Meet the new reserve currency… not the same as the old one

This week’s confab between China and the UK may have been as big a sea change as Saudi Arabia’s shift towards Russia, where both events spell an acceleration to the end of U.S. and dollar hegemony.
On Oct. 23, the UK announced in a joint statement with China that the Far Eastern currency is ready to be included in the IMF’s SDR basket, with this support coming less than a week after Britain issued the first ever Yuan denominated bond outside of China.  And thus begins the true push towards ending the dollar as the sole global reserve currency.

Britain supports the inclusion of Chinese yuan, into the International Monetary Fund’s (IMF) SDR basket subject to meeting existing criteria in the IMF’s upcoming review,said a China-Britain joint declaration issued here Thursday.

Both sides urge members who have yet to ratify the 2010 quota and governance reforms todo so without delay to further enhance the voice of emerging markets and developingcountries, said the document.

The joint statement was signed during Chinese President Xi Jinping’s state visit to Britain, the first of its kind for a Chinese head of state in a decade. – China Daily

Yet perhaps in a sense of perfect timing, the IMF themselves jumped on the bandwagon today, and just a few months after reporting that China would not be ready for inclusion until well into 2016, representatives of the global bank announced that China was nearly ready to be a part of the SDR, and it appears now that this decision could be just weeks away, rather than months.

chinadollar
chinadollar

International Monetary Fund representatives have told China that the yuan is likely to join the fund’s basket of reserve currencies soon, according to Chinese officials with knowledge of the matter, a move that may make more countries comfortable using the unit or including it in their foreign-exchange holdings.

The IMF has given Chinese officials strong signals in meetings that the yuan is likely to win inclusion in the current review of the Special Drawing Rights, the fund’s unit of account, said three people who asked not to be identified because the talks were private. Chinese officials are so confident of winning approval that they have begun preparing statements to celebrate the decision, according to two people.

The Washington-based lender is reviewing the composition of the basket, with staff members due to present their recommendation to the fund’s executive board for a vote as soon as next month as part of a process scheduled for every five years. The board rejected including the currency following the last review, in 2010, concluding that the yuan didn’t meet the test of being “freely usable.” – Bloomberg

Use of the Yuan in global trade has skyrocketed since 2013, and is increasingly poaching commerce away from the dollar as nations from around the world shift more towards direct bi-lateral trade, and away from the long-standing tradition of using the dollar as a middle man.  And since the last final item for the Yuan’s complete internationalization was achieved this week in Britain, it has removed all remaining excuses from tendering it in as a recognized reserve currency.

As OPEC appears to stand on the brink of ending the petro-dollar paradigm, and China is now ready to offer the world an alternative to the dollar and a single polar reserve currency, it should be no surprise that the U.S. is using war as a last ditch effort to hold onto their hegemony, with all nations who are tired of this aggressive foreign/monetary policy welcoming a new boss into the boardroom.

23 comments

  1. Looks like the British ready to align with the new winners sooner rather than later.By the way, that graphic is really a great find!

    It’s funny, I always thought the IMF was American dominated, funny to see them cave, or is the giraffe necked lady protecting her job by embracing China?

    1. She definitely wants to protect her job… after the AIIB was opened, she practically begged in a slew of press conferences how the IMF can ‘help’ the AIIB, when in fact, the AIIB can eventually replace the IMF completely.
      I believe the Chinese want to use the AIIB to force other countries to open swap lines and sell Yuan bonds… after that, who knows is the IMF is even needed with the infrastructures now in place in China, BRICS, Eurasia.

  2. Nicely done Ken. I will miss your articles. However, I note my ability to have a educated discussion with James on one of his recent articles was taken away (no further comments were accepted on rogue money). How do I unsubscribe from Rogue money?

  3. I hate to say it but Wolf Gray and I knew it was coming. But hats off to you Ken for being the first to report it. It makes perfect sense. “Friday Surprise”. It will be interesting to see what the markets will do when they get wind of it next week. I hope the guerilla talks about it tonight.

  4. Good read Ken. Short sweet and on point. It’s the best when you and the team Rogue think tank talk on the “V” show. You would hope the Great Brits would be proactive about the transfer of the global currency king. They have experienced it. Do you think they might even enjoy a little revenge as it was the dollar that sank the pound sterling?

