parts of
the universe and although it is not a vacuum, it seems to have around 20
per cent less matter than other regions.
The Cold Spot area resides in the
constellation Eridanus in the southern galactic hemisphere. The insets
show the environment of this anomalous patch of the sky Photo: ESA Planck Collaboration
Although the Big Bang theory allows for areas that are cooler and
hotter, the size of the void does not fit with predicted models. Simply
put, it is too big to exist.
Getting through such a big hole takes hundreds of millions
of years, even at the speed of light, and photons of light slow down as
they cross because the universe – and therefore the void - is
continually expanding.
However the scientists claim that the void can only account for around 10 per cent the temperature drop in the cold spot.
“It just pushed the explanation one layer deeper,” said Dr Roberto Trotta, a cosmologist at Imperial College London.
A strange empty hole has been found in the universe
The supervoid is only about 3 billion light-years away from Earth, a relatively short distance in the cosmic scheme of things.
“Supervoids are not entirely empty, they’re under-dense,” said András
Kovács, a co-author at the Eötvös Loránd University in Budapest.
“This is the greatest supervoid ever discovered. Given the combination
of size and emptiness, our supervoid is still a very rare event. We can
only expect a few supervoids this big in the observable universe.”
January 13, 2015 - RUSSIA/CHINA
- The new Universal Credit Rating Group (UCRG) is being set up to rival
the existing agencies Moody's, S&P and Fitch, and its first rating
will be issued this year.
The setting up of UCRG is in its final
stages, ready to challenge the ‘Big Three’ that currently dominate the
industry, the Managing Director of RusRating Aleksandr Ovchinnikov told
Sputnik News Agency on Tuesday. "In our opinion, the first ratings [will] appear … during the current year," Ovchinnikov said, adding that accreditation with the local regulator is already underway.
The
news comes on the heels of Fitch’s decision to follow S&P in
downgrading Russia’s sovereign credit rating to BBB-, a step above junk
level and on par with India and Turkey.
The new agency will be
based in Hong Kong, and provide a check on the ‘Big Three’, which some
analysts say don’t provide an accurate reading of economic situations.
Many
securities and bonds in the US that had triple-A ratings in 2008 and
were considered ‘safe’, turned out to be a bubble, revealed by the
subprime mortgage crisis. "When the issue of creating an
agency alternative to the ‘Big Three’ [Standard & Poor's, Moody's,
and Fitch Group] was raised, we in fact offered [a] project that was
ready to be launched and was supported by the governments of Russia and
China," Ovchinnikov said.
Developed economies are often given
a free credit rating pass, whereas developing economies are assigned
more risky ratings, the RusRating analyst said.
UCRG was
officially created in June 2013 by China’s Dagon, Russia’s RusRating and
America's Egan-Jones Ratings. Each member will hold an equal share in
the venture, with an initial investment of $9 million. - RT.
A bank clerk counts Chinese yuan banknotes at a branch of Industrial and
Commercial Bank of China in Huaibei (Reuters/Stringer) and Russian
ruble banknotes (Reuters/Ilya Naymushin)
December 29, 2014 - GLOBAL ECONOMY
- China and Russia have effectively switched to domestic currencies in
trading using financial tools as swaps and forwards, as they seek to
reduce the influence of the US dollar and foreign exchange risks.
The
agreement signed in the end of October comes into force Monday,
December 29, and provides a currency swap of CNY150 billion (up to US$25
billion).
The country’s Foreign Exchange Trade System will carry
out similar transactions with the Malaysian ringgit and the New Zealand
dollar.
From now on yuan swaps are available for 11 currencies on the foreign exchange market. “China won’t stop yuan globalization or capital account opening because of the volatility in emerging market currencies,” Ju Wang, a senior currency strategist at HSBC Holdings Plc in Hong Kong told Bloomberg.
China
has set up bilateral currency swap lines with more than 20 countries
and regions since 2009, including Switzerland, Brazil, Hong Kong,
Indonesia and South Korea, Xinhua News reported in July.
A swap is
a financial tool to ease transactions by exchanging certain elements of
a loan in one currency, like the principal or interest payments into an
equivalent loan in another currency.
Currency forward is an
obligation of two parties to convert an agreed amount of one currency
into another by a certain date at an exchange rate specified at the
moment of signing the deal.
Russia and China have long been
looking for ways to cut the dollar’s role in international trade. The
question is significant for China as 32 percent, or $4 trillion of its
foreign exchange reserves are in US bonds, which means there is a
vulnerability to fluctuations in the exchange rate.
Russia’s foreign exchange reserves are worth $398 billion, and the US dollar accounts for about $162.45 billion.
The
country’s economic growth has slowed amid a standoff with Western
countries over the Ukrainian conflict. After the country’s financial
sector faced EU and US sanctions it became hard for Russian businesses
to raise finance in the West.
Chinese authorities are particularly
interested in currency swap lines with developing countries, mainly
from the Asia-Pacific region. Australia, New Zealand, Brazil, Singapore,
Hong Kong, Argentina, and Malaysia are actively involved in
transactions with China. - RT.
December 27, 2014 - GLOBAL ECONOMY - China is launching trading in
forwards and swaps between the yuan and three more currencies, including
the Russian ruble, from December 29, the China Foreign Exchange Trade
System managed by the People’s Bank of China announced on Friday.
China is also launching trading in contracts with the Malaysian ringgit and the New Zealand dollar from 29th
December. China is promoting usage of the yuan in global commercial and
financial transactions, with the ultimate goal of rivaling the dollar
as a reserve currency.
Friday’s announcement will extend the yuan’s swaps trading to 11 currencies on the interbank foreign-exchange market.
Analysts say China will not halt its accelerated plans to internationalize its currency.
“This will provide companies with better hedging tools, and at the same time, make currency trading more efficient,” a Bloomberg report quoted HSBC’s strategist in Hong Kong, Ju Wang as saying.
“China won’t stop yuan globalization” despite volatility in emerging market currencies, the strategist said.
China
is promoting the use of its currency as an alternative to the dollar in
global trade and finance and more and more nations now want to capture
the fast-growing market for offshore trade in yuan, also known as the
renminbi.
