Affichage des articles dont le libellé est international monetary system. Afficher tous les articles
Affichage des articles dont le libellé est international monetary system. Afficher tous les articles


Was gold really out between 1971 and 2015 ?

A short comment on Koos's last articles.

Firstly about the Western coup against gold in 1971 :

Dr. Kissinger said that one answer to the question asked this morning was this. When the basic proposition is approved will we be prepared to defend the dollar? His impression was yes and that this was the purpose of the new exchange parities. 
President Pompidou said he knew that the President expected him to speak frankly and he would do so. It was not so much for the French at the present time a question of the price of gold. There had been much talk about this. There was the Rueff theory that the price of gold should be doubled. This was not the question at present. For the present we should consider the general interest as between proponents of a liberal economy. That is, the Western World plus Japan.
President Pompidou said that we must not fear words. There was no question of the dollar becoming convertible into gold but if there is a consolidation of U. S. balances and the U.S. defends the dollar. Then the dollar is convertible from currency to currency. He understood the President’s reservation on an immediate statement but that is what it means or then there would be no real defense of the dollar. Dr. Kissinger said that we would have to buy dollars with other currencies in order to defend it. President Pompidou replied that this was correct. There was no other defense. Dr. Kissinger said that gold was out and President Pompidou said he understood this.
Excerpt from the minutes of the meeting between Pompidou, Kissinger and Nixon on December 13, 1971 at 4 PM, Azores.
Simply said, the post-Bretton Woods regime and the demise of gold in the International Monetary System was accepted only in the name of the defense of the Western World, that is, of bank owner's interests
It is significant that this ambition is not shared anymore between the Western leaders, or said differently: the official come-back of gold in the IMS will be at the same time a proof that the Western World's domination by its previous so-called elites does not exist any more, or at least is surrendering.

An secondly: 44 years after the Azores meeting, Xu Luode presents the SGE’s international ambitions in the Indian Bullion Bulletin, volume 5, issue 2, Feb. 2015, pp. 34-36. He is the chairman of the Shanghai Gold Exchange (SGE), Vice Chairman of China Gold Association, Vice Chairman of China Payment and Settlement Association, and the Executive Member of China Finance Society :
The International Board lends greater weight to the importance of Asian gold market on the international stage. China, India, Dubai and Singapore all enjoy vibrant trading scenes and comparative advantages; however, in the eyes of many investors, the influence wielded by the Asian markets is still very limited as a whole. Using the International Board as a launch pad, China’s gold market will embrace greater openness and foster stronger ties with its neighbors and, together, elevate the trading and pricing influence of Asia in the world’s gold market. 
[...] SGE and [US-based] CME have recently signed a Memorandum of Understanding with regards to future cooperation efforts. As a perennial major consumer of gold and a close neighbor of China, India will undoubtedly become one of SGE’s most important partners in the coming years. SGE looks forward to forming close partnerships with the Indian market. 
[...] Furthermore, the SGE will focus on enhancing its transit and leasing businesses, gradually roll out foreign currency-based collateral services and FX swaps, accept offshore funds from more varied sources for International Board transactions, further improve the financial services offered to international members and customers in regards to account opening and cross-border funds transfers.
The strategy for Shanghai Gold Exchange is very clear: to become the Global Exchange Center for monetary metals with affiliates, antennas (call them) in London, Tokyo, all Asia, BRICS main gold Exchanges (including NY with CME's MoU as a first step) in order to seek real market-based price synchronisation all over the world.

In short: between 1971 and 2015, gold was not really out of the IMS, Mr. Kissinger. It was simply pulled out from the West and it has flown to Asia. Now gold is ready to gradually emerge back as a basis of international monetary system.


Gold Bills reloaded: letters of credit

Pr. Fekete and the New Austrian School of Economy have for many years advocated an unadulterated gold standard, based on gold coins, gold bills, gold bonds and their respective clearing houses.

Gold bills are a form of letters of credit (or bills of exchange) with a maturity of 3 months, and which can be settled in gold coins (or bullions). 
Letters of credit are used since millenia. They were invented shortly after Cresus introduced the gold (or electrum) coins. Significantly, the oldest mentions of gold coins known in history are located in Anatolia (now part of Turkey) namely with Cresus and the river Pactole; and the oldest mention of letters of credit was written by Ciceron in 50 B.C. (in Epistulae ad familiares, book 3:5:4; here is one of the first translation from latin to old french, published 1542) about his travel in Laodicae, an important town in Cilicia (Anatolia). 

