What is The Unit? BRICS Unveils Its Grand Plan for a New Gold-Backed Financial System

What is The Unit? BRICS Unveils Its Grand Plan for a New Gold-Backed Financial System

On May 17, 2024 By Awake-In-3D

The Unit’s structure, anchored in gold and BRICS+ currencies, provides for de-dollarization, along with a stable and decentralized monetary framework.

In This Article:

1. Introduction to the BRICS+ Unit

2. Addressing Global Financial and Payment Issues

3. Economic and Political Benefits

4. Technological Features and Adoption Prospects

In 2024, the global financial landscape is poised for a significant transformation with the introduction of a groundbreaking concept: it’s called the Unit.

A boring and unremarkable name, but it makes total sense and it’s financial implications will be profound.

Proposed by the financial services and investments working group of the BRICS+ Business Council, the Unit aims to establish a decentralized monetary ecosystem.

Expected to become official BRICS+ policy by 2025, the Unit seeks to address critical geoeconomic issues, particularly the global crisis of trust in existing monetary frameworks.

Introduction to the BRICS+ Unit

The Unit, conceptualized by Alexey Subbotin, founder of Arkhangelsk Capital Management, is designed to tackle the inherent flaws of centralized monetary systems established over 80 years ago at Bretton Woods.

This financial sovereignty is particularly appealing to countries seeking an alternative to the current centralized, dollar-based systems.

These flaws include chronic deficits, speculative bubbles, politically motivated sanctions, and a lack of fair arbitration.

The Unit proposes a reliable, quick, and economically efficient solution for cross-border payments, functioning as a new form of international currency issued in a decentralized manner and regulated at the national level.

Addressing Global Financial and Payment Issues

The current global financial system faces numerous challenges, including speculative bubbles and politically motivated sanctions.

The Unit aims to address these issues by providing a decentralized monetary framework that is both reliable and efficient for cross-border payments.

By doing so, it tackles the root problems of chronic deficits and lack of fair arbitration, offering a solution that can restore trust in the global financial system.

Economic and Political Benefits

The Unit offers numerous benefits, particularly for the Global Majority, by providing a form of apolitical money. It aims to harmonize trade and financial flows, maintaining independence from political pressures.

This financial sovereignty is particularly appealing to countries seeking an alternative to the current centralized systems. The Unit’s structure, anchored in gold (40%) and BRICS+ currencies (60%), provides a stable and trustworthy monetary framework.

Technological Features and Adoption Prospects

Technologically, the Unit is designed to be compatible with both traditional banking operations and the newest forms of digital banking.

It aims to upend unfair pricing in commodity trading by establishing the Eurasian Mercantile Exchange, where trading and settlement can be conducted in this new currency.

This approach facilitates the development of new financial products for foreign direct investment (FDI), bridging trade flows and capital.

The Unit employs distributed ledger technology to ensure transparency and prevent capital controls or exchange rate manipulation.

This technology allows connections to all open decentralized exchanges (DEX) and digital platforms operated by both commercial and central banks worldwide.

The end goal is for everyone to use the Unit for accounting, bookkeeping, pricing, settling, paying, saving, and investing.

Implementation Timeline and Adoption Prospects

The BRICS Business Council has already backed the Unit, and it is on the agenda for the upcoming ministerial meeting in Russia.

The roadmap for its adoption will be discussed at the BRICS+ summit in October 2024 in Kazan.

With the potential for implementation as early as 2025, the Unit presents a feasible technical solution for creating a globally recognized payment and trade system immune to political pressure.

The Bottom Line

The Unit represents a groundbreaking approach to addressing the shortcomings of current centralized monetary systems.

By offering a decentralized, apolitical currency, it promises economic and political benefits for the Global Majority. Its technological innovations and potential for wide-scale adoption position it as a key player in the future of global finance.

Stay tuned! More articles on all of this, and what it means are coming soon.

Supporting article: The coming of a BRICS decentralized monetary system.

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The New Gold Standard: Why Gold and Silver are Winning Over Fiat Currencies: Awake-In 3D

The New Gold Standard: Why Gold and Silver are Winning Over Fiat Currencies

On May 14, 2024   By Awake-In-3D

As economic instability looms, precious metals like gold and silver present a promising refuge against fiat currency devaluation.

In This Article:

• Historic Surge in Precious Metals

• Shifts in Monetary Policy and Interest Rates

• Implications of U.S. Economic Policies

• Financial Risks and Negative Trends Driving Gold and Silver Higher

• Future Projections for Gold and Silver

It isn’t rocket science to understand that, in today’s increasingly volatile economic landscape, the value of gold and silver relative to global fiat currencies has significantly intensified. This trend will continue, if not accelerate, from here on out.

Since October 2023, these precious metals have seen dramatic increases in value, contrasting sharply with the unstable trajectory of fiat currencies.

This article explains the enduring appeal of gold and silver as robust investments, particularly as economic indicators suggest a potential decline in the value of traditional currencies.

Historic Surge in Precious Metals

Gold’s value surged from just over $1,600 in October 2023 to a remarkable $2,300 recently.

Despite a decline in physical gold holdings by Gold Depositories, Gold Funds, and Gold ETFs, and a 96% drop in coin sales from major mints, the price of gold continues its upward trajectory.

