The Barbarians at the Gate
December 10, 2014
By JC Collins
The amnesty issue and immigration reform are symptomatic of the larger implosion of American culture and the transition away from micro empire to macro empire. In order to fully understand the scale and scope of what is transpiring on the socioeconomic and geopolitical spheres one must gain a deeper understanding of how the current situation and dynamics have been engineered and orchestrated.
All empires have been built around monetary policies and they crash alongside the corruption of those policies. In regards to the current state of world affairs, the transition away from one economic framework to the emergence of another represents the larger transformation of empire which is taking place in the world today.
The characteristics of the international monetary system since the early 1970’s can be defined as desperate attempts at maintaining the USD’s valuation. Whether contrived as an act of socioeconomic engineering or a reactionary position is somewhat irrelevant as the world now stands on the steep slope of transition away from a dollar centralized system.
The imbalances in the international monetary system have been used to leverage this transition towards a multilateral system where emerging markets, such as the BRICS countries, have more control and leverage over the metrics which determine whether there are economic balances or imbalances.
From the creation of the Bretton Woods system in 1944, through to its eventually fragmentation in the early 1970’s, the international financial system was configured around the parity of fixed exchanged rates. Foreign reserves acted as a last line of defense against attempts to shift the system away from the fixed exchange rate regime, as well as being the main source of international liquidity.
These “reserves” had the ability to be supplemented by resources from the International Monetary Fund through foreign exchange swap lines to counter speculation against fixed exchange parities. But still, the USD continued to be used as the main source of international liquidity, and was accumulated in vast amounts in the foreign reserve accounts of central banks around the world.
The point that world liquidity was connected to US balance of payments deficits meant that as economic growth expanded and once marginal reserve requirements increased dramatically the system became inherently dysfunctional. The world was faced with two choices, an inadequate supply of global liquidity, or continue to expand the USD in foreign reserve accounts around the world.
The latter was the preferred method of restructuring the Bretton Woods agreement as the USD removed its peg to gold in 1971 and the creation of what we call the “petro-dollar” was established in 1973.
OPEC was started in September of 1960, which was around the time frame when the first deficiencies in the US balance of payments as a source of global liquidity were first openly acknowledged. Throughout the 1960’s the oil producing countries around the world were brought into the dollar system and the energy alternative to the semi gold standard began.
Since 1973 there has been wanton desperation in the actions of central banks and the international institutions to maintain the dollars valuations as to prolong the balance of payments system. The financial crisis of 2008 was the just one event in a series of events which foretold of the coming liquidity crisis. The imbalances in the system caused by accumulating the USD in the foreign reserves accounts around the world are now beginning to manifest across the broader macro environment.
The most obvious solution to this dysfunction is to displace the USD in the foreign reserve accounts with a supplemental reserve currency such as the Special Drawing Right of the IMF. But like before, these IMF resources, the SDR, work best when there is parity as found in the fixed exchange rate structure which existed before the fragmentation of Bretton Woods in the early 1970’s.
The SDR would allow for the continued expansion of global growth and reserves without the dysfunction associated with the USD balance of payments system. These SDR’s can be distributed, or allocated, to members based on the quota amounts defined for each. In essence, the SDR can displace the USD as the global reserve asset without the imbalances found in a system centralized around one specific country and currency.
This is where the importance of the 2010 IMF Quota and Governance Reforms are brought to the forefront of international macroeconomics and geopolitical positioning. The reforms are meant to redefine the quota amounts of the emerging market countries, such as the BRICS countries, and more specifically China. With an increase in its quota amount, the People’s Bank of China will strengthen its position in the multilateral financial system and the broad and fast internationalization of the renminbi (RMB) will ensure its inclusion into the SDR basket of currencies by next July.
It is even likely that the SDR liquidity scenario may not even get traction without the RMB and broader reforms to the IMF governance and quota system. As such, we have watched for 4 years now as the reforms have languished in the American Congress without being implemented as required by the agreements made between the G20 countries in 2010.
This week Congress should be passing the spending bill which will fund the government for another year. There has been talk of having the IMF Reforms once again presented for vote as an attachment to the spending bill. If it isn’t, there will be the full implementation of Plan B which includes the removal of the US veto on the Executive Board and a larger quota adjustment for the emerging markets.
Reform to IMF governance and quota amounts are happening whether America agrees or not, with Plan B being the worst possible outcome.