Letters of credit have since been used in many different countries, together with the expansion of international trade. They have been widely adopted into what Adam Smith has described as being "real bills", underscoring that he has not invented them but only described in a doctrine their universal use. Fekete has demonstrated the relevance of Real Bills doctrine for an unadulterated, modern and resilient gold-based monetary system, calling them Gold Bills.

I have anticipated the increasing use of Gold Bills in international trade, replacing US dollar, writing specifically that the experience of Turkish banks in the international trade of Iranian oil during international sanctions will be a relevant knowledge. 

Nowadays you can find on the largest Turkish bullion bank's web site a full range of banking services for using letters of credit in international trade :

A Letter of credit (L/C) is one of the payment types in foreign trade that provides the parties involved with more security. In other words, it is a conditional payment order issued by a bank upon the instruction of a buyer (applicant) in favor of a seller (beneficiary), via a foreign correspondent bank. Upon receipt of a letter of credit, the beneficiary realizes shipment of the stipulated goods and presents strictly complying documents to the correspondent bank and claims the credit amount. A letter of credit may be issued so that payment is to be effected against presentation of conforming documents (sight L/C), or at a certain maturity date (deferred payment L/C) or at the maturity of a bill of exchange accepted by either the issuing bank or the correspondent bank (acceptance L/C). In a letter of credit mechanism, a correspondent bank may assume the risk of the issuing bank, hence, that of the applicant which makes it a confirming bank.
Due to their reliability and internationally acceptability, letters of credit are widely used in import and export transaction.
Kuveyt Turk, with its widespread correspondent network and with its staff highly specialized in foreign operations, provides to its customers all kind of L/C transactions.
Kuveyt Turk’s Client is Exporter:
  • Exporter countersigns the sales contact with the buyer.
  • The buyer instruct his bank to issue a letter of credit complying with terms of sales contract.
  • Exporter receives the letter of credit from Kuveyt Turk.
  • The goods are shipped and/or services supplied. Shipping documents are presented by exporter to Kuveyt Turk’s branches subsequently.
  • If documents are in compliance with credit terms and conditions, you are either paid or receive a payment undertaking to be paid at a future date, depending on the payment terms of the letter of credit.
  • These documents are sent to the issuing bank.
  • The buyer then uses these documents to clear the goods from customs.
Kuveyt Turk’s Client is Importer:
  • Importer countersigns the sales contact with the buyer.
  • Importer instructs Kuveyt Turk to issue a letter of credit in respect of conditions stipulated in sales contract.
  • Professional and skilled staff of Kuveyt Turk issues the L/C.
  • Seller ships the goods and/or supplies the services.
  • Exporter presents the required documents to Kuveyt Turk through his bank, which is called as “presenting bank”.
  • The seller is paid or receives a payment undertaking to be paid at a future date, depending on the payment terms of the letter of credit.
  • Experts of Kuveyt Turk check the documents, debit your account in case that the L/C is available by payment at sight and documents are credit conforming, and subsequently deliver documents to the importer.
  • Importer clears the goods from the customs.

The different types of L/C are:

