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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Barclays Fined For Manipulating Price Of Gold For A Decade

It was almost inevitable: a week after we wrote "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold" and days after "Barclays’ Head Of Gold Trading, And Gold "Fixer", Is Leaving The Bank", earlier today the UK Financial Conduct Authority finally formalized what most in the "tin-foil" hat community had known for years, when it announced that it fined Barclays £26 million for manipulating "the setting of the price of gold in order to avoid paying out on a client order." Furthermore, the FCA confirmed that those inexplicable gold raids which come as if out of nowhere, and slam gold with a vicious force so strong sometime they halt the entire market, had a very specific source:Barclays, whose trader Daniel James Plunkett, born 1976, "sent out a burst of orders aimed at moving the price of the yellow metal."

This took place for a decade. As the FT reports:

The FCA said Barclays had failed to “adequately manage conflicts of interest between itself and its customers as well as systems and controls failings, in relation to the gold fixing” between 2004 and 2013.

Some further details on Plunkett’s preferred means of manipulating the gold price.

The FCA said Mr Plunkett had manipulated the market by placing, withdrawing and re-placing a large sell order for between 40,000 oz and 60,000 oz of gold bars.

He did this in an attempt to pull off a “mini puke”, which the FCA took to mean a sharp fall in the price of gold. As a result, the bank was not obliged to make a $3.9m payment to the customer under an option contract.

Which is precisely what we have shown many times here for example in "Vicious Gold Slamdown Breaks Gold Market For 20 Seconds", when a sell order so aggressive comes in it not only takes out the entire bid stack with an intent not for "best execution" but solely to reprice the market lower. Recall from September:

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