    1. Thats a dichotomy if you think about it, since the War of 1812 made it so the Brits own our banking and legal system.
      This move towards China appears to be more about the Cabal masters and aristocracy signalling that the days of the US empire are nearly over.

    2. Usually America is seen as the extension of the British Empire according to researchers like Lyndon LaRouche, so I doubt the loss of the Sterling and weakening of the Imperial British Empire after the Suez incident concerned those higher than the government level like the Royal Family and City of London.
      It remains to be seen if the City of London bankers attempt to take over and subjugate Russia and China to make them the new British Empire after this ‘inclusion’ into the SDR. Once they are done ditching the United States like a used rag.

      Or maybe I am giving too much credit to the globalists to be smart and all powerful enough to pull this off when dealing with China, a country with over 5,000 years of cultural history, a very long memory of its subjugation and carving up by western powers and Japanese aggression, and eager to take back what it sees as its glory days during 13 century mariner Admiral Zheng He and his fleet of British-aircraft-carrier sized Treasure Ships.

  5. http://beforeitsnews.com/politics/2015/10/bix-weir-alert-china-sends-3-chinese-warships-to-florida-arriving-november-3rd-why-2751746.html
    Within this link is another one from zerohedge directly talking about this curious event.
    The main article is from a guy named Bix Weir, some of you may have heard of him. He’s trying to connect the dots here, about how this could happening at a time when there’s such tension between the two countries in the South China sea.

    Maybe someone here could connect those dots differently..

    1. Anyone who’s a Silver Bug like myself won’t be able to forget this guy and his insane $100,000/oz prediction for Silver with his most conservative at least $8,500/oz on his Road to Roota website.
      Reading the whole piece indicated that the US debt ceiling ‘expires’ on November 3rd and the visit starts on November 3rd and ends on November 7th. 2 Chinese guided missile ships and an oiler will be showing up at Florida.

      “Pressure is mounting as Treasury Secretary Jack Lew said earlier this week that Congress would need to raise the nation’s borrowing cap by November 3 to avoid a potential default.

      “If Congress fails to raise the nation’s debt ceiling by that date, the US could risk a first-ever default on its obligations”.

      Brett LoGiurato, writing in UK Business Insider, points out that as a resolution to the US debt ceiling is still unclear, “speculation has popped up once again about two popular theorized “work-arounds” — the 14th Amendment and the “trillion-dollar platinum coin.” ” – GoldCore.com

      Clearly the smell of desperation and weakness is in the air from the Keynesians that V tears a new one every time.

      Also for the sake of additional information from GoldCore’s Mark O’ Byrne:
      https://www.youtube.com/watch?v=ZKkc_EJlNOI&

      1. Frankly, anyone who doesnt believe the US govt was accumulating debt hand over fist since they ‘stopped’ even setting the debt ceiling back in January is a bit naive. They didnt vote on it 10 months ago and simply let the govt borrow without a limit.
        The Nov. 3 showdown is just a mirage in my opinion to push for a political agenda by Lew and Obama.

    1. LesPaul –
      I havent really been paying attention to Portugal… I feel they are more a trailing indicator of bigger picture problems within the EU, and for the most part is doomed or stagnant like Greece.

  6. Seems to me, based on the Economist magazines elite signals, after 11/5, financial panic begins. Possibly big hit starts on the dollar.

  7. With a debt crisis underway after 11/5, will they remember to address this by 12/31/15?
    http://www.alt-market.com/articles/2709-massive-railroad-shutdown-looms-in-2016

    I’ll bet they don’t…I’ll bet it won’t be an ‘oversight’, either. I’m starting to think the big orchestrated crisis in the states won’t be 2017, or 2020, but like, now.

    My own work says PM’s have bottomed now, for real, which implies dollar weakness against gold from here out. And here we are at a ‘crisis point’. Well, well…

  8. My favorite fantasy about the US govt debt: the federal government defaults and the Congress and Senate, EPA, NSA, FBI, CIA, Homeland “Security” and the rest are defunded. Closed. We start over.
    Everyone works for $50/week, public service honor.

Leave a Reply

Your email address will not be published. Required fields are marked *