China plans investment bank to break World Bank dominance

Looks like China and Russia are really moving forward on dedollarization of the worlds currency!

rt.com

China is moving forward with a plan to create its own version of the World Bank, which will rival institutions that are under the sway of the US and the West. The bank will start with $100 billion in capital.

The Asian Infrastructure Investment Bank (AIIB) will extend China’s financial reach and compete not only with the World Bank, but also with the Asian Development Bank, which is heavily dominated by Japan. The $100 billion in capital is double that originally proposed, the Financial Times (FT) reported.

A member of the World Bank, China has less voting power than countries like the US, Japan, and the UK. It is in the ‘Category II’ voting bloc, giving it less of a voice. In the Asian Development Bank, China only holds a 5.5 percent share, compared to America’s 15.7 percent share and Japan’s 15.6 share.

At the International Monetary Fund, China pays a 4 percent quota, whereas the US pays nearly 18 percent, and therefore has more influence within the organization and where loans go.

“China feels it can’t get anything done in the World Bank or the IMF so it wants to set up its own World Bank that it can control itself,” the FT quoted a source close to discussions as saying.

To date, 22 countries have expressed interest in the project, including oil-rich Middle Eastern nations, the US, India, Europe, and even Japan, the FT reported.

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China Finds $15 Billion of Loans Backed by Fake Gold Trades

By Bloomberg News Jun 26, 2014

China’s chief auditor discovered 94.4 billion yuan ($15.2 billion) of loans backed by falsified gold transactions, adding to signs of possible fraud in commodities financing deals.

Twenty-five bullion processors in China, the biggest producer and consumer of gold, made a combined profit of more than 900 million yuan from the loans, according to a report on the National Audit Office’s website.

Public security authorities are also probing alleged fraud at Qingdao Port, where copper and aluminum stockpiles may have been pledged multiple times as collateral for loans. Steps by the Chinese government to rein in credit by raising borrowing costs in recent years created a surge in commodities financing deals that Goldman Sachs Group Inc. estimates to be worth as much as $160 billion.

“This is the first official confirmation of what many people have suspected for a long time — that gold is widely used in Chinese commodity financing deals,” said Liu Xu, a senior analyst at Capital Futures Co. in Beijing. “Any scaling back by banks of gold-backed financing deals might lead to a short-term reduction in Chinese imports and also spur some sales by companies looking to repay lenders.”

As much as 1,000 metric tons of gold may have been used in lending and leasing deals in China, where commodities including metals and agricultural products are used to get credit amid lending restrictions, according to World Gold Council estimates.


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Austria defies US, EU over South Stream during Putin visit

Austria's OMV and Russia's Gazprom have signed a deal for the Austrian section of the controversial South Stream gas pipeline that bypasses Ukraine. Austria's president, Heinz Fischer, has rejected US and EU criticism.

Austrian energy company OMV and Russia's Gazprom signed a contract on Tuesday for the construction of the South Stream pipeline's Austrian section.
It came just hours before Russian President Vladimir Putin arrived in Vienna for a one-day visit.
While OMV general director Gerhard Roiss said the South Stream pipeline would "ensure energy security for Europe, particularly for Austria," the US embassy in Vienna launched a thinly veiled attack on the move.
In a statement, it said that trans-Atlantic unity had been essential in "discouraging further Russian aggression" and that the Austrians "should consider carefully whether today's events contribute to that effort."
In a meeting with Austrian president Heinz Fischer, Putin slammed the criticism by saying that "our American friends... want to supply Europe with gas themselves. They do everything to derail this contract..."
Fischer also defended the project, stating that "no one can tell me why... a gas pipeline that crosses NATO and EU states can't touch 50 kilometers (31 miles) of Austrian territory."

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30 Reasons The Bear Phase In Gold Ends This Summer

www.jsmineset.com

Here are the 30 reasons, 23 new and 7 set in cement, of why the Bear phase in the bull market for gold ends this summer without any new lows.

1. The New definition of warfare is economic. Sanctions against Russia and the implications for the Petrodollar

2. FACTA and the universal long arm of the US government via any transaction internationally that passes even momentarily through the dollar as a contract settlement mechanism. The negative implications for the dollar’s future as a contract settlement mechanism internationally.

3. EU split over sanctions due to Russian energy demand and Russian business interests.

4. Middle East Western Hegemony and Arab Spring is defunct.

5. Iran to assist in Iraq if asked, which is the failure of "Misssion Accomplished."

6. Iraq oil production challenged by ISEL.

7. Kurds emboldened by ISEL.

8. US relationship with Saudi Arabia and Qatar is strained.

9. BRICs uniting economically and politically as a standalone force.

10. China expands Yuan/Renminbi as an international currency.

11. China’s China Sea energy tensions with Japan and Vietnam.

12. USA’s position on the China Sea crisis where Japan is concerned.

13. The militarization of Japan.

14. The distinct scent of inflation.

15. General dissatisfaction with answers to questions to Chair Yellen regarding FOMC meeting last week

16. IMF reduced expectations of US economic recovery.

17. US Zombie Banks as defined by banks leveraged generally 30 to 35 times the size of their capital of total OTC derivative exposure.

