Switzerland China Currency Swap Through Their Central Banks

Editor's Note

The Chinese keep expanding the use of mutual currency swaps to do an end run around the U.S. Dollar.  Now Switzerland China currency swap is added to the growing list.

Here's the countries I have found, prior to the Swiss, that have entered into the currency swap arrangements with China since 2008:

  • ​Pakistan
  • Argentina
  • South Korea
  • Indonesia
  • New Zealand
  • Malaysia
  • Belarus
  • Hong Kong
  • Japan
  • Uzbekistan
  • Thailand
  • Turkey
  • Singapore
  • Kazathstan
  • Chile
  • India
  • Brazil
  • United Kingdom
  • France
  • South Africa
  • Germany
  • Nigeria
  • United Arab Emirates (UAE)
  • Australia
  • Iran
  • Russa
  • Switzerland
  • Mongolia
  • Iceland
  • Hungary

This list may not have all the countries agreeing to go outside the dollar and do currency swaps with China.  (I DID NOT DO A SEARCH ON EACH INDIVIDUAL COUNTRY AND THEIR CURRENCIES.)  But the currency swaps are expanding to the Central Banks to include the ECB (European Central Bank) to now the Swiss Central Bank.  The Swiss are a major player in world banking and finance.

And let's not forget, whether our national and international policies are right or wrong, this year we have alienated more countries, such as Russia and France (especially with the sanctions) ​to move away from the US Dollar.

Truthfully if this present trend continues and we have more international issues, without some real solutions to our monetary policy issues, you have to ask yourself:  Will the US Dollar still be the world's reserve currency by the end of 2015?​

Why does it matter whether the US Dollar is the world's reserve currency?  Can't we just use the US Dollar at home? 

Yes, you can use the US Dollar at home.  We spend trillions in international trade and are highly dependent on it.  In fact 20% of your food supply is IMPORTED.  We have been exporting our manufacturing base since George Bush Sr. 41 was president.  Since we have been exporting our manufacturing base we are dependent on IMPORTS for our economy and individual use

Can you now see that we will experience our modern Weimar Republic (Germany post WWi), an onslaught of meteoric rise of inflation in major economic sectors of our economy,  once other countries loose faith in the US Dollar as the trading instrument?

I encourage everyone to keep following the currency swaps on their own.  The media seems to focus only on the BRICS countries, but they are just a fraction of what is going on. Follow the trend.​

Be on your toes so your dollars, income and savings can go farther!

Swiss, Chinese Central Banks Enter Currency Swap Agreement

By Dow Jones Business News, July 21, 2014, 04:12:00 AM EDT

By Neil MacLucas and Richard Silk

ZURICH--The Swiss National Bank and the People's Bank of China reached a currency swap agreement on Monday, allowing the two central banks to buy and sell their currencies up to a limit of 150 billion renminbi, or 21 billion Swiss francs ($23.4 billion).

The deal will also allow the Swiss central bank to invest some of its huge accumulation of foreign exchange reserves in the Chinese bond market, the SNB said in a statement Monday.

The Zurich-based SNB said the agreement will further strengthen collaboration between it and its Chinese counterpart and is a "key requisite for the development of a renminbi market in Switzerland." It could also facilitate trade and investment between the two countries, the PBOC said.

Switzerland is the latest of a series of countries to set up swap lines with China, which is keen to promote the international use of the yuan.

Last year China signed swap agreements with the European Central Bank and a clutch of others, including the U.K., Brazil and Indonesia.

The agreement between China and Switzerland has a term of three years and can be renewed thereafter, the PBOC said.

Write to Neil MacLucas at neil.maclucas@wsj.com and Richard Silk at richard.silk@dowjones.com


Read more: http://www.nasdaq.com/article/swiss-chinese-central-banks-enter-currency-swap-agreement-20140721-00068#ixzz38JjLmYOq

Our Deteriorating Economic Outlook: Serious Inflation On the Horizon

Editor's Note

​Have you noticed that prices seem to be rising faster than the official inflation numbers?

Independent of increasing prices, with food price increases are hidden two additional ways:  (1) reducing quantity or weight yet offering it with a similar price; and (2) reformulating the ingredients of a processed food with cheaper, and often unhealthier ingredients.