Revocable L/C
Revocable L/C can be amended or cancelled at any time by the importer without the consent of the exporter. This option is not often used, as there is little protection for the exporter. According to UCP Rules, all letters of credit are irrevocable, unless otherwise stated.
Irrevocable L/C
Irrevocable L/C can only be changed or cancelled with the consent of all the parties. The seller must comply with the terms and conditions of the credit in order to receive payment.
Confirmed L/C
In some instances, exporters may request a credit to be confirmed by another bank, (usually a bank in their own country). If a bank adds its confirmation to a credit, it means that it is obliged to pay if the terms and conditions of the credit are complied with. This obligation to pay exists even if the issuing bank or country defaults.
Unconfirmed L/C
The advising bank forwards an unconfirmed letter of credit directly to the exporter without adding its own undertaking to make payment or accept responsibility for payment at a future date, but confirming its authenticity.
Sight Payment L/C
The issuing bank and confirming bank, if available, assume the irrevocable obligation on behalf of the buyer to effect immediate payment (at sight) to the beneficiary (the exporter) subject to the presentation of credit conforming documents within a prescribed period of time and fulfillment of any other applicable terms and conditions.
Deferred Payment L/C
The issuing bank and confirming bank, if available, undertake to effect payment at a specified later date (for instance, 180 days after the date of shipment) under a deferred payment L/C subject to the presentation of the credit conforming documents within the validity of the documentary credit. As such, the due date must be clear from the credit. The exporter thus grants the importer time to pay.
Negotiation L/C
Under L/C available by negotiation, the exporter receives an advance payment from the negotiating bank on presentation of the required documents. If negotiating bank does not act as confirming bank, it has the right to seek recourse from the exporter if cover is not received from the issuing bank.
Acceptance L/C
The accepting bank guarantees payment to the holder of the bill of exchange on maturity date regardless of whether the credit is confirmed or not. Draft is usually drawn on issuing bank if the credit is not confirmed and it is drawn on confirming bank if the credit is confirmed one.
Transferable L/C
This is normally used when the exporter is not supplying the goods and wishes to transfer all or part of the responsibilities under the credit to the suppliers. With a transferable credit, the first beneficiary posses the option to instruct the transferring bank to transfer the L/C to the end supplier (the second beneficiary) either in full or in part.
Red Clause L/C
This enables the exporter to obtain advance payment before shipment. This is provided against the exporter's certificate confirming its undertaking to ship the goods and to present the documents in compliance with the terms and conditions of the documentary credit.
Green Clause L/C
Similar to a Red Clause Credit, but in addition to pre-shipment finance the exporter also receives storage facilities at the port of shipment at the expense of the buyer. The exporter usually presents a warehouse receipt in addition to the other documents.
Revolving L/C
Revolving L/C is normally used where shipments of the same goods are made to the same importer. It is a Single L/C that covers multiple-shipments over a long period. Instead of arranging a new L/C for each separate shipment, the buyer establishes a L/C that revolves either in value (a fixed amount is available which is replenished when exhausted) or in time (an amount is available in fixed installments over a period such as week, month, or year). L/Cs revolving in time are of two types: in the cumulative type, the sum unutilized in a period is carried over to be utilized in the next period; whereas in the non-cumulative type, it is not carried over.


And The Gold Bank Appears: following Fekete, China is embracing New Austrian Economics as the foundation for the new International Monetary System

You might already know that China aims for Official Gold Reserves at 8500 tonnes.

But you surely not know about the golden treasure embedded in the original opinion editorial by Song Xin, General Manager of the China National Gold Group Corporation, Party Secretary and President of the China Gold Association, 07/30/2014. 

He spoke about the strategic role of gold, and new institutions needed for gold circulation, precisely in the logic based on New Austrian Economics that I'm using in my articles on Conscience Sociale and elsewhere since 2011. [articles in english ; en français]. 

His sentences about the GOLD BANK is truly one of strong evidence of what I called the 'Grande Renaissance' which will transform the whole world in the following decades (another one is the growing interest in Agile Democracy).

Chosen excerpts of Xin's editorial [Translation by BullionStar], with emphasis mine :

"For China, the strategic mission of gold lies in the support of RMB internationalization, and so let China become a world economic power and make sure that the "China Dream" is realized. 

Gold is the only thing carrying the dual mantels of a commodity as well as a monetary substance. It's both a very 'honest' asset and forms the very material basis for modern fiat currencies. Historically, gold has played an irreplaceable role in responses to financial crises and wars as it comes to protecting a country's economic security. Because of this, gold carries with it an honored and divine-given strategic mission in the ascend of the Chinese people and the pursuit of the "China Dream".

The Important Function Of Gold.

Gold is the world's only monetary asset that has no counter party risk, and is the only cross-nation, cross-language, cross-ethnicity, cross-religion and cross-culture globally recognized monetary asset. Gold is the last protection for a country's economic security; it safeguards a nations sovereignty in times of crises. [...] 

From our country's point of view, gold has played an irreplaceable role in the development of our economic society.[...] After 1989, we suffered economic sanctions from Western countries for a while and the PBOC used our gold reserves to enter into swap agreements to obtain needed foreign currencies. Right now, gold is still serving its functions to protect against economic risks; contributing in ever more important ways to our financial security. For the moment, although in general the international scene is peaceful, conflicts can develop in certain regions. If there should be a blockade or regional war, there could be only one method of payment left: gold.

The strategic Mission Of Gold.