This pattern underscores a significant shift as humanity increasingly views precious metals as a safe haven amidst economic uncertainty and fiat currency debasement.

Shifts in Monetary Policy and Interest Rates

The reversal of the U.S. interest rate trend in 2020 marked the beginning of a secular uptrend, with predictions of rates exceeding 10% due to inflation pressures from growing government deficits and debt worldwide.

This scenario places traditional monetary instruments under strain, particularly as central banks face challenges in controlling interest rates amid rampant government debt issuance.

The predicted end to rate cuts further complicates the financial landscape, enhancing the appeal of gold and silver as more stable store of value and purchasing power against falling fiat currency value.

Implications of U.S. Economic Policies

The U.S. economic outlook, likened to a Ponzi scheme, predicts grave financial instability.

With the Congressional Budget Office forecasting that interest costs will surpass defense spending by 2024, reaching $1.6 trillion annually, the U.S. financial situation appears increasingly precarious.

These developments not only threaten the nation’s status as a global power but also elevate the strategic importance of investing in precious metals.

Financial Risks and Negative Trends Driving Gold and Silver Higher

1. US Federal Debt: The current US Federal Debt is around $35 trillion, with projections indicating it could rise to $100 trillion by 2034.

2. Interest Rate Trends: Predictions suggest that interest rates could exceed 10% by 2036 or earlier, reminiscent of rates in the 1970s and early 1980s but with significantly higher debt levels.

3. US Treasury and Sovereign Debt Outlook: There’s an exponential increase in the issuance of US treasuries and most sovereign debts expected, with repayment options ranging from deferral to default.

4. Financial System Stability: US banks have reported unrealized losses on bonds totaling $650 billion, which could worsen with rising interest rates, indicating systemic financial instability.

5. US Treasuries and Sovereign Bonds: The attractiveness of US treasuries and other sovereign bonds is questioned, with a near-certainty of not recovering invested money due to significant devaluation and potential default scenarios.

Future Projections for Gold and Silver

Given the profound shifts in global economic policies, the outlook for precious metals remains highly optimistic.

Historical trends and the ongoing devaluation of fiat currencies suggest that gold and silver will continue to be essential components of investment portfolios.

Countries like Russia, with significant commodity reserves, are poised to recover more swiftly from global economic disruptions, indicating a broader move towards commodity-backed value storage, away from fiat currencies.

The Bottom Line

The case for gold and silver continues to be increasingly compelling.

Their ability to act as a hedge against inflation and currency devaluation, coupled with the growing economic instability and ineffective monetary policies, positions them as prudent choices for safeguarding wealth.

As traditional currency systems face unprecedented challenges, the intrinsic value of gold and silver shines brighter than ever, promising security in our increasingly uncertain future.

© GCR Real-Time News

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Unprecedented: Gold and Dollar Rip Higher Simultaneously as Japan and China Hang in the Balance

Unprecedented: Gold and Dollar Rip Higher Simultaneously as Japan and China Hang in the Balance

On April 11, 2024   By Awake-In-3D

The Global Fiat System is Undoing Itself as the Japanese Yen and Chinese Yuan Hold a Delicate Financial Dance

Fiat currency inflation keeps rising.

Central Banks are losing control while telling us “everything is resilient and robust…”

In spite of rapidly increasing U.S. dollar strength against all major global currencies, gold and silver are defying gravity and all sense of normalcy.

Meanwhile, the Japanese Yen teeters on requiring massive intervention by the government and Bank of Japan.

China is dealing with its own Yuan FX peg management and self-inflicted real estate crisis.

China may have to dump their Japanese Yen reserves and sell off significant US debt treasuries to keep their economy afloat.

We’re not in Kansas any more my dear Dorothy

The Bank of Japan (BOJ) finds itself in an increasingly precarious position, caught in a financial maelstrom of its own making.

Japan’s debt-to-GDP ratio has soared to a staggering 260%, with the central bank holding 70+ percent majority of this government debt.

This situation has placed the Japanese economy on a razor’s edge, balancing between sustaining its import trade costs and managing national inflation, all the while battling a rapidly weakening yen.

The BOJ is faced with a daunting challenge: the only apparent solution to strengthen the yen – raising interest rates – could trigger a catastrophic default on its colossal debt load.

Such a move risks not only domestic financial stability but also has far-reaching implications for global markets.

Complicating matters further is Japan’s intricate economic interdependence with China.

As China confronts its own economic turmoil, notably a massive real estate sector default that threatens to undermine 40% of its GDP, the balance between the yen and the yuan becomes critically important.

If China were to liquidate its Japanese yen reserves in an effort to stabilize its real estate market, the consequences for Japan could be dire.

Such a scenario would not only precipitate a financial collapse in Japan but could also trigger a domino effect, potentially leading to widespread economic contagion affecting the United States and Europe.This all is sounding an alarm, suggesting that the current trajectory of these intertwined economies points towards a broader collapse of the fiat currency system.

This looming financial disaster, they caution, is not a matter of if, but when.

Central Banks are anxiously, hoping for a solution that can avert a catastrophic economic downturn.

Yet, the only path forward is a complete financial and currency reset.