Please read and pay attention to this article by Dr Paul Craig Roberts, Guest Columnist, with Dave Kranzler and John Williams of www. shadowstats.com​.

The Deteriorating Economic Outlook

By Paul Craig Roberts, Guest Columnist (former Assistant Secretary of the U.S. Treasury), Dave Kranzler (www.investmentresearchdynamics.com) and John Williams (www.shadowstats.com)

July 8, 2014​

The third and final estimate (until the annual GDP revisions) of first quarter 2014 real GDP growth released June 25 by the US Bureau of Economic Analysis was a 2.9% contraction in GDP growth, a 5.5 percentage point difference from the January forecast of 2.6% growth. Apparently, the first quarter contraction was dismissed by those speculating in equities as weather related, as stock averages rose with the bad news.

Stock market participants might be in for a second quarter surprise. The result of many years of changes made to the official inflation measures is a substantially understated inflation rate. John Williams (www.shadowstats.com) provides inflation estimates based on previous official methodology when the Consumer Price Index still represented the cost of a constant standard of living. The 1.26% inflation measure used to deflate first quarter nominal GDP is unrealistic, as Americans who make purchases are aware.

A reasonable correction to the understated deflator gives a much higher first quarter contraction. The two main causes of inflation’s understatement are the substitution principle introduced during the Clinton regime and the hedonic adjustments ongoing since the 1980s that redefine price rises as quality improvements. Correcting for excessive hedonic adjustments gives a first quarter real GDP contraction of 5%. Correcting for hedonic and substitution adjustments gives a first quarter real GDP contraction of 8.5%.

Realistic economic analysis is a rarity. The financial press echoes Wall Street, and Wall Street economists are paid to help sell financial instruments. Gloomy analysis is frowned upon. Even negative quarters are given a positive spin.

Years of understatement of inflation has resulted in years of overstatement of GDP growth. Thinking about the many years of misstatement, we realized that the typical computation in nominal terms of the ratio of debt to GDP is seriously misleading.

Consider that debt is issued in nominal terms and repaid in nominal terms (except for a few Treasury bonds with inflation adjustments). However, nominal wealth or nominal GDP overstates real economic strength. The debt is growing, but both the nominal and real values of the output of goods and services are not keeping up with the rise in debt.

To understand how risky the rise of debt is, nominal debt must be compared to real GDP. Spin masters might dismiss this computation as comparing apples to oranges, but such a charge constitutes denial that the ratio of nominal debt to nominal GDP understates the wealth dilution caused by the government’s ability to issue and repay debt in nominal dollars. We know that inflation favors debtors, because debts can be repaid in inflated dollars.

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Read More...Click Here


Why is Head of the IMF Talking About Numerology and World Economy?

The IMF and Numerology:  What Gives Here?

Have you seen this you tube video regarding a speech Christine Legarde, head of the IMF,  did on the world economy earlier this year?  You can see the video by clicking this link.

Why would a leader of a major organization give such a bizarre speech?

She should be talking about balance sheets, economic growth, not engaging the audience in a lesson of numerology.

Here is an interview by Greg Hunter of WatchdogUSA.com with Steve Quayle discussing this interview.

I don’t think though that you need a lesson on numerology to know that the dollar is on life support awaiting for the plug to be pulled out of the wall.

Nor do we need numerology that the economy is shrinking, not growing.

Do your research.  Look at the numbers, the economic and political issues.  Can you really rely on the government to solve the problem?  Or do we have to start focusing on doing the best for our home, start rebuilding our neighborhoods and communities from the ground up?

Economic Health: Gold is Probably Gone, Real Inflation Understated, Recession is Coming

Economic Health: Gold is Probably Gone, Real Inflation Understated, Recession is Coming

Is the death of the dollar a "when" instead of an "if"?I encourage you to listen to Dr. Roberts interview with King World News.  The economy is much worse shape than policy makers are indicating.  Many of the figures are overstated or understated our economic health, depending on the outcome desired.

If a private citizen or business did what the government is doing, would we be sued or at worse in jail?