One specific analysis can determine that the US delay is being orchestrated by China through political campaign funding directed towards the Republicans. China would benefit from delaying the full implementation of the Reforms so it has more time to strengthen its position and internationalize the RMB for inclusion into the SDR basket.
See post The Tail of the Dragon – How and Why China Delayed IMF Reforms Through Republican Party Donations
A second analysis could also suggest that the delay is orchestrated by Republican industrial interests for the purpose of weakening or outright preventing Russia from having a seat at the table. Russia has made its intentions known that it has been seeking to have the ruble included in the SDR basket along with the RMB.
In addition, the quota amounts for the Russian Federation would also be higher with the implementation of the 2010 Reforms as written, but could also be extremely larger if Plan B is utilized. With the control that Russia exerts over the European natural gas market, it is problematic for the American interests to allow the EU, and its quota allocations, to slide into the BRICS, and Russian economic influence.
The battle for Ukraine and the battle for Syria are both about the alliance between Europe and North America. Both are existing and potential pipeline routes for natural gas into Europe. The one in Ukraine is controlled by Russia and the one in Syria is slowly transitioning towards western control, with the help of ISIS and Israeli bombing campaigns.
For its part, Russia is playing a patient game and waiting for the inevitable time frame of IMF Reforms to be implemented. Whether through the 2010 Reforms as they were originally written, or through the implementation of Plan B, Russia is very aware that any overt provocation or reaction on its part would instantly be branded as the pretext for excluding the ruble from the SDR basket and lessening the Russian quota amount in the Fund.
Either analysis can be equally considered and the potential merging of both is also likely probable. The US Congress delays the reforms long enough to spoil Russian chances for an increased influence in the multilateral system and China plays both sides knowing that it will be the winner in the end because of the growing usage of the RMB and the Plan B structure.
America, trapped by the amount of USD held in the foreign reserve account of China, is willing to play ball with the PBoC, but cannot accept the full and balanced inclusion of both Russia and China into the multilateral financial system. With Russia on the doorstep of Europe the decision was fairly easy from an economic and geopolitical perspective.
The mandates from the Bank for International Settlements have trickled down to the central banks of the world and it has been made clear that USD liquidity based on the balance of payments system is coming to an end. Many times I have described how deflation and a broadening liquidity crisis would be used to herald in the multilateral financial system. Some of my earlier posts at the beginning of the year explained how methods of Hegelian Dialectic would be used to force the acceptance of the supra-sovereign system.
We have now been watching these methods, as presented in the form of civil unrest and protests, spread across the world and now back to the shores of America where the biggest transformation has to take place.
See post The Implosion of American Culture.
We have previously discussed how there would be massive fluctuations in the exchange rate markets in the days and weeks leading up to the transition. We are now seeing this in the dramatic swings in the currencies of the emerging economies, especially in Russia.
We have discussed the End of OPEC and the forthcoming SDR Commodities Exchange. And now with the recent drops in the valuation of energy we are beginning to hear the rumblings about the viability and relevancy of OPEC as an institution. Back on April 21, 2014, in the post The Greatest Game, I made the following statement, in response to a readers question about the price of oil:
“Looking at oil, we can assume that the price will be around $75.00 per barrel (really anywhere from $60.00 to $80.00)”
At that time crude oil was in the $104.00 range and the thought of -$80.00 or -$70.00 oil was unthinkable. And yet, here we are 8 months later and the price of oil is $63.00, the lower end of my spectrum at the time. It can be assumed that oil will eventually settle in the $75.00 range as stated, where the economics are balanced.
Also in the post the Greatest Game we discussed the coming adjustments to the stock markets around the world. Some of the headlines from just the last few days confirm the deepening deflation and liquidity crisis as well as the stock market adjustments that many have been anticipating.
Canadian stock market drops 500 points before recovering at a +300 loss.
Vietnam stocks drop amid oil price instability.
Greek stocks crash 13%, the single biggest drop since 1987. And of course the Greek protests return.
China stocks drop.
Japan stocks and bonds drop.
Baltic Dry Index drops below 1000.
BIS publishes a warning on liquidity.
Civil unrest continues to grow across the globe.
Venezuelan bonds crash to 1998 levels.
And Zero Hedge has put together an excellent metrics based post titled Markets Turmoiled As 5th Hindenburg Looms.