Since the 18th People Congress, general secretary Xi Jinping brought up the goal to revive our nation, to realize the "Chinese dream ". One important part of this dream is to have a strong economy. Though China is already the world's second largest economy, there is still a long way to go to become an economic powerhouse. The most critical part to this is that we don't have enough say in matters such as international finance and matters regarding the monetary system, the most obvious of which is the fact that the RMB hasn't fully internationalized.

Gold is a monetary asset that transcends national sovereignty, is very powerful to settle obligations when everything else fails, hence it's exactly the basis of a currency moving up in the international arena. When the British Pound and the USD became international currencies, their gold reserve as a share of total world gold reserves was 50% and 60% respectively; when the Euro was introduced, the combined gold reserves of the member countries was more than 10,000 tonnes, more than the US had. If the RMB wants to achieve international status, it must have popular acceptance and a stable value. To this end, other than having assurance from the issuing nation, it is very important to have enough gold as the foundation, raising the 'gold content' of the RMB. Therefore, to China, the meaning and mission of gold is to support the RMB to become an internationally accepted currency and make China an economic powerhouse.

In this view, our gold reserves are very low, both in terms of a nominal level as well as a percentage of official reserves. [...] The average of the world is about 10%, but for us it's only 1%.

That is why, in order for gold to fulfill its destined mission, we must raise our gold holdings a great deal, and do so with a solid plan. Step one should take us to the 4,000 tonnes mark, more than Germany and become number two in the world, next, we should increase step by step towards 8,500 tonnes, more than the US.

All-round, Multi-channel Increases In Gold Levels. Fulfill Our Part In Enabling Gold To Accomplish Its Strategic Mission.

How to achieve growth in our gold reserve? Apart from the PBOC directly buying in the open market, we should use also use the following strategies:

1. Relax gold import controls, grant large scale gold enterprises permits to import gold. In 2013, our gold consumption reached 1176.4 tonnes. Compared to the 426 tonnes of local production, there is a shortage of 750 tonnes. To meet this gap, we presently let the 12 commercial banks with gold-trading rights import standard gold ingots. But these banks lack the ability to refine and assay gold, they can only import standardized gold, missing the large amount of non-standardized gold and wasting the international resources that we could reach. By relaxing import controls, the large-scale gold companies can then obtain this gold and use their own technology to refine it into standard quality gold. This can help meet demand in the market, or turn gold into official reserves as required.

2. Establish a gold reserve building fund. This can be seeded using capital from the State Treasury, and open it for participation by private-sector capital in the public. It should be controlled by the State and used to target diverse off-shore gold resources, acquire mines and raw gold and in so doing, extend our reach beyond our borders and add a layer of opaque reserves to otherwise standard reserve numbers. 

3. Establish a Gold bank. We need to establish our gold bank as soon as possible, and enable it to break the barrier between the commodity and monetary world. It can further help us acquire reserves and give us more say and control in the gold market. It may be guided under the PBOC and led by the China Gold Association, involving leading gold industry companies and commercial banks, and it's business would include: gold pricing (fix), gold financing and leasing, gold-guaranteed payments, gold saving accounts, gold lending, gold production chain financing and issuance and trading of paper gold and other gold investments. This gold bank can then naturally use market-oriented methods to change commodity gold into monetary gold reserves, thus help us increase our strategic gold reserves."

And here they are, as we have anticipated: the Mint, the gold Clearing House, the Gold Bills, the Gold Bonds. Hats off, Pr. Fekete! 
Les bonnes idées ne meurent jamais. C'est même à çà qu'on les reconnaît.


ps: Dear readers, with this reform of the IMS now on the right track, this was my last post on Conscience Sociale, which is put on hold. Thanks for your constancy and your always growing interest : more than 10,000 pages viewed each month, specially by education, research institutes, banks and ministers all over the world.

My last advice would be to read again from time to time the most important and unfinished page on this site.