The race to the fiat system collapse is not a sprint … it’s a marathon.

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Is the U.S. on the Verge of Adopting a Beneficial Financial System Reset? Awake-In-3D

Monetary Revolution: The Fed Considers Ditching Fiat Currency For Gold

On April 7, 2024   By Awake-In-3D

Is the U.S. on the Verge of Adopting a Beneficial Financial System Reset?

An unbelievable financial report was recently released outlining mathematically modeled scenarios for moving from Fiat to Gold financial systems.

I couldn’t believe my eyes when I read this Philadelphia Federal Reserve Bank’s February 2024 analysis and Working Paper.

The Fed, a principal overlord of modern fiat debt currency finance, is seriously contemplating a move that seems straight out of history books: bringing back a gold-backed currency for the United States and the global financial system.

How does an economy behave in a historical environment where gold is the international monetary standard? We find that key features of this monetary system are long-run price stability and the nonneutrality of money in the short run. The Philadelphia Federal Reserve Bank Working Paper. February 2024

This isn’t a drill or a speculative thought experiment.

Given the dire predictions for our current fiat currency system, which is not backed by physical commodities and is on a crash course toward certain failure, this old-school idea suddenly makes all the sense in the world.

About the Philadelphia FED’s Surprising Working Paper

In a groundbreaking analysis released by the Philadelphia Federal Reserve Bank in February 2024, a compelling case is made for a significant pivot in the United States’ monetary strategy: the return to a gold-backed currency system.

This detailed examination, rooted in meticulously crafted economic modeling and historical insights, raises critical questions about the sustainability of the current fiat currency system.

The Federal Reserve’s exploration into this territory is not merely an academic exercise but a profound indication of the serious considerations at play to avert a financial system collapse that everyone knows is “mathematically certain and inescapable.”

The study, while complex, digs deeply into the foundational principles of the gold standard, underlining how such a system historically ensured long-term price stability and economic equilibrium.

In essence, the gold standard acts as a self-regulating mechanism for the money supply, linking the issuance of currency directly to gold reserves. This link curtails the propensity for unchecked money printing, a critical flaw in fiat systems that often leads to inflation or worse, hyperinflation.

Understanding the Gold Standard

Allow me to break down what this all means.

The gold standard is a monetary system where a country’s currency has a direct link to gold. So, if you have paper money notes, you can exchange it for a certain amount of gold.

Historically, this system kept economies stable because it prevented governments from printing money willy-nilly, which can lead to inflation or even hyperinflation.

The Fed’s report points out that with a gold standard, we’d likely see a more stable long-term economy, with fewer sudden spikes or drops in prices.

Why This Matters Now

You might wonder, why consider this now? The Fed’s analysis shines a light on three big reasons:

1. Long-term Price Stability: Gold ties the hands of those who print money, ensuring that over time, prices don’t wildly fluctuate. Think of it as a financial thermostat that keeps the economy at a comfortable temperature.

2. Money That Means Something: Right now, if the economy starts to falter, the government can just decide to print more money. Under a gold standard, this wouldn’t be as easy. Money would have real value tied to something physical, and as a result, its impact on the economy would be more predictable and steady.

3. Protection from Economic Storms: The world economy is a complex web of trade and investment. The Fed believes that linking money to gold could act as a buffer against sudden shocks from abroad that can send our economy into a tailspin.

The Challenge Ahead

However, don’t think transitioning back to gold would be easy. It would require a delicate restructuring of international trade, balancing how much gold comes in and goes out of the country.

The Fed’s report is clear-eyed about these challenges. It talks about the need for careful policy planning and international cooperation to manage these complex dynamics effectively.

The very fact that the Fed is even considering this move is a wake-up call. It signals a profound concern about the sustainability of our current financial system.

This isn’t about looking backward with nostalgia. It’s suggests a forward-thinking strategy aimed at preventing a total economic collapse.

View the FED’s working papers in full here:

• https://www.philadelphiafed.org/the-economy/monetary-policy/price-level-determination-under-the-gold-standard

• https://www.philadelphiafed.org/the-economy/macroeconomics/a-model-of-the-gold-standard

• https://www.philadelphiafed.org/the-economy/macroeconomics/the-undoing-of-the-gold-standard

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The Great Fiat Currency Reset: Myth or Inevitable Reality? : Awake-In-3D

The Great Fiat Currency Reset: Myth or Inevitable Reality?

On April 1, 2024  By Awake-In-3D

The prospect of a “Fiat Currency Reset” stirs the pot of financial discourse, promising or threatening to redraw the very lines of our monetary system.

Over the past 15 years, global discussion and expectation of a “Fiat Currency Reset” has emerged as a phoenix rising from the ashes of economic uncertainty.

With central banks and governments worldwide losing control of inflation, currency devaluation, and mounting debts, the question of whether a reset is a mere myth or an inevitable future becomes increasingly pertinent.

The Genesis of the Debate

The idea of a fiat currency reset revolves around the comprehensive overhaul of the global monetary system, specifically the revaluation or devaluation of national currencies not backed by physical commodities.

Unlike the gold-standard era, today’s fiat currencies derive their value from government decree and public trust. However, this trust is under scrutiny as inflation rates soar and debts balloon to unsustainable levels.