The Chinese currency is already traded directly against
the US dollar, the euro, the Japanese yen, the British pound, the Aussie
and New Zealand dollars, Russia’s rouble, the Singapore dollar and
Malaysia’s ringgit. Yuan settlement in trade surged from 2.06 trillion
yuan in 2012 to 3.01 trillion yuan in 2013 worldwide.
Meanwhile,
Russian President Vladimir Putin asked business leaders last week to
report on plans to sell foreign currency revenues and to engage in
responsible foreign exchange operations, Vedomosti newspaper reported earlier this week. - The BRICS Post.
China is promoting the use of its currency as an alternative to the dollar in global trade and finance [Xinhua]
In fact, it was only this week that Bloomberg reported that "China Offers Russia Help With Currency Swap Suggestion."
But in order to fully backstop Russia away from a SWIFT-world in which
the dollar reigns supreme, one extra step was necessary: the launching
of direct FX trade involving the Russian and Chinese currencies, either
spot or forward - a move away from purely theoretical bilateral FX trade
agreements - which would not only enable and make direct currency
trading more efficient by sidestepping the dollar entirely, but also
allow Russian companies to budget in Chinese Yuan terms. It is no
surprise then that this is precisely the missing step that was announced
overnight, and will be implemented starting Monday.
From Bloomberg:
China
will allow trading in forwards and swaps between the yuan and three
more currencies in a bid to reduce foreign-exchange risks amid increased
volatility in emerging markets.
The
China Foreign Exchange Trade System will begin such contracts with
Malaysia’s ringgit, Russia’s ruble, and the New Zealand dollar from Dec.
29, it said in a statement on its website today. That will extend the
yuan’s swaps trading to 11 currencies on the interbank foreign-exchange
market. A
plunge in Russia’s ruble this month to a record low sparked a selloff
in developing nations’ assets, leading to a surge in currency
volatility. The new contracts come amid efforts by China to increase the
international use of the yuan, as the world’s second-largest economy
promotes it as an alternative to the U.S. dollar for global trade and
finance. Malaysia and Russia are China’s eighth and ninth biggest
trading partners, according to data compiled by Bloomberg. “This will provide companies with better hedging tools, and at the same time, make currency trading more efficient,”
said Ju Wang, a senior currency strategist at HSBC Holdings Plc in Hong
Kong. “China won’t stop yuan globalization or capital-account opening
because of the volatility in emerging market currencies.” The CFETS is an agency under the People’s Bank of China.
So
while the US continues to parade with "destroying" the Russian economy,
even if it means crushing the shale industry, aka the only bright spot,
and high-paying job-creating industry in the US economy over the past 5
years, Russia and China continue to be nudged by the west ever closer
monetarily and strategically, until one day, as we have long predicted,
China and Russia will announce a joint currency, one backed by both
China's "surprising" gold reserves and Russia's commodity hoard. Then
things will get interesting. - Zero Hedge.
December 15, 2014 - PARADIGM SHIFT - Months after the formation of new financial institutions like the $100 billion BRICS Bank and the China-led Asia Infrastructure Investment Bank,
Christine Lagarde, managing director of the International Monetary Fund
(IMF), said Friday that the organization is ready to discuss IMF voting
reforms without the United States to give BRICS and emerging countries
greater voting power.
Lagarde said the IMF is disappointed with
the US inaction to ratify the governance and quota reforms and will now
move forward without Washington.
“The IMF’s membership has been
calling on and was expecting the United States to approve the IMF’s 2010
Quota and Governance Reforms by year-end. Adoption of the reforms
remains critical to strengthen the Fund’s credibility, legitimacy, and
effectiveness, and to ensure it has sufficient permanent resources to
meet its members’needs,” Lagarde said in a statement.
“I have now
been informed by the U.S. Administration that the reforms are not
included in the budget legislation currently before the U.S. Congress. I
have expressed my disappointment to the U.S authorities and hope that
they continue to work toward speedy ratification,” she said.
“As
requested by our membership, we will now proceed to discuss alternative
options for advancing quota and governance reforms and ensuring that the
Fund has adequate resources, starting with an Executive Board meeting
in January 2015,” she added.
Earlier in September this year, in her opening address at the United Nations General Assembly,
Brazilian President Dilma Rousseff warned that international financial
institutions are in danger of losing legitimacy if developing countries
like BRICS are not given proper representation.
“It is also
imperative to eliminate the disparity between the growing importance of
developing countries in the global economy and their insufficient
representation and participation in the decision-making processes of
international financial institutions, such as the Monetary Fund and the
World Bank. The delay in the expansion of voting rights of developing
countries in these institutions is unacceptable,” Rousseff said.
“These institutions are in danger of losing legitimacy and efficiency,” she added.
The
IMF reforms will hand more IMF voting powers to BRICS, a long-standing
demand of the group and will also reduce the concentration of
representative power of Western Europe at the IMF board.
China and
other emerging economies, including BRICS, have long protested against
their limited voice at global financial platforms, including the World
Bank, International Monetary Fund and Asian Development Bank.
The
IMF quota reform calls for a 6 per cent shift in quota share to emerging
economies. It will lift China, which still has less voting power than
the Benelux countries ( Belgium, Holland and Luxemburg), to the third
largest shareholder. Shares for Russia, India and Brazil will also see
hefty rise.
The reforms, however, have been delayed for four years
owing to a block by the US Congress as the US retains a veto. IMF chief
Lagarde hinted at a “Plan B” in April if the US fails to endorse the
reforms by year-end. - The BRICS Post.
December 4, 2014 - CHINA - Hang on to your hats, America.
And throw away that big, fat styrofoam finger while you’re about it.
There’s
no easy way to say this, so I’ll just say it: We’re no longer No. 1.
Today, we’re No. 2. Yes, it’s official. The Chinese economy just
overtook the United States economy to become the largest in the world.
For the first time since Ulysses S. Grant was president, America is not
the leading economic power on the planet.
It just happened — and almost nobody noticed.