À mesure qu'on avance dans la vie, on s'aperçoit que le courage le plus rare est celui de penser.
(F.A. Thibault, 'Anatole France', 1844 – 1924)


US Treasuries, BRICS and all other

FOREIGN HOLDERS OF US TREASURY SECURITIES, ranked by the rate of annual change 

(HOLDINGS AT END OF PERIOD, in billions of US dollars)

Country Apr Apr RoC,
2014 2013 YoY 
Russia 116,4 149,4 -22,1%
Thailand 46,9 59,3 -20,9%
Peru 13 15,9 -18,2%
Chile 26,4 32,1 -17,8%
Turkey 50,5 60,4 -16,4%
Philippines 33,9 39,3 -13,7%
Australia 31,2 35,8 -12,8%
Canada 60,5 66,2 -8,6%
Ireland 112,1 120,5 -7,0%
Oil Exporters  255,5 271,7 -6,0%
Luxembourg 141,3 149,7 -5,6%
Taiwan 175,7 185,7 -5,4%
All Other Countries 195,9 206 -4,9%
Switzerland 177,6 185,8 -4,4%
Poland 30,5 31,6 -3,5%
Spain 22,3 23 -3,0%
Brazil 245,8 253,1 -2,9%
China, Mainland 1263,2 1290,7 -2,1%
Singapore 93,1 92,3 0,9%
Germany 63 62,2 1,3%
Korea 55,3 53,1 4,1%
South Africa 14,2 13,6 4,4%
Colombia 32,9 30,9 6,5%
Israel 26,1 24,5 6,5%
Carib Bkg Ctrs  308,4 285 8,2%
Japan 1209,7 1112,7 8,7%
Sweden 35 32,1 9,0%
Hong Kong 155,1 141,2 9,8%
Denmark 15,3 13,7 11,7%
Italy 32 28,1 13,9%
Norway 85,6 74,9 14,3%
United Kingdom  185,5 160,2 15,8%
India 68,7 55,8 23,1%
France 62,3 50,6 23,1%
Mexico 70,6 57 23,9%
Netherlands 36,2 27,3 32,6%
Kazakhstan 32,7 23,1 41,6%
Vietnam 14,2 9,7 46,4%
Belgium 366,4 185,5 97,5%
Grand Total 5960,9 5709,7 4,4%

Of which:
Foreign Official 4067,5 4080 -0,3%
BRICS + Oil Exporters 1963,8 2034,3 -3,5%

Eurozone excepting
Belgium 469,2 461,4 1,7%

(RoC = rate of annual change)

Remember: Belgium, Luxembourg, UK and Switzerland are custodial centers. More details here.

Source: TIC data, published 06/2014


The golden age of our times is the age of gold

Towards a new international monetary system - Part 2.

[Ceci est la traduction en anglais de l'article original écrit en français]

We first established in January 2013 the need to resolve the problem of the international monetary system, and its absolute priority. [1] 

We then proposed in May 2013 a strategy to effectively prepare the necessary resilience to support the change in the international monetary system. [2] The various official announcements over the past months have largely confirmed that this anticipation was shared. [3] 

The synthesis of this strategy was again stressed by Laurence Brahm on 21/10/2013: 
It is not the complete removal of the old Bretton Woods financial architecture but rather the creation of a new parallel structure to the old. Eventually, countries will be able to choose which architecture is better suited to their own plans for reconstruction and renovation. " [4] 
The Golden Age (Zucchi)
This week of March 2014 where I release this article sees an important step in international relations. It is nothing less than discussing the 2015 framework and choosing between the repetition of the Vienna Conference in 1815 (the Concert of Nations) or Yalta Conference in 1945 (the Cold War) that will support the “new rules of the game in international politics“. [5] 

In fact, this week in Europe a large number of high level bilateral meetings take place: 
·                     President Xi with the Prime Minister of the Netherlands, François Hollande, Angela Merkel then with the European Commission president [6] 
·                     President Obama with President Xi, and then he has extended his trip at the last minute to meet the Heads of State of the Netherlands, Italy, Belgium, UAE, South Korea, Japan, then a meeting with the Pope in Rome and a meeting with the King of Saudi Arabia. [7] Not to mention a planned meeting with Mr Barroso and Van Rompuy [8] 
·                     The G7 meeting on the sidelines of the Nuclear Security Summit in 2014 
·                     And other bilateral meetings, more or less official and prepared, among other heads of state following their presence at the Nuclear Security Summit 2014.
Officially the goal is mostly to talk about the crisis in Ukraine and Crimea, or to sign some contracts. The public communiques will mention them. 