So much instability and manipulation is now at play in the world markets that numbers are swinging wildly from losses and back to gains again. This instability is building and expanding the script that the USD balance of payments system needs to be replaced with a more centralized SDR liquidity process which will balance the international financial system.
The end of all empires are stricken with not only the debasement of currency, but also an obsession for sex, and the promotion and propagation of sports and entertainment. The barbarians at our gates is found in the immigration policies and the multicultural propaganda which spews forth from our governments and international institutions.
The fact that the amnesty issue is at the forefront of American politics as the USD system nears its end is very symbolic of the “barbarians at the gate’ historical script.
Yet, I don’t see this as the end of an empire but the beginning of the world empire, as discussed in the post The Rise of the World Empire. The internationalization of America’s “empire culture” has ensured a continuation of the obsession with sex and the entrancement with reality television, as well as the multilateral sport of mixed martial arts, the Roman colosseum of today.
What the rest of the world doesn’t want will implode with the USD system.
The attempts at maintaining the valuation of the USD are coming to an end. The SDR replacement is simply a continuation of the fiat and fractional system of debt based money creation. America was never meant to be the apex, only a transition point to the multilateral. – JC
http://philosophyofmetrics.com/2014/12/10/the-barbarians-at-the-gate/#more-1829
Today at 5:11 pm by Rocky
» Sudanese advisor criticizes Kuwaiti analyzes regarding the development road project
Today at 2:21 pm by Rocky
» Al-Mandalawi stresses the need to strengthen economic and trade cooperation between Iraq and Poland
Today at 2:04 pm by Rocky
» Power maneuvers: America provides defensive weapons to Kurdistan in exchange for withholding from Ba
Today at 10:26 am by Rocky
» Kuwait is drilling an oil well near Umm Qasr, towards Iraqi territory
Today at 10:24 am by Rocky
» In the document... the first Iraqi ministry identifies the obstacles to changing the new official wo
Today at 10:22 am by Rocky
» Italian Institute: Iraq is stuck in its own crises, including Baghdad’s efforts to undermine the “au
Today at 10:21 am by Rocky
» The head of the Integrity Commission announces the holding of an international Interpol conference i
Today at 10:18 am by Rocky
» Planning: Iraqi companies are not efficient in conducting the population census
Today at 10:14 am by Rocky
» utube MM&C 4/24/24 Support - USA- Turkey - Timing- Currency Value - Tabled
Today at 8:08 am by Rocky
» MM&C 4/25/24 National Bank of Iraq goes live with Temenos core banking and payments
Today at 8:06 am by Rocky
» A banking official indicates a "danger" to Iraq by depriving more than half of its banks of dollars
Today at 7:55 am by Rocky
» With the participation of the Association of Private Banks, investment opportunities are on the tabl
Today at 7:45 am by Rocky
» Within a month... an Iranian border crossing recorded a noticeable increase in exports of goods to I
Today at 7:44 am by Rocky
» The Association of Private Banks appreciates the efforts of the government and the Central Bank to c
Today at 7:43 am by Rocky
» Al-Maliki's coalition presents a third candidate for the position of governor of Diyala
Today at 6:57 am by Rocky
» Arab gathering: The Kirkuk problem is getting complicated and the Sudanese must intervene
Today at 6:56 am by Rocky
» Next week.. a Kurdish delegation will visit Baghdad to meet with the Minister of Finance
Today at 6:54 am by Rocky
» Under the pretext of salaries... Al-Party refrains from handing over port revenues to Baghdad
Today at 6:53 am by Rocky
» Association of Banks: For the first time, we are witnessing a clear targeting of depriving half of t
Today at 6:51 am by Rocky
» Parliament does not know the reason for the delay in sending the 2024 budget schedules: Voting takes
Today at 6:49 am by Rocky
» Applicants for the 2024 Hajj are demanding that the Central Bank secure the dollar for them through
Today at 5:09 am by Rocky
» Governmental and private banks will showcase their services tomorrow during Financial Inclusion Week
Today at 5:08 am by Rocky