Is your assets in paper only, whether certificates, stocks, money, etc.?  Do you have possession of those paper assets?  Or can you physically touch your assets?

In law we have a rule:  Possession is 9/10’s of ownership.  You can “own” something but if someone else has physical possession and a dispute erupts, then how are you going to get it?  This is what causes many lawsuits, trying to get possession of things that people claim they owed but are being denied ownership rights.  Many times while the litigation is ongoing the value of the property dissipates.

Listen to Dr. Roberts’s brief interview about the nation’s economic health by clicking 6-28-2014 Roberts interview.

Deceptive Data: How Can We Rely On Government Figures?

Deceptive Data:  How Can We Rely On Government Figures?

The federal government collection of economic data should be objective and reliable.  It is not supposed to be deceptive data or misleading figures.   For example, in collecting the Census information, do you want them to report exactly how many people are residing in the US?  Or do you want them to lower the number of figures (if one is concerned about overpopulation) or increase the figures in a state so that particular state can argue they are entitled to another U.S. Congressional seat at the expense of another state?

Just like when you hire an accountant do you want that accountant to report the numbers accurately or fudge the numbers and get you in a lawsuit, or worse, a tax audit?

When we go to the grocery store and see the size of packages shrinking, the price of products going up and cheaper products being substituted, we know instinctly that the government monthly and yearly figures on food inflation just does not jive.

But what if those figures, although we know instinctly they are wrong, greatly distort the level of inflation?  What if the economic situation is much more serious than even our gut instincts tell us?  Although that may be really bad news and we don’t want to hear it, is it better that we know so we can make more prudent decisions?  Or is it better to ignore it and have deep regrets later when we could have mitigated our losses?

As a former litigator I can tell you when there is smoke, and someone is trying to significantly distort or hide the truth, there is usually a forest fire lurking around the corner.  After all, if things were not really bad, what is the motivation to mislead?

Please carefully read the next article.  Distortions like this just do not go on unless things are very ill internally.

Some may argue that the government may not want to upset or alarm you and they think they can resolve things before it gets out of hand.  This is akin to a spouse, taking money from the joint account without telling you, spending it foolishly but thinking that they can put the money back in the account before the other spouse discovers it.  If you’re the spouse not “dipping in the kitty” do you want to know what’s happening before all the money is gone or do you want to first learn about it when all the money has vanished or the well is dry?  (I can hear it now:  Honey, I really needed the money.  You have too many pressures on you.  I did not want to add any more.  I thought I could handle this….Yeah, sure!)

What’s different about a domestic “breach of fiduciary duty” and the government in this situation?  Feel free to share your thoughts.

 Stone Cold Proof That the Government Economic Numbers Are Being Highly Manipulated

By Michael Snyder of the Economic Collapse Blog

Detective - Public DomainHow in the world does the government expect us to trust the economic numbers that they give us anymore?  For a long time, many have suspected that they were being manipulated, and as you will see below we now have stone cold proof that this is indeed the case.  But first, let’s talk about the revised GDP number for the first quarter of 2014 that was just released.  Initially, they told us that the U.S. economy only shrank by 0.1 percent in Q1.  Then that was revised down to a 1.0 percent contraction, and now we are being informed that the economy actually contracted by a whopping 2.9 percent during the first quarter.  So what are we actually supposed to believe?  Sometimes I almost get the feeling that government bureaucrats are just throwing darts at a dartboard in order to get these numbers.  Of course that is not actually true, but how do we know that we can actually trust the numbers that they give to us?

Over at shadowstats.com, John Williams publishes alternative economic statistics that he believes are much more realistic than the government numbers.  According to his figures, the U.S. economy has actually been continually contracting since 2005.  That would mean that we have been in a recession for the last nine years.

Read More Here….

The Walmart National Internet Sales Tax-Stop It While You Can

The Walmart Internet Sales Tax Has Passed the Senate-Stop It While You Can

It looks like the Walmart Internet Sales Tax is on its way.

It’s primary promoter is Walmart.  It comes from a struggle of Walmart worrying about the growth of Amazon and other internet sales sites.  Yet Walmart also sells on the internet.  Walmart online can’t compete against Amazon because it has serious baggage.