18. Condition of the flooded municipal bond market.

19. Decline in volume with rise in value of equities, making equity price shadows our reality.

20. Totally irrational exuberance driven by hyper liquidity.

21. Hyper liquidity can become hyper inflation via the velocity of money in a crisis of confidence of the dollar. Therefore hyperinflation will be a currency motivated event.

22. Reaction in the momentum equity leaders of the last 2 years burning a public.

23. Strength of the utilities group which has historical attachment to tops in equity markets.

Old problems:

24. The one quadrillion, one hundred and forty four trillion dollars real size of the OTC derivatives market.

25. Economic underpinning of the dollar in jeopardy as recovery sputters globally

26. Absurd size of the Fed balance sheet and lack of marketability of significant size legacy derivative positions.

27. Taper of QE and little Belgium to the QE rescue.

28. China and Russia on the sell side of the US treasuries.

29. MY RA exposes consideration of invasion of retirement accounts, and GOTS (Get out of the system) as a defense strategy.

30. The huge drop out of the labor pool in the US, making employment figures sketchy at best.

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Anti Private Federal Reserve Banking System Opposition Growing in Germany

 In Germany, if you don’t support Central Banking, this apparently means you are a Nazi. Is the major media lying by not offering an opposing view?  Take a look at the video, judge for your yourself, do we get the opposing view in the U.S.?

Shanghai to Start International Gold Trading in 4Q

China definitely wants to increase it's presence in gold trading, with the probable announcement of QE 4 the prices of gold and silver will really start to move up. - Gary

By Bloomberg News Jun 20, 2014

China, the world’s biggest gold user, will start international gold trading in Shanghai’s free-trade zone in the final quarter of this year, according to a city government official.

“We will aim to commence trading in the fourth quarter,” Zheng Yang, head of Shanghai’s financial services office, said today in a conference in the city. The nation’s central bank earlier this week approved the trading platform to be included in the zone’s banking system.

China, also the world’s largest bullion producer, is seeking to step up its presence in the global gold market at a time when the industry is discussing changes to the century-old fixing benchmark in London used to trade and value the metal. The country overtook India as the largest user last year as the biggest price drop in more than three decades spurred purchases, the World Gold Council said in February.

“The new platform is to attract foreign investors and to get China more influence in the global bullion market,” said Liu Xu, an analyst at Capital Futures Co. in Beijing.

Qualified investors can open accounts with the four designated banks including Industrial & Commercial Bank of China Ltd. to trade gold in the area, the People’s Bank of China’s Shanghai head office said June 18.

The free-trade zone is a testing ground for liberalizing interest rates and currency usage. The Shanghai Gold Exchange, the country’s biggest physical bourse for the precious metal, is considering allowing the use of offshore yuan in gold trading in the zone, Bloomberg News reported on June 4.

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China to start direct trade between yuan and British pound

www.dw.de/

China has announced it will allow the direct trade between its yuan national currency and the British pound later this week. Analysts said the move was designed to further internationalize the unit.

China's Foreign Exchange Trade System (CFETS) said Wednesday the Asian nation would start direct trade between the renminbi and the British pound on Thursday.
Sterling and yuan would be directly swapped without using the US dollar as an intermediary, the trade platform noted.
"The move will promote the bilateral trade and investment between China and the United Kingdom and facilitate the use of renminbi and pound in the cross-border trade settlement," CFETS commented.
Perfect timing

China has long had direct currency trade with the US and has recently added Japan's yen, the Australian, New Zealand and Canadian dollars, Russia's ruble and the Malaysian ringgit to its options.
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US dollar domination makes world economy unstable, new reserve currencies needed

The Voice Of Russia

Devaluation wars are in full swing and the death of the dollar as the international currency seems almost inevitable. Jacques Sapir, a French economist and the director of the Higher School of Social Sciences in Paris, and a prominent expert on the issue, shared his forecast regarding the future of the global financial capital with Radio VR.