Economic Indicators and Potential Triggers

A closer examination of economic indicators reveals troubling signs. Inflation rates in several major economies have reached heights unseen in decades, eroding purchasing power and igniting fears of stagflation. Concurrently, global debt, swelled by plandemic-related spending and expansive monetary policies, has reached a staggering $313 trillion, according to the Institute of International Finance.

Such conditions are ripe for speculation on a fiat currency reset. Historically, economic crises have prompted drastic monetary reforms, from the Bretton Woods Agreement to the Plaza Accord. Today’s triggers could range from a catastrophic debt default by a major economy to a sudden loss of confidence in a leading fiat currency.

Central Bank Policies: Fuel to the Fire?

Central banks find themselves at the epicenter of this debate. Their policies, particularly quantitative easing and low interest rates, have been double-edged swords. While stabilizing economies during downturns, these policies have also inflated asset bubbles and debt levels, raising questions about their long-term sustainability.

The advent of Central Bank Digital Currencies (CBDCs) adds another layer to the discussion. Proponents argue that CBDCs could offer more efficient payment systems and greater financial inclusion. However, critics fear they may grant governments unprecedented control over financial transactions, potentially paving the way for a fiat reset through digital means.

The Role of Gold and Devaluation Trends
Gold has traditionally been a barometer of financial health and a hedge against fiat currency devaluation. In times of economic turmoil, investors flock to gold, driving up its value as confidence in fiat currencies wanes. This dynamic underscores gold’s significant relevance in discussions about a fiat currency reset.

Moreover, currency devaluation trends highlight the vulnerability of fiat money. Countries engaging in competitive devaluation to boost export competitiveness inadvertently fuel a race to the bottom, undermining global financial stability and reinforcing the case for a reset.

Implications for Savings and Investments

For the average person, the prospect of a fiat currency reset holds great uncertainty. Savings and investments denominated in fiat currencies could face significant risks in the event of a reset, from devaluation to conversion into new monetary units. Financial experts advocate for diversified portfolios, including assets less susceptible to inflationary pressures and currency risks, such as precious metals, real estate, and cryptocurrencies.

Surviving a Fiat Currency Reset

Survival strategies in a fiat currency reset scenario emphasize financial prudence and diversification. A growing list of financial planners recommend building a reserve of physical assets, such as gold and silver, and exploring digital currencies as alternative stores of value. Additionally, staying informed about central bank policies and global economic trends is crucial for timely adjustments to financial strategies.

Conclusion: Navigating Uncharted Waters

The debate over a fiat currency reset encapsulates the broader challenges facing the global financial system. While a comprehensive reset remains unpredictable, the underlying economic pressures are undeniable.

In this era of government and central planner fiscal insanity, the prospect of a global fiat currency reset challenges us to rethink our assumptions about money, purchasing power value, and stability.

Whether or not a reset materializes the way we expect, the discussion it sparks is invaluable, pushing all of us to confront the realities of our fiat currency financial system experiment and consider the path forward with positivity, engagement, and courage.

© GCR Real-Time News

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The New Gold Standard? Zimbabwe’s ZiG Currency and Its Quest for Economic Stability

The New Gold Standard? Zimbabwe’s ZiG Currency and Its Quest for Economic Stability

On April 5, 2024
By Awake-In-3D

Gold-Backed and Geared Up: Is ZiG the Solution to Zimbabwe’s Monetary Meltdown? Here’s a factual deep-dive into this revolutionary currency launch.

Zimbabwe’s latest maneuver in its long-standing battle against economic instability is nothing short of revolutionary.

The introduction of the Zimbabwe Gold (ZiG), a new gold-backed currency, marks a bold stride toward economic stabilization and away from decades of monetary turmoil.

As someone deeply entrenched in the analysis of currency and economic trends, I can’t help but view this development through a lens of cautious optimism and perhaps a dash of skepticism.

Here’s my deep-dive into the what, why, and how of new ZiG.

The Reserve Bank of Zimbabwe (RBZ), under the guidance of incoming governor John Mushayavanhu, has rolled out ZiG in various denominations, from the 1 ZiG note to the lofty 200 ZiG note, even including fractional values like a half and a quarter ZiG.

This initiative isn’t just a change of currency; it’s a strategic overhaul aiming to peg the nation’s monetary value (purchasing power) to something as universally valued as gold, alongside foreign currencies and precious minerals.

The Zimbabwean economy has been on a roller coaster of crises for the last 25 years, with the RTGS (Real Time Gross Settlement) currency plummeting in value and inflation rates reaching alarming highs.

The introduction of ZiG is a bid to anchor the economy on the stable and universally recognized value of gold, ensuring that the currency has tangible backing beyond mere government promises.

But how does the RBZ plan to implement this ambitious project?

Zimbabweans are given a mere 21-day window to exchange their old, inflation-ravaged notes for new ZiG currency, a tight time frame that underscores the urgency of the transition.

Moreover, the multi-currency system remains, allowing the ZiG to coexist with the US dollar, which notably accounts for 85% of transactions in Zimbabwe. This inclusivity of foreign currencies alongside the ZiG suggests a much more pragmatic approach to stabilizing the economy while retaining flexibility in transactions.

