The American Dollar is Dumping Vietnam By JC Collins
May 16, 2014 And Why That’s A Good Thing Not long after landing in Vancouver and leaving the airport we came upon a small protest along Granville Street. Vietnamese Canadians held signs demanding that China stop the invasion of their homeland. There was a lameness about it as no one appeared to care or give it much attention. In fact, there was a level of irritation over the slowing of traffic and blocking of local business. ~~~ 
We were in Vancouver for the 2014 Canadian Institute of Mining Convention. Every year the mining industry in Canada gets together to share technological advancements and industry knowledge. The CIM attracts national leaders and businesses from within Canada and abroad.
This year there was a strong contingent of Chinese businesses looking for national distribution of their products and services. They stuck together in one area of the convention and didn’t seem to attract much attention outside of the odd curious passerby. They were very cheerful and welcoming to those who ventured within speaking distance. My interaction with them was very friendly and kind. They left a happy impression. The Chinese have developed everything from large mining shovels to underground mining equipment. The quality of some of the products was obviously lacking. But the drive to succeed and improve was evident. There is a level of enthusiasm about them that the western mind has seemed to have forgotten. All success begins with enthusiasm. This is the same drive and determination which the Vietnamese have shown in their push to modernize and rebuild their country after the Vietnam War. In the post Why the Vietnamese Dong Will Reset we covered this drive and the strategies which Vietnam utilized to export products and services under constant U.S. sanctions. But there is more to the story. It is encouraged in the western world to say that the United States lost the war in Vietnam. Though the media presents the so-called facts as a withdrawal, the slant in presentation along with the manufactured alternative medias proclamations of American defeat are clear. Like other areas of economics and geopolitics which we discuss here, defining wars in simplistic terms of winning and losing is nonsensical and detrimental to a full understanding of current and historical events. Wars are never about winning or losing but about gain. Since two cavemen fought with sticks over a water source, no war has ever been fought for ideological or humanitarian reasons. Every war in the history of the world has been over economics. It is recognized that economics are an extension of the human survival instinct. The Vietnam War was about the hunt for WW2 gold and the securing of resources. Based on this filter, the United States got exactly what it wanted from the war. It is common knowledge for most readers that the U.S. dropped the dollars anchor to gold in 1971 so they could continue printing more fiat currency. It is also common knowledge that the creation of the petrodollar also facilitated this process. So with the Paris Agreement on January 27, 1973, during the time period when the petrodollars status was being secured, the American congress cut funding to South Vietnam, in essence handing them over to the North. The last American troops left Vietnam on Mar 29, 1973. Saigon finally fell to the North on April 30, 1975. So what was it about the Paris Agreement which encouraged congress to cut funding to the south? Securing the status of the petrodollar was accomplished by forcing or getting all energy exporting countries to sell their energy in dollars. North Vietnam was heavy in coal and the off-shore oil fields still needed to be further developed. The Paris Agreement covered both the coal and oil exporting capabilities of Vietnam and ensured that exports would be completed in U.S. dollars. This was the goal of the American interests which encouraged the war from the beginning. North Vietnam sold out to the dollar in return for gaining political control over the South. Communism was never the real threat, but only the manufactured “problem” component of the Hegelian Dialectic. Ideologies were designed and used that way intentionally. It has been so since the French Revolution. Since the fall of Saigon, energy production in Vietnam has increased by 10% annually. All sold in U.S. dollars. Though there have been variations in Vietnams energy exports over the years, they still remain one of the most pro-American countries in Asia. The dollar is primarily used within Vietnam as the dong has been intentionally devalued by the State Bank of Vietnam to encourage an influx of American inflation. The fact that China is now setting up an oil rig in Vietnams Economic Zone is very telling of the move away from the dollars reserve status and towards a multilateral reserve currency system. As reported previously, Vietnam has been slowly and quietly decreasing their dollar reserves and increasing their SDR reserves. Like in the Ukraine, the Hegelian Dialectic is also playing out in the South Pacific. When we see China sending naval ships to secure and enforce its position in the new and emerging paradigm, and no response from America other than “we take no position on China’s disputes in the China sea“, how are we to interpret that when displaced by the obvious contradiction being displayed in the Ukraine? 
The answer is because it is designed that way. The stage drama is unfolding as planned and the end game is the removal of the dollar as the world’s primary reserve currency.