The International Monetary Fund recently released the latest numbers for
the world economy. And when you measure national economic output in
“real” terms of goods and services, China will this year produce $17.6
trillion — compared with $17.4 trillion for the U.S.A.
As recently as 2000, we produced nearly three times as much as the Chinese.
To
put the numbers slightly differently, China now accounts for 16.5% of
the global economy when measured in real purchasing-power terms,
compared with 16.3% for the U.S.
This latest economic earthquake
follows the development last year when China surpassed the U.S. for the
first time in terms of global trade.
I reported on this looming
development over two years ago, but the moment came sooner than I or
anyone else had predicted. China’s recent decision to bring gross
domestic product calculations in line with international standards has
revealed activity that had previously gone uncounted.
These
calculations are based on a well-established and widely used economic
measure known as purchasing-power parity (or PPP), which measures the
actual output as opposed to fluctuations in exchange rates. So a
Starbucks venti Frappucino served in Beijing counts the same as a venti
Frappucino served in Minneapolis, regardless of what happens to be going
on among foreign-exchange traders.
Make no mistake. This is a geopolitical earthquake with a high reading on the Richter scale.
PPP
is the real way of comparing economies. It is one reported by the IMF
and was, for example, the one used by McKinsey & Co. consultants
back in the 1990s when they undertook a study of economic productivity
on behalf of the British government.
Yes, when you look at mere
international exchange rates, the U.S. economy remains bigger than that
of China, allegedly by almost 70%. But such measures, although they are
widely followed, are largely meaningless. Does the U.S. economy really
shrink if the dollar falls 10% on international currency markets?
Does
the recent plunge in the yen mean the Japanese economy is vanishing
before our eyes?
Back in 2012, when I first reported on these
figures, the IMF tried to challenge the importance of PPP. I was not
surprised. It is not in anyone’s interest at the IMF that people in the
Western world start focusing too much on the sheer extent of China’s
power. But the PPP data come from the IMF, not from me. And it is
noteworthy that when the IMF’s official World Economic Outlook compares
countries by their share of world output, it does so using PPP.
Yes,
all statistics are open to various quibbles. It is perfectly possible
China’s latest numbers overstate output — or understate them. That may
also be true of U.S. GDP figures. But the IMF data are the best we have.
Make
no mistake: This is a geopolitical earthquake with a high reading on
the Richter scale. Throughout history, political and military power have
always depended on economic power. Britain was the workshop of the
world before she ruled the waves. And it was Britain’s relative economic
decline that preceded the collapse of her power. And it was a similar
story with previous hegemonic powers such as France and Spain.
This
will not change anything tomorrow or next week, but it will change
almost everything in the longer term.
We have lived in a world dominated
by the U.S. since at least 1945 and, in many ways, since the late 19th
century. And we have lived for 200 years — since the Battle of Waterloo
in 1815 — in a world dominated by two reasonably democratic,
constitutional countries in Great Britain and the U.S.A. For all their
flaws, the two countries have been in the vanguard worldwide in terms of
civil liberties, democratic processes and constitutional rights. - Market Watch.
November 30, 2014 - CHINA
- The capitalization of the Chinese stock market increased 33 percent
in 2014 reaching $4.48 trillion, which makes the market second only to
the US.
Japan’s stock market declined 3.2 percent to $4.46 trillion in 2013, according to Bloomberg analysts.
The
Chinese market surge came hot on the heels of allowing foreign
investors unprecedented access to mainland shares through the merger of
the Shanghai and Hong Kong stock exchanges.
The decision to
spur the Chinese economy has made the country an attractive investment.
On November 21 the People's Bank of China reduced its key interest rate
for the first time in two years.
Economists predict Chinese authorities
will put in place additional measures to support the economy, which
slowed to a five-year low in the third quarter this year.
The
weakening of the yen against the dollar has played an important part in
the falling capitalization of the Japanese market.
After Shinzo Abe’s
tight monetary policy proved to be ineffective, the yen has seen a 10
percent decline in 10 months.
China had once been the world’s
second largest stock market. In March 2011, it briefly surpassed Japan,
which was hit by a devastating earthquake.
The disaster was accompanied
by a sharp fall in stock market indices. - RT.
November 21, 2014 - RUSSIA/CHINA
- Settlements in yuan between China and Russia have increased ninefold
in annual terms between January and September 2014, says the Chinese
Ministry of Economic Development. "The settlement in national
currencies between China and Russia in bilateral trade amounted to about
2 percent in 2013. There has been a significant growth in 2014.
In
particular, the use of the yuan in mutual settlements increased nine
times in the first nine months of 2014."
TASS quotes Lin Zhi, head of the Europe and Central Asia Department of the Chinese Ministry of Economic Development. "About
100 Russian commercial banks are now opening corresponding accounts for
settlements in yuan. The list of commercial banks where ordinary
depositors can open an account in yuan is also growing." the official said.
On November 18 Russia’s Sberbank became the first Russian bank to begin financing letters of credit in Chinese yuan.
Half
of the trade between Russia and China could be carried out in yuan and
rubles provided China removes restrictions on currency transactions for
Russian banks, said Deputy Finance Minister Aleksey Moiseyev in
September.
The restrictions don’t allow Russian banks to keep yuan
received from exporters for a long time.
Russia and China have
been boosting cooperation primarily in the financial and energy sectors
and are planning to have a trade turnover of $200 billion by 2020.
Switching
to settlements in domestic currencies can largely contribute to
balancing the global economy by reducing the impact of the dollar on the
world financial and energy markets, President Vladimir Putin said at
the APEC Summit last week. - RT.
November 18, 2014 - RUSSIA
- Sberbank, Russia’s largest lender, will be the first bank in the
country to start issuing credit guarantees denominated in Chinese yuan.
The new yuan-based letters of credit ensure payments between buyers and
sellers, with the bank acting as a router.
This will make payments for import contracts settled in yuan more seamless, the bank said in a statement Tuesday. “An
important aspect of these transactions is that post-import financing
was attracted in Chinese yuan, which is especially relevant given the
existing market environment,” the statement says. “Starting
transitions in RMB will allow customers to not only meet current funding
requirements and settlements, but also to continue active cooperation
with Chinese suppliers.”