The crux of the matter, however, lies in whether the ZiG can truly lift Zimbabwe from its monetary and economic abyss.

The promise is there: a currency backed by gold and precious minerals offers a buffer against the hyperinflation that has historically plagued Zimbabwean currency.

Yet, history whispers warnings of past attempts that faltered despite initial optimism. The bond note, introduced with similar hopes, crashed as the government resorted to printing money recklessly.

Despite these cautionary tales, the strategic underpinnings of the ZiG – particularly its backing by a “composite basket of reserves” and its structured implementation through banking systems – present a glimmer of hope.

The insistence on a gold-backed currency, governed by tangible assets rather than the whims of printing presses, suggests a commitment to stability and value preservation.

The setting of the exchange rate for the Zimbabwe Gold (ZiG) currency at US$1 to 13.56 ZiG is a pivotal element in Zimbabwe’s latest attempt at economic reform.

It represents a calculated attempt to bridge the vast purchasing power differential between the beleaguered Zimbabwean dollar and the global benchmark of the US dollar, seeking to offer a semblance of stability and confidence in the new currency.

This strategic peg against the US dollar is intended to ground the ZiG’s value in the international currency market, providing a clear benchmark for both domestic and international stakeholders.

Moreover, by anchoring the ZiG to a defined US dollar rate, the Reserve Bank of Zimbabwe aims to mitigate the rampant inflation and value erosion that has plagued previous currencies, positioning the ZiG as a viable and stable monetary unit in the eyes of the world.

This exchange rate is not merely a financial metric; it’s a worldwide broadcast of Zimbabwe’s commitment to economic stability and a testament to the central bank’s strategic foresight in leveraging the intrinsic value of gold to back its currency.

However, skepticism remains warranted.

Zimbabweans’ trust in their central bank is tenuous, at best, following years of economic mismanagement. Moreover, the external challenges, such as the severe drought affecting the country’s maize production, complicate the ZiG’s potential success.

These factors, combined with the public’s subdued reaction to the ZiG’s launch, highlight the uphill battle facing Zimbabwe’s latest economic strategy.

While the ZiG represents a daring and potentially transformative step towards finally achieving economic stability, its success hinges on the government’s discipline, the central bank’s transparency, and the international community’s reception.

Will the ZiG finally lift Zimbabwe out of its economic quagmire?

Only time will tell.

Supporting articles:

• https://www.bbc.co.uk/news/world-africa-68736155.amp

• https://www.aljazeera.com/news/2024/4/5/zimbabwe-introduces-new-gold-backed-currency-to-tackle-inflation

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Financial revolution or regression? The covert push towards a Central Bank Digital Currency through centralized asset tokenization.

A Wolf in Sheep’s Clothing: The Secret CBDC Agenda Behind Tokenizing All Financial Assets

On March 22, 2024 By Awake-In-3D

In CBDCs and Digital Finance

Financial revolution or regression? The covert push towards a Central Bank Digital Currency through centralized asset tokenization.

In case you missed it, during a conversation with Bloomberg on January 4th, 2024, Larry Fink, the CEO of BlackRock, cast a spotlight on what he perceives as the inevitable future of finance: the tokenization of all financial assets.

We believe the next step forward will be the tokenization of financial assets, meaning that every stock and bond will have its own unique identifier and be recorded onto one general ledger. Every investor, including you and me, will have our own number or identification.

Larry Fink, CEO BlackRock

With conviction, Fink outlined a future where every stock and bond not only boasts its own unique CUSIP identifier but also finds a place on a unified digital ledger.

What is a CUSIP?

A CUSIP (Committee on Uniform Security Identification Procedures) number is a unique identification code assigned to all stocks and registered bonds in the United States and Canada. CUSIP numbers are used by brokers, dealers, clearing corporations, and depositories throughout the securities industry to support the accurate and efficient clearing and settlement of securities, as well as in reporting and record-keeping activities.

The implications of this shift are monumental, yet beneath the surface, there’s a narrative unfolding that suggests a move towards something much larger – a Central Bank Digital Currency (CBDC), albeit cloaked in the guise of modernization and efficiency.

Let’s break down Fink’s vision into simpler terms.

Imagine a world where every financial asset you own is transformed into a digital token, a kind of virtual representation that lives on a blockchain.

This isn’t just about making things digital – we’ve had digital banking for decades. No, this is about fundamentally changing the way these assets are recorded, traded, and owned.

Each of these tokens would be as unique as a fingerprint, tied to a massive, all-seeing ledger that tracks who owns what in real-time.

Here’s where the bait-and-switch scenario deepens.

By centralizing financial assets onto a single ledger, we edge closer to a system that mirrors the characteristics of a Central Bank Digital Currency.

For the uninitiated, a CBDC is a digital form of a country’s fiat currency, issued and regulated by its central bank.

The concept may sound benign or even beneficial at a glance, promising increased efficiency, reduced illicit activities, and a more inclusive financial system.

However, the shift towards a ledger-centric financial world, as posited by Fink, carries with it dystopian implications for privacy, autonomy, and control.

The adoption of a ledger-centric system, underpinned by the principles of tokenization, could be the trojan horse for CBDCs, sneaking under our radar in the guise of technological progress

A single (central or unified) ledger, particularly one with ties to or under the influence of central banking systems, could provide unprecedented oversight over individuals’ financial transactions.