Awhile back I stated that Russia is playing the bad guy and China is quietly left out of the negative media game because it will facilitate the positive component of the transition to the SDR system. This is exactly what can be inferred from the constant negative portrayal of Russia over the Ukraine and the dismissive American response to China’s moves against Vietnam. When I first started this blog I wrote in the SDR’s and New Bretton Woods series that we would see more national protests and civil unrest as the system transitions. This Hegelian Dialectic component is required in order to move the minds of the masses in the desired direction. Each area in the world where there is tension and unrest are areas where American dollar interests are attempting to maintain a foot hold or areas where those interests are being pushed out to make room for the multilateral reserve SDR. Most of the readers here have already caught on to the fact that the IMF loan to Ukraine was paid in SDR’s as opposed to the traditional IMF loan denominated in dollars. We can also expect to see more of that as well. Many opponents of what I present here in regards to the SDR system make the case that the BRICS countries will never accept the American dominated institutions of the IMF, BIS and World Bank. These are not American institutions. They are institutions which were created to control and expand the dollar debt system. These institutions have controlled the United States and any other country which used dollars. Many times already I have stated that the Bank for International Settlements controls all the central banks in the world. This includes the central banks of the BRICS countries. No BRICS bank is going to exist outside of the structure of the new multilateral system. All will be consolidated and centralized. With each passing week America becomes more isolated from its traditional allies. Europe is looking less likely to support American sanctions on Russia, and even France is going ahead with a ship deal with Russia. China, the voice of reason suddenly, is stating their opposition to “unproductive sanctions”. Russia and China are on the verge of announcing a massive energy trade deal which will put the final touches on the dollars removal from its reserve status. A “substantial statement” is expected from the two countries during meetings in Shanghai on May 20 and 21. During meetings at the CIM in Vancouver with large mining contractors and mine operators the general consensus is that commodity prices have to increase in order for there to be a recovery in the international mining industry. It is expected that a large tech company, say a Twitter, will see a dramatic collapse of its overvalued stock and the money which has poured into the new tech bubble will flee into the more secure investments which actually produce something of real value, say like mining and commodities. But what will it take for commodity prices to increase? There seemed to be a complete unawareness of the dollars current precarious situation and the emergence of a multilateral SDR system. The western world is still stuck in the dollar mindset. New energy trade deals will blaze the trail away from the dollar and towards the SDR system, after a short stop in regional currencies. One day soon the western world will awaken to the news that oil transactions are now being completed in rubles, yuan, or whatever is agreed upon between two countries, or groupings of countries. It will be a mess for awhile until the SDR is presented as the solution to the manufactured problem. When the commodities of the world are priced in SDR’s the international mining industry will surge and become recapitalized. Until then we will watch as the stage drama continues to unfold. Public opinion is being masterfully manufactured. America is signalling its intent to allow Vietnam to be sucked into the Chinese orbit. They dumped dollar inflation into Vietnam and now they are dumping Vietnam itself. And this is a good thing for the people of Vietnam. After the transition is complete, Vietnam will be even more economically viable as their own currency moves to the forefront of their international energy agreements. The M1 money supply of the dong, as discussed in the New Exchange Rate System, will be consolidated under an SDRM – Sovereign Debt Restructuring Mechanism –
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U.S. Treasury Renminbi Bonds By JC Collins
Carney was a tool but had the largest steel marbles on the block. The “steely” was the most sought after and traded of all the marbles, and Carney was a grand collector.
Myths were born from his ability to bully smaller kids into trading their one or two heavy spheres for ten or twenty smaller and bland marbles. At one point I was certain that he had all the steelies in a 1 mile radius.
~~~
The afternoon laughter was usually broken by his emergence from the alley and into the field where we kids met every Saturday for the traditional game of marbles. With his girth and weight he would trample the smaller of the lot and settle at the highest edge of the ring.
Everyone hated playing with Carney because you would never win, even if you did. It was a lose-lose proposition which many refused to participate in.
Eventually a small grouping of kids joined together and began to avoid Carney altogether. They would randomly change the location each Saturday and start earlier in the afternoon.
With each passing weekend Carney became more upset and angry over missing the games, not because he couldn’t expand his collection of steelies but because he was left out of the game altogether.
A method of separating Carney from his steely collection was soon devised. For each weekend which he wished to play, he had to trade back one large steely for smaller and less valuable marbles. Though not pleased about this at all, his choices were simple now that a group had taken up defense against him.
One, he could continue to bully and unfairly trade with the other kids in order to expand his already large steelie collection. Or two, he could trade fairly and still be allowed to play the game with the others.
With the kids no longer divided, Carney’s choice was clear. The feeling of isolation and being left out was more impactful than the feelings of unwarranted reward. For what was the real value of his steely collection if nobody else wanted to play a game that involved them.
Never once in our childhood understanding of events did we question the fact that the real value of the marbles was provided by the parents who would give us the assorted bags and send us on our way.
So focused on beating each other and transferring marbles amongst ourselves that we never thought to consider where the marbles were actually coming from.
As we continue on into adulthood there isn’t much that changed. Marbles are replaced with money and we have no idea where it came from. We just seeked to acquire more of it and trade with it.