Understand that many U.S. businesses will lose business because some sales taxes are high, greater than 8%.  In a struggling economy there will be consumers that won’t buy online if they have to pay 8% more.

Where Walmart is narrow and incorrectly focused is that consumers will start buying more from Chinese businesses and other foreign businesses to save that 8%.  If you don’t believe me, go to Ebay and look at the massive number of Chinese businesses online.  EBay buyers will be comfortable purchasing from Chinese businesses because of Paypal guarantees, eBay enforcement on transactions, etc.

Do you think their might be some hypocrisy here considering that a good portion of the Walmart merchandise comes from Chinese companies?  They can import much cheaper goods (in essence costing American jobs), thus getting a double benefit while the consumer pays more taxes. How much tax revenue has federal state and local governments lost because of Walmart buying overseas goods from workers’ loss of jobs?  Where’s the outcry of Walmart about that? 

I urge consumers if they don’t like the Walmart  Internet Sales Tax, which is what the law should be named, that you boycott buying from Walmart.  Things that you buy from Walmart now you can buy online, without the long lines, hassles and decreased customer service.  If you think what they’ve done is motivated by anti-competitive trade practices, then should you indirectly endorse that conduct by buying from them?  If enough of us move our business elsewhere, even if we can’t keep this legislation from becoming law, we can show Walmart that there are consequences when they overstep fair competition.

The cry about states losing sales tax is really an unjust argument.  Why?  Because many businesses that have no nexus (or physical location) to a state will be forced to collect city, county and local taxes at considerable costs to them.  Are the states going to pay them for their labor and time collecting taxes for them, in essence being a de facto tax collector?  No.  What about the costs to purchase the software to do this?  Are they going to get this software for free?  No.

It is the responsibility of the taxing authorities to collect their own taxes.  Many staes have already worked out agreements with the big internet sellers.  And if they can’t effectively collect their taxes, then maybe they have to reorganize their revenue generating methods.

If you disagree with the “Walmart Internet Sales Tax” I strongly encourage you to let the phones ring off the hook to your Congressmen.  Create Internet petitions.  Write letters and be very vocal.  The House of Representatives is the only hope of derailing the Walmart Internet Sales Tax as President Obama supports is new tax.  This means President Obama will likely sign any version submitted to him.

If you disagree with the “Walmart Internet Sales Tax” then I strongly encourage you use the same means of communication about your objections that you gave to Congress to give Walmart.

Walmart, or any other multi-national corporation, should not have that much influence over our legislative process.  Legally the corporation counts as 1 person, not as 328 million+ citizens.

Think about it!—No  Name attorney

 

Senate Passes Wal-Mart Backed Bill for Taxes on Web Sales

By Richard Rubin, Bloomberg News

The U.S. Senate voted to let states require out-of-state Internet retailers and catalog companies to collect sales taxes, a victory for brick-and-mortar businesses that have been lobbying on the proposal for more than a decade.

The measure now goes to the U.S. House, where the issue is dividing Republicans and won’t receive a quick vote.

Senate Passage of Online Sales Levy Imperils Tax-Free Shopping

David Paul Morris/Bloomberg

The measure, supported by the Obama administration, attracted a coalition of backers including Best Buy Co., Amazon.com Inc. and shopping mall owners. Amazon, the largest Internet-based retailer, is expanding into more states to speed delivery, which means it will pay taxes anyway.

The measure, supported by the Obama administration, attracted a coalition of backers including Best Buy Co., Amazon.com Inc. and shopping mall owners. Amazon, the largest Internet-based retailer, is expanding into more states to speed delivery, which means it will pay taxes anyway.

The Senate measure, passed yesterday on a 69-27 bipartisan vote, would end the era of tax-free Internet shopping. It is backed by Wal-Mart Stores Inc. (WMT) and other retailers that say it’s unfair that sellers only have to collect sales taxes on purchases made by residents of states where an Internet company has a physical presence.

“It’s a rare opportunity for us to have Republicans and Democrats together on the floor to support a bill that has the endorsement of business and labor and local officials all across the United States,” said Senator Richard Durbin of Illinois, the chamber’s second-ranking Democrat and a co-sponsor of the proposal.

Read More…