Letters of credit are considered
secure and convenient in international trade, as they are designed to
protect both buyers and suppliers, and offer a good alternative to
advance payment. This can overall help expedite the entire payment and
shipping processes. “This is a complex transition in which the
letters of credit in Chinese yuan (RMB) have been opened on behalf of
one of our most major corporate clients,” the statement said.
The
decision is part of an overall surge in Chinese issuance of letters of
credit since 2012, as Chinese investors themselves are partial to using
letters of credit in transactions. “We recognize the positive trend of strengthening partnerships with Chinese banks, especially after the signing of several agreements
at the APEC summit, held this November in Beijing. At the moment we are
seeing a growing interests in Russian companies in local currency
settlements, in particular the Chinese yuan, and of course, rubles,” Andrey Ivanov, director of trade finance and correspondence relations at Sberbank CIB, said, Vesti reported.
In
October, Moscow’s and Beijing’s central banks signed a three-year
ruble-yuan currency swap deal worth up to $25 billion, with the aim of
boosting trade using national currencies and lessen dependence on the
dollar and euro.
Russia turned to China, the world’s second largest economy – and largest by some economic indicators - after the US and EU imposed sanctions on Russia over the events in Ukraine earlier this year.
Overall trade between Russia and China increased by 3.4 percent in the first half of 2014, reaching $59.1 billion. The two neighbors expect annual trade to hit $200 billion by 2020. China is Russia’s second-biggest trading partner, after the EU. - RT.
Russia's President Vladimir Putin shakes hands with his China's counterpart Xi Jinping (RIA Novosti/Mikhail Klimentiev)
November 10, 2014 - PARADIGM SHIFT -
President Vladimir Putin and Chinese leader Xi Jinping have signed a
memorandum of understanding on the so-called “western” gas supplies
route to China. The agreement paves the way for a contract that would
make China the biggest consumer of Russian gas.
Putin, Xi Jinping sign mega gas deal on second gas supply route
Russia’s so-called “western” or "Altay" route would supply 30 billion cubic meters (bcm) of gas a year to China.
The
new supply line comes in addition to the “eastern” route, through the
“Power of Siberia” pipeline, which will annually deliver 38 bcm of gas
to China. Work on that pipeline route has already begun after a $400
billion deal was clinched in May. “After we have launched
supplies via the “western route,” the volume of gas deliveries to China
can exceed the current volumes of export to Europe,” Gazprom CEO Aleksey Miller told reporters, commenting on the deal.
Speaking
to journalists on the eve of his visit to Beijing, Putin was optimistic
about prospects for the new gas deal with China. “We have reached an understanding in principle concerning the opening of the western route,” Putin said. “We
have already agreed on many technical and commercial aspects of this
project, laying a good basis for reaching final arrangements.”
The “western” route deal is one of the 17 agreements signed at the Sunday meeting between Putin and Xi.
They
also included a framework agreement between Gazprom and China’s CNPC on
gas deliveries and a memorandum of understanding between Gazprom and
another Chinese energy giant, CNOOC.
Gazprom and CNPC have also
signed a preliminary agreement for China National Oil and Gas
Exploration and Development to take a 10 percent stake in Russia's
Vancorneft.
Among the business issues discussed by Putin and Xi at
their fifth meeting this year was the possibility of payment in Chinese
yuan, including for defense deals military, Russian presidential
spokesman Dmitry Peskov was cited as saying by RIA Novosti.
Brendan P. O'Reilly, China-based writer and educator from Seattle, told RT that transport to China was extremely easy:
"One of the most attractive things about Russian gas for the Chinese is that it can be transported over land," he said. "Most
of China’s energy resources are imported via sea through the Pacific,
and this route is slightly threatened by the American military presence
now in the Pacific. Of course there’re a lot of territorial disputes
right now between China, Japan, and various other countries in the East
China Sea and the South China Sea. So basically by strengthening energy
ties with Russia, China can avoid the more dangerous maritime route."
"Russia
stands to benefit from this development with China very much because
right now the vast majority of Russian gas is being exported to Europe.
So Russian having a second large buyer improves the situation of
supply/demand for Russia by creating more demand in the east."
Russia ends dollar/euro currency peg, moves to free float
The
Bank of Russia took another step towards a free float ruble by
abolishing the dual currency soft peg, as well as automatic
interventions. Before, the bank propped up the ruble when the exchange
rate against the euro and dollar exceeded its boundaries. "Instead, we will intervene in the currency market at whichever moment and amount needed to decrease the speculative demand,” the bank’s chairwoman, Elvira Nabiullina, said in an interview with Rossiya 24 Monday.
The move is edging towards a floating exchange rate, which the bank hopes to attain by 2015. “Effective
starting November 10, 2014, the Bank of Russia abolished the acting
exchange rate policy mechanism by cancelling the allowed range of the
dual-currency basket ruble values (operational band) and regular
interventions within and outside the borders of this band,” the bank said in a statement Monday. "As
a result of the decision the ruble exchange rate will be determined by
market factors, which should promote efficiency of the monetary policy
of the Bank of Russia and ensure price stability," the central bank said.
Foreign exchange intervention is still at the bank’s disposal, and is ready to use in the case of “threats to financial stability,” according to the statement.
Propping
up the ruble can cost the Central Bank of Russia billions of dollars
per day, coming out of the country’s reserve fund. In October alone, the
bank was forced to spend $30 billion to defend the weakening ruble. On
November 5, the bank announced
it had limited the reserves it is willing to spend to inflate the ruble
to $350 million per day in order to slash speculation and volatility.
The decision triggered a three-day plunge for the Russian currency.
On
Monday, the ruble recovered slightly after Russian President Vladimir
Putin assured speculative drops would cease in the near future. The
Russian currency gained 1 ruble against the dollar and the euro on the
announcement.
The Russian ruble has weakened considerably along
with dipping oil prices, as well as the introduction of western
sanctions, which bars many Russian companies from long-term borrowing on
western capital markets.
New focuses in monetary policy
The
Central Bank of Russia’s un-pegging of the ruble from the dollar and
euro brings to an end two decades of exchange rate controls. The
transition to a free exchange rate means monetary policy in Russia moves
to interest rates and inflation targeting.