Agreeing that Russia's and China's desire to get rid of the dollar in their gas transactions is quite likely to be fulfilled, he pointed out that many countries, especially the producers of raw materials, would like to end their dependency on dollar for international transactions.
"And let’s add something else here: the complaint of the American government regarding the French bank BNP Paribas," noted Mr. Sapir. "They complained about the fact that that bank performed operations that contradicted the American legislation, although that bank’s offices were located outside of the territory of the United States, but because the dollar was used and the clearinghouse was in the USA, the American government decided that the American legislation was violated. It is an extremely complicated legal issue, but we clearly understand that that precedent, in legal terms, can only make concerned a number of countries, which do their transactions in dollars and can only push them towards choosing other currencies for transactions."
Mr. Sapir also remarked that the desire to create another world reserve currency besides the dollar is hardly new, as General de Gaulle attacked the US dollar’s status in 1965-66, and that every currency crisis sparkles similar debates. "On the one hand, it is clear that the current system based on non-exclusive, but very dominant use of the dollar as the reserve currency is unsatisfactory! And actually, one can see that in the structure of currency reserves of various central banks. For example, one can see that besides the dollar there is the euro, and now also a number of new currencies – for example, the Canadian dollar, Australian dollar, Singapore dollar and so forth. Thus, in the least there is a natural need for diversification, and perhaps even the need to change the system," said Mr. Sapir.
He also added that in order to fully restructure the international currency system it needs to be politically feasible to conduct an international conference similar to the Bretton Woods Conference of 1944. "Another path is to develop currencies, which at the regional level are beginning to play the role of the regional reserve currency. I believe that China’s goal is to make its national currency, the yuan, in a few years become the reserve currency at the level of the Asia-Pacific Region

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Government snatches idle accounts

THE federal government has seized a record $360 million from household bank accounts that have been dormant for just three years, prompting outrage in some quarters amid complaints that pensioners and retirees have lost deposits.

Figures from the Australian Security and Investments Commission (ASIC) show almost $360 million was collected from 80,000 inactive accounts in the year to May under new rules introduced by Labor.

The new rules lowered the threshold at which the government is allowed to snatch funds from accounts that remain idle from seven years to three years.

The rule change has delivered the government a massive bonanza with the money collected in the year to May more than the total collected in the past five decades combined. Between 1959 and 2012, the total collected was $330 million.

While the purpose of the laws is actually to reunite people with lost accounts before funds are eroded by fees and other charges, the lower threshold has been criticised as a budget cash-grab which affected accounts that were neither lost or forgotten.

Australian Bankers' Association chief executive Steven Munchenberg said the legislation was a "rushed" budget-boosting exercise which had transferred money set aside by people for their grandchildren's future to the government's coffers.

"We have grandparents who put money aside for their grandkids' future and farmers who have set aside money for a rainy day, but it was transferred to the government," Mr Munchenberg told Fairfax Media.

Connie Franze, 68, and her son Vince, 45, told Fairfax Media they were trying to reclaim life savings of more than $12,000 that was taken by the government last June.

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Indian, Chinese Central Banks on track to absorb 90% of Gold mine output

INDIA June 10 2014 10:35 AM

MUMBAI (Scrap Register): Indian and Chinese central banks on track to absorb the equivalent of 90% of all mined gold production this year, said ETF Securities in its Precious Metal Weekly.

China, India and central banks absorbed just over 80% of global mine supply in 2 013 according to recent data. Recent data indicates that these three entities alone are likely to absorb the equivalent of nearly 90% of mine production in 2014m said ETF Securities.

Demand from India is likely to increase with the curtailing of the 2013 import restrictions . Central banks purchased 122 tons of gold in Q1 which is essentially unchanged year-on-year and China’s imports of gold from Hong Kong are up 18% year-on-year as of April . On a similar note, sales of US mint silver coins are on pace in 2014 to surpass the record 35 million ounces sold in 2013.

The US mint must purchase its silver from US sources and the amount of silver mined in the US in 2013 was only 35 million ounces. Most of the demand for silver is for industrial purposes and inventories are the lowest in decades – the majority in ETFs.

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Renminbi (RMB) Yuan Clearing Bank To Open In London

Posted by: Paul Ebeling Posted on: June 2, 2014

A RMB Yuan (CNY) clearing bank will be officially appointed in the United Kingdom (UK) in June, said Mark Boleat, policy chairman for the City of London Corp, in an interview at the weekend.

“There will be a clearing bank in London. In due course, there will be an announcement,” Mr. Boleat said. The news will be an endorsement for London’s efforts to become an offshore yuan center. Other European financial centers in the race to become a Yuan center include Frankfurt, Paris, Switzerland and Luxembourg.

An official clearing bank facilitates efficient clearing of offshore Renminbi transactions, achieved through the appointed bank’s direct cooperation with the People’s Bank of China (PBOC) , the country’s central bank.

Mr. Boleat said having a clearing bank in London will act as a signal for London’s growing Yuan activities, although activities are already cleared through many commercial banks’ own channels.

For example, in December Standard Chartered (LO:STAN) teamed up with Agricultural Bank of China to provide their own Yuan clearing platform, making use of the 2 banks’ expertise and client base in the UK and China.

Mr. Boleat’s news follows a memorandum of understanding China and the UK signed in April to work together on a clearing bank for London.


A week before that agreement was reached, China also signed a memorandum with Germany to work on appointing a clearing bank in Frankfurt, highlighting the fierce competition between European financial centers for more yuan activities.

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