We believe that other issues, much more important but related, will be discussed : those around the current reorganization of the new international monetary and financial system. [8.1]
Marketable U.S. Treasuries held by the Fed in custody for Foreign Official and International Accounts; till 3/26/2014; 
(Sources: St Louis Fed,

Our analysis is that the Ukrainian crisis was triggered by the U.S. deep state in preparation for the introduction of this next reorganization. [9] This is to retain the EU in the area of U.S. domination. [9.1] 

The time has come to clarify what we mean by new international monetary and financial system. 
We believe this is not only about launching what is already announced: 
·                     A Development Bank for BRICS parallel to the World Bank 
·                     A BRICS stabilization fund parallel to the IMF 
·                     New bilateral trade agreements parallel to the WTO 
but to go much further. 

Firstly, BRICS Development Bank is becoming a "Bank initiated by BRICS for the development of all interested parties" and whose governance is open to any state wishing to join with the framework agreement. [9.2] 

Secondly, and this is the most innovative part: it is to create another institution parallel to the Bank for International Settlements (BIS)
This is the oldest international financial institution fully governed by the West (6 permanent members and founders are the central banks of Belgium, France, Germany, Italy, UK and USA, which can have a double voting weight - analogy with Obama's meetings this week is not a coincidence [10]) 

BIS is the central bank of central banks, that is to say, it organizes and manage trade between them ... especially those concerning physical gold. Activities related to financial regulation (the famous Basel Committee rules) were added much later, after the existence of the bank became public when it was kept secret since its inception. [10.7]

The first problem to solve for the overhaul of the international monetary and financial system is not really the choice of a new currency. This is only a means. This is primarily to ensure price stability and the development of international trade. Otherwise, the only alternative is endless war for resources that are increasingly scarce. It is therefore necessary to separate the problem of a reference currency for international trade, from that of a reserve currency for central banks.

Global geopolitical dislocation following the 2008 crisis has cut the Gordian knot: there is no need any more to make a decision for all countries (which has blocked reform for many years [10.6]). Now BRICS countries have the initiative and willingness to move forward. This will is the key factor as we wrote: [10.9]
The global geopolitical context is characterized primarily by a tilt after reaching the tipping point: the decline of the American empire on the one hand and the rise of the multipolar initiative led by BRICS on the other. Because they are so desperately lacking in autonomy of decision and willingness, the EU and Japan find themselves buffeted by this tidal wave of history. 
The choice is made for several years, international trade will be based on gold [10.3]. 

How will this happen in practice? Not with boats or trucks loaded with bullions, of course. As we said a "second BIS" was designed that can manage a clearing house for payments (settlements) in physical gold, especially to add to it a fundamental function to allow again international settlements for goods using "Real Bills" (a.k.a. Gold Bills), as recommended by the New Austrian School of Economics. In his work Professor Fekete described these Gold Bills as being “destined to be settled in gold coins that are made available after the ultimate consumer surrenders them in exchange for finished consumer goods upon maturity”. [10.4] Their issue is strictly limited by the orders received to buy goods. They allow increasing the money velocity without systematically using coins and without any risk of inflation. [10.1] 

This is far from a simple "100% gold" standard.

Gold is the only money (gold - silver ratio must float) as everyone knew for millennia. Today most people have more or less forgotten this unique role, but not Western central bankers who have tried for a century to put lipstick on a pig, so to speak. [10.8] By deceiving us, they deceived themselves and began to believe their own nonsense. A historical failure and on a global scale. Alas, alas, it is a failure of the European spirit. We need to recognize it in order to find the impetus beneath our feet allowing us to arise from the depth of this graveyard by the sea. [10.2] 

BRICS countries do not necessarily need the West to initiate this new settlement system. [10.5] It must be noted in this respect what it can supersede. The dollar currency and U.S. Treasury at the foundation of famous "petrodollars" are replaced by the Gold Bills that will allow buying oil for example. [11] It is the function of reference currency for international trade. 
But US Treasuries have a function of income related to their mid/long term interest rate too - it is also a fatal flaw in this system. This is the second problem: the choice of the reserve currency for central banks.

The new system offers very smartly to decouple these two functions. The income function can be brought (at appropriate time) by introducing gold bonds, that is to say bonds denominated in gold weight, with interests denominated in gold weight and whose principal is redeemable in gold weight (ie not merely an obligation backed by a collateral gold and denominated in fiat currency – a.k.a. gold backed bonds). Again, we must have an institution for the issuance of these bonds. 