The mechanism of how the U.S. Treasury issues dollar denominated bonds which are purchased by the Federal Reserve and foreign central banks is never fully understood by a very large percentage of the population.
It works the same in every country.
But can the U.S. Treasury issue bonds denominated in another countries currency? Say the Chinese Renminbi?
The short answer is yes.
How do we know this?
Simple, it was done before.
In 1978 the faith in the U.S. dollar was at an all time low and many countries were afraid that the dollar was becoming a bad store of value.
Considering the debt process of money creation, once the Federal Reserve starting printing mass amounts of money in 1944 to stuff the central banks around the world in support of the reserve currency status, the Treasury needed to continue issuing bonds so the process wouldn’t fall flat and collapse the larger economy.
These bonds were called Carter bonds and were denominated in German marks and Swiss francs. The intent was to continue attracting foreign investments into Treasuries.
At the time many countries, including U.S. ally Japan, felt that the Treasury was attempting to inflate the debt away by devaluing the dollar. With increased money printing, being debt creation or expansion of credit, comes higher inflation. The more money you print, and the faster you print it, the faster inflation increases.
Faster inflation will eventually lead to negative real interest rates which in turn is a method of transferring debt away from investors and back to the government.
This is the QE money printing taking place at the Federal Reserve. With more QE we have seen higher inflation in the countries which hold Treasury debt.
The taper, designed flawlessly, is now transferring that devalued debt back to the government. In turn, as the debt comes home, gold is going the other way. Its a trade back, just like the steelies that Carney unfairly acquired from the other players.
One of the first posts I made here on PoM was titled China to Purchase the Federal Reserve. The essay got a lot of attention and has been well circulated around the internet.
As prosperous as it first sounded, many things have happened since to suggest that the thesis may not have been that far from the mark.
To help understand what type of process could facilitate this business transaction, here’s an article from 2012 titledFed Clears Way for Chinese Firms to Buy US Banks.
The purchase of the JP Morgan building by a Chinese firm has been well covered. The important thing to remember about this deal was that no one saw it coming until it was announced.
The same can be expected in the coming months as larger US bank purchases by Chinese firms are announced and the takeover of industry openly commences. See post The New American Industrialization.
China has so heavily invested in Detroit that its now being wondered if that city will be the first Chinese American city in the new financial and industrial age that is upon us.
When the Fed taper reaches zero I would suspect that we will see some dramatic moves in bond denomination. Western gold reserves are depleting at the similar rate as the taper. The balance between gold reserves and dollar debt is where the future tales are foreshadowed.
Many are selling fear oriented scenario’s based on economic collapse and dollar calamity. It is reasoned that hyperinflation will strike America and send prices skyrocketing.
But inflation has been a constant since 1913. It’s commonly acknowledged that the method of measuring inflation has been manipulated along with all the other economic indicators, none more so than gold, silver and oil.
In the post The Greatest Game I suggested that gold and stock markets will collapse when the financial system completes the inevitable transition to the multilateral SDR system.
Perhaps I am also guilty of using the word collapse but in the article and subsequent comments I make plan that few will notice much of a difference once the transition is complete.
In regards to gold, the big steely, we have seen the prices go up as QE was increasing. As the taper has unfolded we have seen the price of gold come down.
The other scenario we hear a lot about is that gold will rise to atmospheric levels when the dollar collapses. The dollar has already collapsed. Or is collapsing as we speak.
This is why inflation numbers are manipulated. This is why gold prices are manipulated. This is why the Fed is now tapering.
This is why the gold has already mostly gone East. This is why China is purchasing US banks and investing in American industry.
And this is why prices for goods are already going up in America, and have been for the last few years. Its just that there is little discussion about it.
The so-called collapse already happened. It’s just that no one noticed because it was hidden within QE and taper numbers, along with zero interest rates, high gold prices, and manufactured inflation metrics.
We are much closer to the final act of this financial system reset than many realize. Watch for the end of the taper. It approaches.
Like Carney having to trade his steelies back, the U.S. Treasury will soon be issuing Renminbi denominated bonds to secure investor confidence in America.
A method of separating Carney from his steely collection was soon devised. For each weekend which he wished to play, he had to trade back one large steely for smaller and less valuable marbles. Though not pleased about this at all, his choices were simple now that a group had taken up defense against him.
One, he could continue to bully and unfairly trade with the other kids in order to expand his already large steelie collection. Or two, he could trade fairly and still be allowed to play the game with the others.
With the kids no longer divided, Carney’s choice was clear. The feeling of isolation and being left out was more impactful than the feelings of unwarranted reward. For what was the real value of his steely collection if nobody else wanted to play a game that involved them.