Experts say, this CBR
decision deprives speculators of baselines in the currency market and
will stabilize the exchange rate of the ruble against the dollar and
euro in the short-term, TASS reports.
Russia operated as soft peg
currency band from 1995 until 2008 when it was replaced by a dual
currency band of the euro and the dollar.
This mechanism allowed
interventions in the foreign exchange market to be adjusted by the
Central Bank conducting large-scale buying or selling of currency when
the ruble fell beyond the trading band perimeter. It was a mild form of
control over the ruble.
The Central Bank cancelled the currency
band in 2011, after the crisis of 2008. Then the ruble devalued by 40
percent and about a third of the country’s foreign exchange reserves was
spent supporting it. But the main reason for changing the CBR's policy
was its inability to curb inflation and reduce it to low single figures.
The
CBR then moved to a managed floating exchange rate, gradually widening
the currency band perimeters. The managed float assumed the Central Bank
didn’t prevent movements in the ruble exchange rate caused by the
influence of fundamental factors. Instead it smoothed out fluctuations
by intervening in the currency band. The rules were changed gradually
until foreign exchange interventions stopped today.
Ruble-yuan settlements will cut energy sales in US dollars – Putin
Reuters/Stringer
Doing
away with the US dollar and switching to ruble and yuan payments will
significantly increase Russia and China’s say in energy and financial
markets, Vladimir Putin has said, adding that the first deals are
already underway.
In short the President said the US dollar has no future, and that the ruble and the yuan have better long-term prospects. “Payments
in rubles and yuan are very promising. Switching to such a large-scale
work means that the impact of the dollar on the global energy sector
will objectively decline. This is not bad either for the global economy,
or the world of finance and the world energy markets,” Putin said at the APEC Business Summit in Beijing Monday. “It will help expand our capabilities in mutual trade and influence both world financial and energy markets," the president said.
Using
local currencies will speed up trade between the two countries who are
aiming to reach $100 billion by 2015. Trade between Russia and China is
already nearly $90 billion, and is scheduled to hit $200 billion in the
next six years. "The People’s Republic of China is one of our
key partners in the region. We will make greater use of settlements in
our national currencies in our trade with China. We are already carrying
out our first deals in rubles and yuan," Putin said.
Payments
in national currency are planned particularly in trading oil and that
Russian experts are currently assessing the possibility.
The two countries agreed on a currency swap worth up to $25 billion on October 13.
Moscow
and Beijing aim for a broader use of the yuan and the ruble in mutual
settlements across industries, including defense, telecoms, energy, and
mining, possibly by one of Russia’s major companies, according to Putin.
WATCH: Putin - Trade in rubles & yuan will weaken dollar’s influence.
Russia’s
second biggest bank, VTB, has already begun to reorient business
towards China and is working with Chinese regulators to remove
restrictions to allow ruble transactions. “Our contact with
the leadership of China’s biggest banks shows they share this interest.
This is consistent with the plan for China to bring the yuan to the next
level and make it a hard currency,”
VTB head Andrey Kostin said at the summit, as quoted by RIA.
A
switch to domestic currencies is a huge move for Russia and China as
both countries are members of the BRICS Bank which was established
earlier this year to try and challenge the global dominance of the US
dollar and such global lenders as the IMF and the World Bank.
China
and Malaysia also announced a new bank that uses the yuan as a reserve
currency, which means the dollar stands to lose its regional stronghold.
‘New level of cooperation’
The
currency swap is just a notch in the belt in developing Russia-China
economic ties. The two have grown closer over Russia’s disillusionment
with the West over the Ukraine crisis and sanctions. “Cooperation between Russia and the Asian-Pacific nations is of the utmost importance to us,” Putin said.
Symbolic of the deepening rapport was the signing of the second major gas deal in six months, which has the potential to make China Russia’s largest energy customer.
Putin named China as Russia’s biggest regional partner, and even offered the country stakes in Russian energy projects.
WATCH: Ruble Bounce - Currency strengthens as central bank loosens controls.
“We are also examining possibilities for our Chinese partners to acquire stakes in some of our biggest production assets,” Putin said.
On
Sunday, Russia’s oil giant Rosneft and China National Oil and Gas
Exploration and Development Corporation signed an agreement on the
acquisition of a 10 percent stake in Vankorneft, a Rosneft subsidiary
that develops oil in Russia’s Eastern Siberia. Rosneft has also offered
China a share in its second-largest oil field, Vankor, which is
estimated to have reserves of 520 million metric tons of oil and 95
billion cubic meters of natural gas.
Russia may opt to include
China in the big oil and gas projects in the Far East, namely on
Sakhalin Island, north of Japan. Among the international partners is
Japan which has a 30 percent stake in the Sakhalin-1 project and a 22
percent in the Sakhalin-2.
WATCH: Jim Rogers - By the end of this decade US dollar will lose world dominance.
Russia's second biggest bank VTB may leave London Stock Exchange
VTB Bank president, chairman of the board and Supervisory Council head Andrei Kostin (RIA Novosti/Vladimir Astapkovich)
VTB
Bank may quit the London Stock Exchange (LSE), and is currently in
talks to get more loans from Asia, CEO Andrei Kostin has said. “We hope they [negotiations with London exchange – Ed.] will recover the situation. If not, we are considering quitting,” Kostin told journalists at the APEC summit in Beijing, adding there’s a possibility of delisting.
Kostin
said the bank is complaining about demands made by the LSE, which he
considers tougher than those put forward by US sanctions. “The issue must be somehow clarified or finished with soon,” Kostin said.
He
added the bank is now talking with Asian bourses about drawing down
syndicated and subordinated loans. He mentioned both the Tokyo and
Shanghai exchanges.
He said the exchange of Shanghai may be of
particular interest due to the conditions created by the London and New
York exchanges. The issue of costs that may occur in switching from one
exchange to another hasn’t yet been negotiated, Kostin said.