Note that to start, it is not necessary to replace any national currency by gold coins. The gold bills will circulate in parallel of currencies, and user confidence in these currencies will be reflected in real time in the local price of that currency measured in mg of gold (that is to say, the inverse of the ‘price of gold’ measured in the currency, which is the usual vision that we have - a totally wrong perception because you can not measure the length of a bar with a rubber-band: you must take the opposite approach). Hence the fundamental importance of not having rigged gold markets as currently in New York and London. [12]

Price of one U.S. dollar in mg of fine gold between 1968 and 3/24/2014
(Sources: St Louis Fed, LBMA, )

The U.S. have no way to prevent BRICS countries to launch this parallel system, a competitor of the one based on U.S. Treasury bond, and which finally obliterate their attraction.  

The only remaining choice as new rules for American decision-makers (that is to say, the public state and the deep state) are the following, as they are standing with their back to the wall [12.2]: 
·                     either to accept an open cohabitation  of two parallel systems, with 100% of the players who know that the dollar system can not be competitive (very quickly one system will endure and all U.S. Treasury assets going up in smoke). Modestly this is called "asset restructuring in U.S. bonds market." This is the path of Vienna in 1815. [12.1] 
·                     or not to accept this open cohabitation, that is to say close the door to hide behind and build a wall as high as possible so that no one can escape from the dollar zone. For this area can last as long as possible (while being doomed because of deflation), it must be the largest possible, and the EU is a tempting (with its remaining gold reserves) and very easy prey thanks to Atlantist governments and European Commission who are obediently following the interests of the American deep state. The strategy is therefore to make them sign the TTIP as soon as possible, which quickly convince them not repatriate their gold and abandon the euro (two currencies for the US-EU area only, is one too many) as they have already abandoned their sovereignty. This is the way of Yalta in 1945. [12.3] 

The next time you meet your President or Prime Minister, you now know which good question to ask him: what did he choose for us and that is supposed to commit all?
BRICS countries are reaching out to European peoples since 2009, and our governments show their disdain so far, preferring the shadows of the world before. [13] But it is not too late to think about our place in Europe and in the world, it remains few short months and the ticket can be taken since this week. Hurry up or repent. 
What is currently discussed off-line is however everybody's concern, and will commit us for a long time to come. Do not suffer without understanding.

An error doesn't become a mistake until you refuse to correct it.
(O.A. Battista, 1917-1995)


[1] ‘La crise écologique globale exige une refonte du système monétaire international’, Conscience Sociale, 01/2013 ; This article was itself in the continuity of the fundamental question raised in 2011: 'How to replace the world trade reference currency', Conscience Sociale, 06/2011 

[2] a) 'Towards a new international monetary system - part 1', EN or FR version, Conscience Sociale, 2013 ; b) The first mention of this strategy can be found in the conclusion of 'La géoéconomie des Bons du Trésor US', Conscience Sociale , 12/2012 

[3] a) ‘China, Europe Agree on Currency Deal’, ; b) ‘China's planned crude oil futures may be priced in yuan’, Reuters ; c) ‘India to resume paying Iran in Euros’, India Times ; d) ‘PBOC Says No Longer in China’s Interest to Increase Reserves’, Bloomberg ; e) ‘China’s central government has reportedly approved 12 new free trade zones, including ones in Tianjin and Guangdong’, The Diplomat ; f) ‘Harbinger: 23 countries begin setting up swap lines to bypass dollar’, The Examiner ; g) ‘FMI: La réforme de l'institution reste bloquée par Washington’, Les Echos ; h) ‘Dollar-based system is inherently unstable - The culprit is the dollar’, Financial Times ; i) ‘A Shanghaï, Pékin s'offre un laboratoire des réformes’, Le Monde ; j) ‘La banque de développement et le FMI des BRICS sont nés’, L’Express ; k) ‘Shanghai Free-trade Zone to lead on yuan reform’, South China Morning Post ; l) ‘IMF Quota and Governance Reform: Political Impulse Needed for Progress on Reform Process’, CIGI ; m) ‘South Korea, Australia ink US$ 4.5 billion currency swap agreement’, Sovereign Wealth Fund Institute ; n) ‘BRICS Bank: Caution is a good policy’, India&Russia Report ; o) ‘G20 regrets IMF reforms delay, India says can't wait for long’, Industan Times ; p) ‘Медведев: особую экономическую зону в Крыму будет курировать Козак’, RBC Daily ; q) ‘Gold trading to open up to foreigners in Shanghai’, SCMP, 03/2014; r) 'Russia without dollar - what are the risks?',, 03/2014 