Never once in our childhood understanding of events did we question the fact that the real value of the marbles was provided by the parents who would give us the assorted bags and send us on our way.
So focused on beating each other and transferring marbles amongst ourselves that we never thought to consider where the marbles were actually coming from.
As we continue on into adulthood there isn’t much that changed. Marbles are replaced with money and we have no idea where it came from. We just seeked to acquire more of it and trade with it.
The mechanism of how the U.S. Treasury issues dollar denominated bonds which are purchased by the Federal Reserve and foreign central banks is never fully understood by a very large percentage of the population.
It works the same in every country.
But can the U.S. Treasury issue bonds denominated in another countries currency? Say the Chinese Renminbi?
The short answer is yes.
How do we know this?
Simple, it was done before.
In 1978 the faith in the U.S. dollar was at an all time low and many countries were afraid that the dollar was becoming a bad store of value.
Considering the debt process of money creation, once the Federal Reserve starting printing mass amounts of money in 1944 to stuff the central banks around the world in support of the reserve currency status, the Treasury needed to continue issuing bonds so the process wouldn’t fall flat and collapse the larger economy.
These bonds were called Carter bonds and were denominated in German marks and Swiss francs. The intent was to continue attracting foreign investments into Treasuries.
At the time many countries, including U.S. ally Japan, felt that the Treasury was attempting to inflate the debt away by devaluing the dollar. With increased money printing, being debt creation or expansion of credit, comes higher inflation. The more money you print, and the faster you print it, the faster inflation increases.
Faster inflation will eventually lead to negative real interest rates which in turn is a method of transferring debt away from investors and back to the government.
This is the QE money printing taking place at the Federal Reserve. With more QE we have seen higher inflation in the countries which hold Treasury debt.
The taper, designed flawlessly, is now transferring that devalued debt back to the government. In turn, as the debt comes home, gold is going the other way. Its a trade back, just like the steelies that Carney unfairly acquired from the other players.
One of the first posts I made here on PoM was titled China to Purchase the Federal Reserve. The essay got a lot of attention and has been well circulated around the internet.
As prosperous as it first sounded, many things have happened since to suggest that the thesis may not have been that far from the mark.
To help understand what type of process could facilitate this business transaction, here’s an article from 2012 titledFed Clears Way for Chinese Firms to Buy US Banks.
The purchase of the JP Morgan building by a Chinese firm has been well covered. The important thing to remember about this deal was that no one saw it coming until it was announced.
The same can be expected in the coming months as larger US bank purchases by Chinese firms are announced and the takeover of industry openly commences. See post The New American Industrialization.
China has so heavily invested in Detroit that its now being wondered if that city will be the first Chinese American city in the new financial and industrial age that is upon us.
When the Fed taper reaches zero I would suspect that we will see some dramatic moves in bond denomination. Western gold reserves are depleting at the similar rate as the taper. The balance between gold reserves and dollar debt is where the future tales are foreshadowed.
Many are selling fear oriented scenario’s based on economic collapse and dollar calamity. It is reasoned that hyperinflation will strike America and send prices skyrocketing.
But inflation has been a constant since 1913. It’s commonly acknowledged that the method of measuring inflation has been manipulated along with all the other economic indicators, none more so than gold, silver and oil.
In the post The Greatest Game I suggested that gold and stock markets will collapse when the financial system completes the inevitable transition to the multilateral SDR system.
Perhaps I am also guilty of using the word collapse but in the article and subsequent comments I make plan that few will notice much of a difference once the transition is complete.
In regards to gold, the big steely, we have seen the prices go up as QE was increasing. As the taper has unfolded we have seen the price of gold come down.
The other scenario we hear a lot about is that gold will rise to atmospheric levels when the dollar collapses. The dollar has already collapsed. Or is collapsing as we speak.
This is why inflation numbers are manipulated. This is why gold prices are manipulated. This is why the Fed is now tapering.
This is why the gold has already mostly gone East. This is why China is purchasing US banks and investing in American industry.
And this is why prices for goods are already going up in America, and have been for the last few years. Its just that there is little discussion about it.
The so-called collapse already happened. It’s just that no one noticed because it was hidden within QE and taper numbers, along with zero interest rates, high gold prices, and manufactured inflation metrics.
We are much closer to the final act of this financial system reset than many realize. Watch for the end of the taper. It approaches.
Like Carney having to trade his steelies back, the U.S. Treasury will soon be issuing Renminbi denominated bonds to secure investor confidence in America.
And China will do its part by bringing American heavy industry back to life.
Remember, the SDR composition of the Renminbi is going to be massive. What we need to remember is who is handing us the marbles in the first place. – JC http://philosophyofmetrics.com/2014/05/07/u-s-treasury-renminbi-bonds/ |