On July 31 the EU introduced
sanctions against the Russian financial sector. Five major Russian
state-owned banks – Sberbank, VTB, Gazprombank, Vnesheconombank (VEB)
and Rosselkhozbank (Russian Agricultural Bank) – have been banned from
receiving any long-term (over 30-day) loans from EU markets.
Chinese banks to invest over $10bn in Siberian LNG project
RIA Novosti / Vitaliy Ankov
Russia's
largest independent natural gas producer Novatek is in talks with
Chinese banks to get over $10 billion for its Yamal liquid natural gas
(LNG) project, according to the company’s key owner Gennady Timchenko. "Given
the situation with the sanctions, we will work tightly with Chinese
banks. Negotiations are in full swing, it is necessary to agree on
conditions," RIA quotes Timchenko saying on Friday. He added the
total investment of Chinese banks is expected to be over $10 billion,
but everything can change. Timchenko said the issue will be discussed in detail during the forthcoming visit of Russian President Vladimir Putin to China.
Novatek
is negotiating with various Chinese and Indian companies over the sale
of a 9 percent stake in the Yamal LNG project, says Timchenko.
The
Yamal project includes the construction of a plant capable of producing
16.5 million tons of LNG per year. The deposit located in the Northeast
Siberian Yamal peninsula has potential gas reserves of more than 900
billion cubic meters.
The total cost of the project is $26.9
billion. The first stage of the plant is expected to be opened by 2017.
It is planned to be developed in three stages. Yamal LNG is a joint
project of Novatek with a 60 percent share, Chinese petroleum
corporation CNPC with 20 percent, and France’s Total with 20 percent.
China announces $40 bn Silk Road fund
The Silk Road connected China and Europe from around 100 B.C. The
4,000-mile road linked ancient
Chinese, Indian, Babylonian, Arabic,
Greek and Roman civilizations [Xinhua]
Chinese
President Xi Jinping on Saturday announced China will contribute $40
billion to set up a Silk Road Fund to strengthen connectivity in the
Asia-Pacific region.
Xi said the goal of the Fund is to “break the bottleneck in Asian connectivity by building a financing platform.”
The
new Silk Road Fund will be used to provide investment and finance for
infrastructure, industrial projects along the “Belt and Road”, Xi said,
referring to China’s Silk Road Economic Belt and the 21st Century
Maritime Silk Road initiatives.
He added that the fund will be “open” to investors from both within and outside Asia.
The
Asian Development Bank has estimated that in the next decade Asian
countries will need $8 trillion in infrastructure investments to
maintain the current economic growth rate.
“The Silk Road boasts a
3-billion population and a market that is unparalleled both in scale
and potential,” Xi said in September last year.
The Silk Road connected China and Europe from around 100 B.C.
The 4,000-mile road linked ancient Chinese, Indian, Babylonian, Arabic, Greek and Roman civilizations. A new map unveiled by Xinhua
shows the Chinese plans for the Silk Road run through Central China to
the northern Xinjiang from where it travels through Central Asia
entering Kazakhstan and onto Iraq, Iran, Syria and then Istanbul in
Turkey from where it runs across Europe cutting across Germany,
Netherlands and Italy.
The maritime Silk Road begins in China’s Fujian and ends at Venice, Italy.
One of the first projects of the new Bank is expected to be financing infrastructure projects along the “Silk Road Economic Belt” and the “Maritime Silk Road” re-establishment.
Meanwhile
on Saturday in Beijing, the Chinese President stressed that efforts
should be made to realize Asia’s connectivity by making Asian countries a
priority.
“Asian countries are just like a cluster of bright
lanterns. Only when we link them together, can we light up the night sky
in our continent,” he said.
China will provide neighboring countries 20,000 training opportunities for connectivity professionals in the coming five years.
Experts say these new announcements will boost China’s global influence and enhance its soft power.
Chinese President Xi Jinping (C) shows the way to the guests of the
Asian Infrastructure Investment Bank at the Great Hall of the People in
Beijing on October 24, 2014 (AFP Photo / Takaki Yajima)
October 24, 2014 - CHINA - China and India are backing a 21 country $100 billion Asian Infrastructure Investment Bank (AIIB) to challenge to the World Bank and Asian Development Bank.
Memorandum of understanding were signed with 21 Asian countries in Beijing Friday. Australia, Indonesia and South Korea were absent following hidden pressure from Washington.
The development bank was proposed a year ago by Chinese President Xi Jinping, and is to offer financing for infrastructure projects in underdeveloped Asian countries.
Headquartered in Beijing, former chairman of the China International Capital Corp investment bank Jim Liqun, is expected to take a leading role.
The bank will initially be capitalized with $50 billion, most of it contributed by China.
The country is planning to increase authorized capital to $100 billion. With that amount the AIIB would be two-thirds the size of the $175 billion Asian Development Bank.
India will be the second largest bank shareholder though Kuwait, Qatar, Mongolia, Kazakhstan, Pakistan, Nepal, Oman, and all the countries of the Association of Southeast Asia, except Indonesia are involved.
Australia, Indonesia and South Korea did not participate following US claims of ‘concerns’ about a rival to Western-dominated multilateral lenders.
Japan, China's main rival in Asia, which dominates the Asian Development Bank along with the United States, did not attend but had not been expected to do so.
Indonesia refused to participate claiming it needs time to discuss China’s proposal.
The Australian Financial Review said US Secretary of State John Kerry had personally asked Australian Prime Minister Tony Abbott to “steer clear” from joining AIIB.
"Australia has been under pressure from the US for some time to not become a founding member of the bank and it is understood Mr. Kerry put the case directly to the prime minister when the pair met in Jakarta on Monday following the inauguration of Indonesian President Joko Widodo," the paper said.
South Korea, one of America’s closest allies in Asia, is alse prevaricating. Its finance ministry said it spoke with China to request more time to consider details such as the AIIB's governance and operational principles.
US officials have said they do not want to support an initiative Washington thinks is unlikely to promote good environmental, procurement and human rights standards in the way the World Bank and ADB are required to do.
But Chinese officials are convinced the American opposition is an attempt to contain the global rise of China and its ambition to remain the dominant power in Asia.