This could potentially lead to a scenario where financial privacy is significantly eroded, as every transaction becomes an open book to certain eyes.

Moreover, the idea that this system could serve as a foundation for CBDCs isn’t far-fetched – even if it isn’t named or designated as a CBDC.

With assets tokenized and centralized, the leap to a government-issued digital currency that operates within this framework is short and straightforward. Such a move could herald a new era of monetary policy, where central banks have direct control over the money flowing in and out of individual wallets.

Critically, this isn’t just about what we stand to gain – instant settlements, enhanced efficiency, and the democratization of financial strategies. It’s also about what we might lose.

The adoption of a ledger-centric system, underpinned by the principles of tokenization, could be the trojan horse for CBDCs, sneaking under our radar under the guise of technological progress.

I recognize the transformative potential of tokenization and the efficiencies it can bring to the financial sector.

However, we must also be wary of the broader implications.

The path towards a single ledger system could very well be the path to a centralized digital currency, changing the face of financial privacy, autonomy, and control in the digital age.

Transcript of BlackRock CEO, Larry Fink Interview

“We believe the next step forward will be the tokenization of financial assets, meaning that every stock and bond will have its own unique identifier (CUSIP) and be recorded on one general ledger. Every investor, including you and me, will have our own number or identification. This approach could rid us of all issues surrounding illicit activities related to bonds and stocks by digitalizing them through tokenization. More importantly, tokenization allows for the customization of strategies to fit every individual. We would benefit from instantaneous settlement, considering the current costs associated with settling bonds and stocks. If everything were tokenized, transactions would be immediate, as each would simply be a line item on the ledger. We believe this represents a technological transformation for financial assets.”

“Another aspect worth discussing is voting and the choices it entails. If we know at every moment who the owner of a stock is, then when it’s time to vote, every individual owner can be identified and allowed to vote their own shares. This raises the question: Is this the end of mutual funds? While many people might consider mutual funds merely a wrapper, it’s not the end of them. However, I would argue that the dominant form of bringing products to market going forward will likely be in the form of ETFs (Exchange Traded Funds).”

Watch the Bloomberg interview with Larry Fink here:

https://youtu.be/HTveRlW7QPo

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Gold or Bitcoin: Which Will Survive the Imminent Fiat Currency Apocalypse? : Awake-In-3D

Gold or Bitcoin: Which Will Survive the Imminent Fiat Currency Apocalypse?

On March 19, 2024 By Awake-In-3D

In CBDCs and Digital Finance, Fiat Debt System Collapse

When Monetary Titans Collide in the Creation of a Superior Monetary System

WHAT’S IN THIS ARTICLE:

• Bitcoin’s historic value milestone compared to gold.

• The intriguing battle for dominance between gold and Bitcoin.

• Predictions on the fall of fiat currency and rise of hard assets.

• The revolutionary potential of a gold-backed digital currency: Golden Bitcoin.

Two superior assets stand tall in their quest for dominance: gold, the ancient standard of value, and Bitcoin, the preeminent digital disruptor.

In April 2017, Bitcoin reached a monumental milestone, achieving parity with gold, and it has since soared to require over 30 ounces of gold to buy a single Bitcoin.

This signals not just a shift, but a revolution in how we perceive value.

A Tale of Two Competing Assets

Gold and Bitcoin’s journey from obscurity to prominence is a tale as old as time, yet as new as the technology that powers Bitcoin.

With Bitcoin’s market cap escalating by over $883 billion last year alone, and annual gold production valued at about $254 billion (approximately 118 million ounces per year), the scale of Bitcoin’s ascent is not just impressive; it’s historic.

Yet gold’s centuries-tested store of value, as a tangible asset you can hold in your hand, offers a competitive advantage that cannot be ignored.

What Is Money, Anyway?

Money, in its essence, is a medium for storing and exchanging value.

Contrary to the convoluted theories peddled by academia and media, understanding money is straightforward. It’s something that retains value over time and space.

Today, we find ourselves at a critical crossroads where fiat currency, gold, and Bitcoin vie for the title of the best vehicle for preserving and exchanging value.

The Fall of Fiat and the Rise of Hard Assets

As we anticipate the imminent extinction of fiat currencies, the question isn’t if, but when.

With an estimated $96 trillion stored in global fiat currencies, the colossal shift towards more stable store-of-value assets like gold and Bitcoin is inevitable.

This shift heralds a new era, one where the reliance on tangible and digital assets becomes paramount as the fiat system crumbles.

Evaluating the Contenders for a Future Currency

The competition between gold and Bitcoin is fierce. Gold, with its millennia-long history as a reliable store of value, faces off against Bitcoin, a digital currency that offers unparalleled security and growth potential.

This battle isn’t just about which asset performs better; it’s about redefining what we consider money. With Bitcoin’s market cap experiencing a more than threefold increase over the value of global gold production last year, the stakes have never been higher.

The Ultimate Showdown: Gold vs. Bitcoin’s Future

Predicting the victor in the gold versus Bitcoin debate is a challenge, filled with variables and uncertainties.

However, the implications of either asset becoming the dominant form of money are profound.