[4] a) 'Les Brics veulent en finir avec l’extrémisme des marchés financiers’, RIA Novosti ; b) original article: 'БРИКС положит конец рыночному фундаментализму' RBC Daily

[5] a) R. Cohen, ‘International Politics: The Rules of the Game’, Longman Group United Kingdom, 1982 ; b) China's President Xi hence said this week: "China is firmly committed to ... building a new model of major country relations", Reuters, 03/2014 

[6] Le Parisien, 03/2014 

[7] The Guardian, 03/2014 

[8] European Council, 24/03/2014 

[8.1] For instance we should not ignore: a) 'Did Russia Just Move Its Treasury Holdings Offshore?', WSJ, 03/2014 ; b) 'Emerging Markets central banks sell US government bonds', Financial Times, 03/2014 

[9] a) ‘La crise ukrainienne, un événement de la politique profonde’, Conscience Sociale, 03/2014; b) For the exact definition of deep state see 'La politique profonde et l’Etat profond (deep deep politics and the State), Conscience Sociale, 03/2014 

[9.1] ‘Global systemic crisis-escalation in the US reaction for survival: trigger a cold war to make it easier to annex Europe’, Global Europe Anticipation Bulletin n°83, 03/2014 

[9.2] 'The Way Forward for the Brics New Development Bank ', All Africa , 03/2014 

[10] Obama and Cameron prepared this meeting last week: , 03/2014 

[10.1] Real Bills maturity is 91 days maximum. 

[10.3] 'Building a strong economic and financial security barrier for China - Actively build and implement national gold strategies', In Gold We Trust, 09/2013 

[10.4] a) For more details, you can read his recent announcement ‘Gold Bills Payable in Gold Sovereigns' AE Fekete, 03/2014 ; b) On the distinction between Gold Bills and Real Bills: ‘Interview with Prof. Fekete’, Daily Bell, 03/2014 

[10.5] The group formed by the BRICS is already sufficiently autonomous: 'Sanctions effect: Russia to change its Economic Partners... for the better', Russia Today , 03/2014 

[10.6] 'U.S. Dollar, Euro, Renminbi as invoicing currencies in international trade and as reserve currencies - A bibliography', Conscience Sociale

[10.7] Founded in 1930, its existence was publicly unveiled in 1977. Note also that according to the by-laws the small territory of the BIS building is not subject to Swiss law. Police or army can not have access. See also 'Tower of Basel: The Shadowy History of the Secret That Runs the World Bank', Adam LeBor , PublicAffairs, 2013 

[10.8] 'Bernanke Tells Congress: I Don’t Really Understand Gold' , Forbes , 07/2013; But they recognized themselves be burnt out: see Conscience Sociale, 08/2013 

[10.9] 'Focus' chapter in Global Europe Anticipation Bulletin No. 83, 03/2014 

[11] It should be noted in this respect that the BRICS countries have learn from the experience of purchases by India of Iranian oil using gold, through Turkish banks. This is a case of an unjust embargo imposed by the West proved to be a weakness that would lead to huge consequences. History is fond of this kind of irony. See a) WSJ , 02/2014 ; b) Foreign Policy , 02/2014 

[12] a) 'Sun Zhaoxue: The United States Intends To Suppress Gold To Ensure The Dollar’s Dominance', In Gold We Trust, 01/2014 ; b) The origin of this strategy date back to distant times. See for instance: 'Minutes of Secretary of State Kissinger’s Principals and Regionals Staff Meeting, Washington, April 25, 1974', in FOREIGN RELATIONS OF THE UNITED STATES, 1973–1976, VOLUME XXXI, FOREIGN ECONOMIC POLICY, DOCUMENT 63 ; c) 'La Manipulation du Prix de l’Or', 24hgold, 09/2008 ; d) 'Barclays, Deutsche Bank Accused of Gold Fix Manipulation', Bloomberg, 03/2014 

[12.1] 'What the world needs is 19th century behavior', Russia in Global Affairs, 03/2014 

[12.2] 'L'implosion du marché COMEX et la dé-américanisation du monde’, Conscience Sociale, 10/2013 

[12.3] 'L'Union européenne: la nouvelle URSS', Vladimir Bukovsky

[13] ‘La dérive néo-conservatrice de la politique française’, Agile Democracy , 03/2014