“You could think of this as a basketball game in which the US wants to set the duration of the game, the size of the court, the height of the basket and everything else to suit itself,” Wei Jianguo, a former Chinese commerce minister, told the Financial Times.
Matthew Goodman, scholar at the Center for Strategic and International Studies in Washington DC believes the initiatives of a BRICS Bank and AIIB “represent the first serious institutional challenge to the global economic order.”
Chinese Finance Minister Lou Jiwei said the AIIB will set high standards, safeguard policies and improve on bureaucratic, unrealistic and irrelevant policies, according to the Xinhua news agency. - RT.
June 16, 2014 - VATICAN - Pope Francis has criticized Europe for a declining birthrate, a high
percentage of unemployed people and discarding the elderly. He called
Europe “tired,” saying it risks becoming a “throw-away culture.”
Pope Francis caresses a baby's head upon his arrival at Rome's Basilica
di Santa Maria in
Trastevere Square on June 15, 2014. (AFP Photo /
Filippo Monteforte)
“Europe is tired. We have to help rejuvenate it, to find its roots. It’s true: it has disowned its roots. But we need to help it find them,” Francis said during his visit to the Community of Sant'Egidio in Rome’s Santa Maria in Trastevere Basilica. The community’s volunteers provide various forms of help to homeless, immigrants, elderly, disabled, and young people.
According to Francis, the treatment of the elderly and children “is an indicator showing the quality of a society. “
“When the elderly are discarded, when the elderly are isolated and sometimes closed off without affection, it’s a bad sign!” said the Pope.
Francis said that the youth and the elderly “carry history forward,” as young people give the society “biological strength" while old people “give them their memory.”
“When a society loses memory, it’s over. It’s terrible to see a society, a people, a culture that has lost memory,” he said, “A people that does not safeguard its elderly, that does not take care of its young people, is a people without a future, a people without hope.”
Francis warned that with the current situation the European society may easily become a “throw-away culture.”
“Children are thrown away: no children. Just think of the growth rate of children in Europe: in Italy, Spain, France. The elderly are thrown away with these attitudes, behind which is a hidden euthanasia, a form of euthanasia: uselessness. That which isn’t useful is thrown away,” said Francis.
The Pope also spoke about high rates of unemployment in Europe which affect young people in the union.
“And today the crisis is so great that young people are discarded: when we think of these 75 million young people of 25 years or younger, who are ‘neither-nor’ - neither working, nor studying. It happens today, in this tired Europe, eh?” he said.
The Pope also slammed “the idol of money” in the region’s economy, which makes the poor “more and more poor, depriving them of the essentials, such as home and work.”
Pope Francis has already carved himself a reputation of being unlike previous popes. He called for the legitimate redistribution of the world’s wealth in order to help the poor. Francis also attacked the global economic system, which shouldn’t be based on “a god called money” anymore. - RT.
May 13, 2014 - SPACE - Dark matter could sling lethal meteors at Earth, potentially causing
mass extinctions like the cataclysm that ended the Age of Dinosaurs,
Harvard scientists say.
Artist’s impression of a 6-mile-wide asteroid striking the Earth. Scientists think approximately 70 of these dinosaur killer-sized or larger asteroids hit Earth between 3.8 and 1.8 billion years ago. Credit: Don Davis
Physicists think the mysterious, invisible substance called dark matter makes up five-sixths of all matter in the universe. It was first detected by the strength of its gravitational pull, which apparently helps keep the Milky Way and other galaxies from spinning apart, given the speeds at which they whirl.
Scientists have recently suggested that a thin, dense disk of dark matter about 35 light-years thick lies along the central plane of the Milky Way, cutting through the galaxy's disk of stars. The sun travels in an up-and-down, wavy motion through this plane while orbiting the center of the galaxy.
Researchers suggest this disk of clouds and clumps made of dark matter might disturb the orbits of comets in the outer solar system, hurling them inward. This could lead to catastrophic asteroid impacts on Earth, of the kind that likely ended the Age of Dinosaurs, said theoretical physicists Lisa Randall and Matthew Reece at Harvard University.
Past research has suggested meteor bombardment of Earth rises and falls in a cycle about 35 million years long. In the past, scientists have proposed a cosmic trigger for this cycle, such as a potential companion star for the sun with the dramatic name "Nemesis."
These illustrations, taken from computer simulations, show a swarm of dark matter clumps around our Milky Way galaxy. Image released July 10, 2012. Credit: J. Tumlinson (STScI)
Instead of blaming a "death star" for these catastrophes, Randall and Reese point out that this cycle of doom closely matches the rate at which the sun passes through the central plane of the Milky Way. This hints that the galaxy's "dark disk" may be the actual culprit.
The researchers analyzed craters more than 12 miles (20 kilometers) wide created in the past 250 million years, and compared their pattern against the 35-million-year cycle. They found that it was three times more likely that the craters matched the dark matter cycle than that they occurred randomly.
This cycle might have killed off dinosaurs about 67 million years ago. "The cycle is slightly off for that mass extinction, but we have an incomplete data set regarding impact craters, so maybe with more information the cycle might fit what we know better," Randall told Space.com.
Although a three-to-one chance sounds impressive, the researchers cautioned that this statistical evidence is not overwhelming.
The scientists note that the European Space Agency's Gaia mission could reveal the existence or nonexistence of a dark matter disk. Launched in 2013, this mission will create a precise 3D map of stars throughout the Milky Way, potentially confirming or denying the existence of a dark disk that gravitationally influences stellar motions.
"Even if it's a remote possibility that dark matter can affect the local environment in ways that have noticeable consequences over long periods of time, it's still incredibly interesting," Randall said.
The scientists detailed their findings online April 20 in the journal Physical Review Letters. - SPACE.
February 14, 2014 - GLOBAL ECONOMY - This morning Reuters obtained a leaked proposal disclosing that
European Union officials are looking for new and innovative ways to fund
their immense debt levels.
As noted by Zero Hedge,
they’re no longer turning exclusively to central bankers to simply
print more money as needed. Because last year’s bank bail-in forcing the
confiscation of funds from average depositors in Cyprus worked so well,
EU regulators and bankers have determined that they’ll use a similar
method to fund their future endeavors.