If Bitcoin outshines gold, it could fundamentally alter the global economic landscape, catapulting Bitcoin to a position of unrivaled financial dominance.

Market Dynamics and the Path Forward

The alignment of market forces indicates a potential surge in Bitcoin’s value.

With Bitcoin’s market cap already roughly equivalent to 9% of gold’s $14 trillion market cap, a tenfold increase in Bitcoin’s value could position it on par with gold.

This isn’t just speculation; it’s a possibility grounded in Bitcoin’s history of exponential growth and the increasing interest from corporations, investors, and nation-states.

Free Market Decides: The Best Money Wins

In the end, the free market will crown the ultimate form of money. Through trillions of transactions and the collective decision-making of billions of people, the superior asset, whether it be gold or Bitcoin, will emerge.

This isn’t just about financial gains; it’s about setting the stage for a future where the best money facilitates global economic stability and growth.

But What About A Gold-backed Bitcoin Hybrid?

Now imagine the emergence of a new monetary asset that seamlessly blends the enduring value of gold with the cutting-edge potential of Bitcoin.

This hybrid asset, let’s call it Golden Bitcoin, represents a revolutionary step forward, uniting the best monetary attributes of both physical gold and Bitcoin into a singular form of money.

The Stability of Gold Meets Digital Innovation

At its heart, Golden Bitcoin proposes a revolutionary concept: each unit of this digital currency is backed by a specific amount of physical gold.

This backing ensures that Golden Bitcoin inherits gold’s tangible value and historical reliability as a store of wealth, addressing one of the primary criticisms of cryptocurrencies—their volatility and lack of intrinsic value.

By anchoring itself in gold, Golden Bitcoin offers a stable and trustworthy foundation, appealing to those wary of the often turbulent crypto markets.

The Best of Both Worlds: Currency Security and Portability

Golden Bitcoin capitalizes on gold’s reputation as a safe haven asset while embracing the technological advantages of Bitcoin.

This combination ensures unparalleled security, leveraging blockchain technology to provide a tamper-proof and transparent record of ownership, free from the manipulation risks associated with traditional fiat currencies.

Moreover, Golden Bitcoin inherits Bitcoin’s portability and divisibility, enabling seamless global transactions without the physical limitations of transporting gold.

This hybrid asset thus promises a level of convenience and efficiency that neither gold nor traditional Bitcoin can offer on their own.

A New Era of Monetary Sovereignty

The creation of Golden Bitcoin symbolizes a significant leap towards monetary sovereignty for individuals.

By melding gold’s historical significance as money with Bitcoin’s digital autonomy, Golden Bitcoin empowers users with unparalleled control over their wealth.

This new form of money is not only resistant to inflation and devaluation by governments but also enables direct, peer-to-peer transactions across borders, bypassing the need for intermediaries and reducing transaction costs.

Financial Inclusion and Stability: No Bank Account Required

The advent of Golden Bitcoin has the potential to catalyze a new era of financial inclusion and stability.

By providing a digital currency that is both easy to transact with and fundamentally backed by a universally recognized store of value, Golden Bitcoin can bridge the gap between traditional banking systems and the digital economy.

This inclusivity could bring financial services without the need for bank accounts worldwide, offering them a stable and accessible form of money.

Contributing article: https://internationalman.com/articles/gold-vs-bitcoin-the-ultimate-competition-to-be-the-worlds-best-money/

© GCR Real-Time News

Visit the GCR Real-Time News website and search 100’s of articles here: Ai3D.blog
Join my Telegram Channel to comment and ask questions here: GCR_RealTimeNews
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https://ai3d.blog/gold-or-bitcoin-which-will-survive-the-imminent-fiat-currency-apocalypse/

The $21 Trillion RV Question: Iraq’s Economic IQD Dilemma and the Gold Solution: Awake-In-3D

The $21 Trillion RV Question: Iraq’s Economic IQD Dilemma and the Gold Solution

On March 18, 2024  By Awake-In-3D

From Economic Impossibility to Golden Opportunity: The Path Forward for the RV of the Iraqi Dinar

I tremendously enjoy engaging with my subscribers at GCR Real-Time News.

The questions raised and the discussions held around currency revaluations, particularly concerning Iraq’s dinar (IQD), provide for compelling conversation on the limitations of fiat currencies and the potential for a shift towards a gold-backed monetary system.

As countries assess and plan realistic strategies to combat today’s growing fiat economic and monetary uncertainties, the conversation about the nature of currency value, the impact of oil revenues, and the feasibility of significant currency revaluations serve as both informative and relevant.

Here’s the summary breakdown of a recent conversation thread on GCR Real-Time News.

The Iraqi Dinar RV Conundrum

At the heart of the debate is Iraq’s consideration of revaluing its currency, the IQD, potentially to $3.00 (or higher) against the U.S. dollar, a move that poses significant mathematical and economic challenges.

With an estimated 7 trillion (or more) IQD notes held outside of Iraq, a revaluation (RV) at such a rate would require an unfathomable $21 trillion ($3.00 x 7 Trillion IQD) fiat Dollars to fund the RV.