» Iraq's oil exports rise despite OPEC+ cuts
Today at 5:06 am by Rocky
» A study explodes a "surprise"... Iraq is among the countries that export oil to "Israel": How is the
Today at 5:04 am by Rocky
» Al-Araji emphasizes working to strengthen national identity
Today at 5:02 am by Rocky
» Al-Sudani visits Saudi Arabia to participate in the World Economic Forum in Riyadh
Today at 5:01 am by Rocky
» Iraq is talking about producing one million additional liters of gasoline
Today at 4:59 am by Rocky
» The Council of Ministers approves the implementation of the Baghdad Metro project
Today at 4:56 am by Rocky
» Minister of Commerce: We formed a joint economic committee with Türkiye
Today at 4:55 am by Rocky
» Resources: Government measures have contributed to improving the water situation in Iraq
Today at 4:53 am by Rocky
» Parliamentary Finance: Baghdad will continue to send salaries to the region’s employees until settle
Today at 4:51 am by Rocky
» A parliamentarian describes the corruption of Iraqi ports as “ghouls” and reveals the involvement of
Today at 4:49 am by Rocky
» Obelisk Hour: Basra is the subject of political conflict and ambiguity over the fate of the funds al
Today at 4:48 am by Rocky
» Turkmen leader: An agreement on the local government of Kirkuk is near
Today at 4:45 am by Rocky
» Anbar calls for the operation of its factories despite financial obstacles
Today at 4:44 am by Rocky
» Turki: The crisis of the Presidency of Parliament prompted the Sunnis to amend the Council’s interna
Today at 4:43 am by Rocky
» The Agriculture Committee confirms the existence of Iraqi-Turkish-Iranian discussions on water
Today at 4:42 am by Rocky
» Resources diagnose the challenges facing the water file in Iraq
Today at 4:38 am by Rocky
» Parliament pledges to the Interior Ministry: We will transfer money to buy weapons from citizens
Today at 4:33 am by Rocky
» Al-Issawi is the closest.. Parliament sets the date for deciding the choice of the new president
Today at 4:31 am by Rocky
» Deputy: Iraq's investments have risen and need a comprehensive review of previous years
Today at 4:30 am by Rocky
» Iraqis consume 7 billion eggs annually and import about $900 million
Today at 4:28 am by Rocky
» The Iranian role complicates attempts at open cooperation between Iraq and Turkey. Turkey is trying
Today at 4:26 am by Rocky
» Move in Iran to obtain $242 billion from Iraq in compensation for the eight-year war
Today at 4:25 am by Rocky
» 12 decisions from the Council of Ministers regarding the Baghdad Metro and Najaf-Karbala train proje
Today at 4:23 am by Rocky
» Sudanese Advisor: The path to development has begun... the Baka and the militias “we silence them wi
Today at 4:21 am by Rocky
» Not from Kurdistan.. How did Iraq become a source of oil for “Israeli tanks”?
Today at 4:19 am by Rocky
» Parliamentary Agriculture criticizes the Sudanese and Erdogan agreement: Türkiye will control water
Today at 4:16 am by Rocky
» The Iraqi government issues new decisions
Yesterday at 2:35 pm by Rocky
» The story of “reduced oil” to Jordan, from “compulsion” to mutual benefit.. Is there a loss?
Yesterday at 2:33 pm by Rocky
» The Council of Ministers takes 12 decisions for the Baghdad Metro and the Najaf-Karbala train
Yesterday at 2:32 pm by Rocky
» utube MM&C 4/23/24 Iraqi Dinar - IQD Update - Development Road Project - Saviour of Global Banking
Yesterday at 10:18 am by Rocky
» Kidney from pig transplanted into deathly ill New Jersey woman — and begins working almost immediat
Yesterday at 10:15 am by Bama Diva
» The most difficult option.. Warnings of the danger of floating the Iraqi dinar without achieving an
Yesterday at 9:48 am by Rocky
» Trade from the “Economic Committee” with Türkiye: It will overcome all obstacles facing the traders
Yesterday at 9:46 am by Rocky
» Washington's hope for stable relations with Baghdad clashes with Iraqi parties' rejection of the Ame
Yesterday at 9:41 am by Rocky
» Karim Badr: Development is America’s will to kill silk
Yesterday at 9:36 am by Rocky
» Oil: Opening of a new port for liquid gas for vehicles in Baghdad
Yesterday at 9:33 am by Rocky
» A media advisor warns of corruption in a draft law on the Parliament’s agenda
Yesterday at 9:21 am by Rocky
» Economist: There is serious work to lift US sanctions on Iraqi banks
Yesterday at 9:16 am by Rocky
» Will the agreements signed with the US Treasury reflect positively on the exchange rates?