In a nutshell, and in Reuters’ own words, “the
savings of the European Union’s 500 million citizens could be used to
fund long-term investments to boost the economy and help plug the gap
left by banks since the financial crisis, an EU document says.”
…
The solution? “The Commission will ask the bloc’s insurance watchdog
in the second half of this year for advice on a possible draft law “to mobilize more personal pension savings for long-term financing”, the document said.”
Mobilize, once again, is a more palatable word than, say, confiscate.
This is what happens when governments run out of money.
But if you think this is limited to just Europe, then consider the
words of President Barack Obama in his recent State of the Union
address.
For all intents and purposes, a similar groundwork is being laid right here in America.
They’ve already taken over the health care industry… why not nationalize our retirement savings while they’re at it?
(Reprinted with permission from Sovereign Man. You can read the full analysis here.) This is basically the offer that the President of the United States floated last night.
And like an unctuously overgeled used car salesman, he actually
pitched Americans on loaning their retirement savings to the US
government with a straight face, guaranteeing “a decent return with no
risk of losing what you put in. . .”
This is his new “MyRA” program. And the aim is simple– dupe unwitting Americans to plow their retirement savings into the US government’s shrinking coffers.
We’ve been talking about this for years. I have personally written
since 2009 that the US government would one day push US citizens into
the ‘safety and security’ of US Treasuries.
Back in 2009, almost everyone else thought I was nuts for even
suggesting something so sacrilegious about the US government and
financial system.
But the day has arrived. And POTUS stated almost VERBATIM what I have been writing for years.
The government is flat broke.Even by their own assessment,
the US government’s “net worth” is NEGATIVE 16 trillion. That’s as of
the end of 2012 (the 2013 numbers aren’t out yet). But the trend is
actually worsening.
In 2009, the government’s net worth was negative $11.45 trillion. By
2010, it had dropped to minus $13.47 trillion. By 2011, minus $14.78
trillion. And by 2012, minus $16.1 trillion.
Here’s the thing: according to the IRS, there is well over $5
trillion in US individual retirement accounts. For a government as
bankrupt as Uncle Sam is, $5 trillion is irresistible.
They need that money. They need YOUR money. And this MyRA program is the critical first step to corralling your hard earned retirement funds.
At our event here in Chile last year, Jim Rogers nailed this right on
the head when he and Ron Paul told our audience that the government
would try to take your retirement funds:
WATCH: Jim Rogers and Ron Paul on IRA Confiscation.
I don’t know how much more clear I can be: thisishappening.
This is exactly what bankrupt governments do. And it’s time to give
serious, serious consideration to shipping your retirement funds
overseas before they take yours.
As former Congressman Ron Paul notes, the government will stop at nothing.
“They’ll use force and they’ll use intimidation and they’ll use guns,
because you can’t challenge the State and you can’t challenge the
State’s so-called right to control the money,” warns Paul. “It’s already
indicated that they will confiscate funds and they will [confiscate]
pension funds.”
This didn’t just happen over night. The move to make this reality has
been going on for quite some time. The first time it was mentioned
publicly in any official capacity was at a 2010 Congressional hearing:
Democrats in the Senate on Thursday held a recess hearing
covering a taxpayer bailout of union pensions and a plan to seize
private 401(k) plans to more “fairly” distribute taxpayer-funded pensions to everyone.
Sen. Tom Harkin (D-Iowa), Chairman of the Health, Education, Labor
and Pensions (HELP) Committee heard from hand-picked witnesses
advocating the infamous “Guaranteed Retirement Account” (GRA) authored
by Theresa Guilarducci.
In a nutshell, under the GRA system government would seize private 401(k) accounts,
setting up an additional 5% mandatory payroll tax to dole out a “fair”
pension to everyone using that confiscated money coupled with the
mandated contributions. This would, of course, be a sister government
ponzi scheme working in tandem with Social Security, the primary purpose
being to give big government politicians additional taxpayer funds to
raid to pay for their out-of-control spending.
You’d think that such an idea would be immediately dismissed by the
American public, but it has only gained steam since, as evidenced by a 2012 hearing held at the U.S. Labor Department:
The hearing, held in the Labor Department’s main
auditorium, was monitored by NSC staff and featured a line up of
left-wing activists including one representative of the AFL-CIO who
advocated for more government regulation over private retirement
accounts and even the establishment of government-sponsored annuities
that would take the place of 401k plans.
“This hearing was set up to explore why Americans are not saving as
much for their retirement as they could,” explains National Seniors
Council National Director Robert Crone, “However, it is clear
that this is the first step towards a government takeover. It feels just
like the beginning of the debate over health care and we all know how
that ended up.”
…Such “reforms” would effectively end private retirement accounts in America, Crone warns.
A few years ago the government of the United States of America
nationalized nearly 1/6th of our economy when they took over the health
care system with forced mandates. In the process they essentially took
control of $1.6 trillion in yearly industry revenues.
But that’s nothing compared to private savings. The total amount of retirement assets in America, including 401k, IRA and savings accounts is around $21 trillion. With
our national debt coincidentally approaching the same, the government
sees big money and potentially a way out of our country’s fiscal
disaster.
This will start voluntarily with the MyRA and other state-sponsored
programs. But when not enough Americans are making it their patriotic
duty to turn over their funds to their government, they’ll mandate
compliance with the stroke of a pen just as they did with the Patient Affordable Care Act.
And just like Obamacare it will be enforced by the barrel of a gun.
Failure to comply will mean confiscation without recourse and prison
time.
All they need now is a trigger.
And that trigger will likely come in the form of another stock market
collapse. Wipe out Americans’ in a stock market crash and scare the
heck out of them with more economic bad news, and millions of our
countrymen will be all too willing to hand it over to Uncle Sam. Panic
is a powerful motivator and what better way to get people on board than
by threatening them with squalor and destitution in their old age if
they don’t go along with it?
Government officials have been actively working to make this a reality for years. The Europeans are doing the same.
You can put your head in the sand or cover your ears and pretend this is not happening, but that won’t change the outcome.
They will take everything they can get their hands on. - SHTF Plan.