Yesterday at 7:52 am by Rocky
» Iraq continues its quest to join the World Trade Organization
Yesterday at 7:51 am by Rocky
» Iraq completes the completion of the files for the initial offer of goods and services to join the W
Yesterday at 7:50 am by Rocky
» Economist: Travelers' dollars are leaking into the parallel market...and this is what the Central Ba
Yesterday at 7:32 am by Rocky
» President of the Federal Court: It is not permissible to force anyone to join any party, and the pol
Yesterday at 7:30 am by Rocky
» The Council of Ministers holds its session headed by Al-Sudani
Yesterday at 7:27 am by Rocky
» America weakens Baghdad...and increases Kurdistan's military capabilities
Yesterday at 7:26 am by Rocky
» The Iraqi government plans to build 10,000 schools throughout the country
Yesterday at 7:23 am by Rocky
» American threats close the Iraqi Stock Exchange at a loss
Yesterday at 7:21 am by Rocky
» Increase in external transfers at the Central Bank
Yesterday at 7:20 am by Rocky
» Al-Maliki calls on Britain to cancel restrictions on the entry of its companies into Iraq
Yesterday at 7:18 am by Rocky
» Planning and the European Union are discussing signing a number of agreements in the development, en
Yesterday at 7:16 am by Rocky
» Parliament talks about the mechanism for recovering smuggled funds and hints at the next stage
Yesterday at 7:13 am by Rocky
» Interior Ministry: The number of completed national cards reached 37 million cards
Yesterday at 7:06 am by Rocky
» Amnesty International: Violations of freedom and human rights continue in Iraq and the Kurdistan Reg
Yesterday at 7:04 am by Rocky
» Parliamentary Oil: The government is proceeding with the decision to raise the price of improved gas
Yesterday at 7:03 am by Rocky
» A parliamentary committee in Basra to investigate violations of the port company and the local gover
Yesterday at 7:00 am by Rocky
» Revealing the 10 most important American exports to Iraq
Yesterday at 5:31 am by Rocky
» A noticeable increase in the rate of Iraq's import of Chinese cooling devices
Yesterday at 5:30 am by Rocky
» Prime Minister: Working on projects without completing the infrastructure is a waste of money
Yesterday at 5:28 am by Rocky
» Iraq.. Extending the deadline for registration procedures on plots of land
Yesterday at 5:27 am by Rocky
» What is the main purpose of conducting the population census in Iraq?
Yesterday at 5:25 am by Rocky
» A plan to transform Iraq from a barren land to green with 5 million trees
Yesterday at 5:24 am by Rocky
» The Housing Fund announces the acceptance of more than 11 thousand loans through the Ur platform
Yesterday at 5:23 am by Rocky
» The Bank of Baghdad is moving to increase its capital to 400 billion dinars
Yesterday at 5:20 am by Rocky
» The electronic payment system will soon be adopted on Iraqi buses
Yesterday at 5:19 am by Rocky
» “It threatens our interests and destroys our economy.” An Iraqi project “irritates” the Kuwaiti stre
Yesterday at 5:18 am by Rocky
» Warning from the Central Bank about “misuse of electronic payment cards”
Yesterday at 5:17 am by Rocky
» Iraq and the Sultanate of Oman are discussing sending capacities through the Gulf countries
Yesterday at 5:16 am by Rocky
» The fact that a decision was issued to deport Syrian workers from Iraq
Yesterday at 5:14 am by Rocky
» Rice comes first... America exports 10 foodstuffs worth more than 350 million dollars to Iraq
Yesterday at 5:14 am by Rocky
» A sixth licensing round for gas exploration
Yesterday at 5:12 am by Rocky
» Baghdad is preparing to host the 50th session of the Arab Labor Conference
Yesterday at 5:11 am by Rocky
» Scientific symposium on the future vision of the tripartite budget
Yesterday at 5:09 am by Rocky
» Five conversion power stations enter service in Najaf
Yesterday at 5:08 am by Rocky
» Planning: Conduct a population census next November
Yesterday at 5:07 am by Rocky
» Experts: Spreading misleading information harms development and investment
Yesterday at 5:03 am by Rocky
» Economists call for tightening money laundering laws and port controls
Yesterday at 5:02 am by Rocky