A sum far beyond Iraq’s current financial capacity, generated primarily through its oil trade revenues of around $100 billion per year at current oil prices. It would take Iraq centuries to pay for a $3.00 RV exchange rate at Iraq’s current and future production capacities. No Oil Contracts or economic development project investments scenario gets Iraq to $21 Trillion in the near or long term.

Iraq produces around 4.2 million barrels of oil per day combined with constant geopolitical instabilities. The USA produces over 13 million barrels per day.

This stark reality highlights the inherent limitations of fiat currencies, which are not backed by physical commodities like gold but only by public confidence and a government’s declared ‘promises’.

The Gold-Backed Purchasing Power Solution

The potential solution lies in transitioning to a gold-backed currency system, a concept currently being explored by the BRICS nations as they seek to introduce an alternative to the fiat currency system dominated by Western economies.

A gold-backed currency promises enhanced stability and purchasing power, directly challenging the existing fiat system’s dominance.

If Iraq, Vietnam, Indonesia, Malaysia, etc., are accepted into BRICS, their currencies would participate in the new BRICS gold-backed common trade currency and financial system.

In other words, the IQD, VND, etc. would significantly gain purchasing power (exchange rate) against the Dollar, Euro, and other major fiat currencies.

So why can’t Iraq just peg the IQD to a high dollar exchange rate like Kuwait, Oman and Bahrain do?

Because unlike the other high-rate currencies in the region, Iraq has the unique problem of having over 7 trillion (or more) in IQD being held outside of Iraq by foreigners like you and me.

Kuwait, Oman and Bahrain do not have a fraction of their currencies being held by foreigners as does Iraq. This is why these other countries can maintain their high fiat exchange rate peg to the US Dollar. Iraq simply cannot repeg the fiat IQD value (purchasing power) with that many IQD held around the world.

The Ripple Effect of a Gold-Backed System

Should a gold-backed currency system come to fruition, the implications become financially significant, forcing Western economies to reconsider their fiat monetary policies and potentially launch their own gold-backed currencies in order to stop their old currencies from massive devaluation.

This shift could dramatically increase the purchasing power of currencies from Iraq and other countries like Vietnam, Indonesia, Malaysia, and Zimbabwe, making a revaluation of the IQD both mathematically and economically viable.

The key would be the relative devaluation of fiat currencies like the U.S. dollar against new gold-backed currencies, fundamentally and forever altering the global economic landscape.

In other words, the increase in the IQD’s purchasing power (exchange rate) would originate from the depreciation of the US Dollar vs. the gold-backed IQD – not from the IQD suddenly gaining purchasing power out of thin air (because it can’t).

There are not enough oil contracts or native economic development value-generation within Iraq’s realistic capability that could support (pay for) a fiat IQD revaluation to $3.00+ against the current fiat dollar.

Basically, $21 Trillion dollars rivals the total GDP of the entire United States. Let that sink in…

The Re-denomination vs. Revaluation Debate

Iraq’s ongoing strategy to re-denominate the IQD, removing three zeros from its notes, illustrates the difference between re-denomination and revaluation.

While re-denomination is a superficial change affecting the currency’s appearance and public perception (confidence), revaluation alters the currency’s actual purchasing power.

The Iraqi Ministry of Finance (MoF) and the Central Bank of Iraq’s consideration of this strategy underscores the complexities of currency management and the pursuit of public confidence in the IQD.

The Global Context and the Future of Fiat Currencies

The discussion extends beyond Iraq, touching on the broader dynamics of the global financial system, the role of free-floating currencies, and the managed pegs that stabilize many oil-dependent economies.

The possibility of transitioning to a gold-backed system raises questions about the sustainability of fiat currencies and their future in a world looking for more stable and reliable monetary foundations.

As all of us in the RV/GCR community seek to freely and openly discuss these issues, the situation in Iraq serves as a critical point of analysis for the future of the global financial system as a whole.

Sidebar of topics discussed at GCR Real-Time News Telegram Channel:

1. Estimated IQD Notes Held Abroad: 7 trillion IQD, as reported by Iraq’s Ministry of Finance.

2. Hypothetical RV Rate: If Iraq revalues (RVs) the IQD to $3.00 against the U.S. dollar.

3. Total Dollar Requirement for Hypothetical RV: $21 trillion (7 trillion IQD x $3.00).

4. Iraq’s Annual Oil Revenue: Approximately $100 billion at current oil prices.

5. Time Required to Cover RV Cost with Oil Revenue: Over 210 years, assuming 100% of Iraq’s annual oil revenue is dedicated to funding (paying for) the RV.

6. Current Exchange Rate Perception Issue: If Iraq re-denominates by deleting 3 zeros from the currency, 1 IQD equals 1.310 per dollar, compared to the less favorable current rate of 1310 IQD per dollar. But the purchasing power of the IQD remains unchanged.

7. Major Free-Floating Currencies: Dollar, Euro, British Pound, Swiss Franc, Japanese Yen, Russian Ruble, Indian Rupee, among others. These countries have highly diverse economies (their GDPs are not dependent on a single industry or service).

8. Countries with Pegged Currencies: China, Kuwait, Oman, Saudi Arabia, Bahrain, Singapore, Hong Kong, Iraq, and many others emphasizing the prevalence of stable, managed currency pegs and floats among oil-dependent, or less diverse economies.

9. Economic Dependency on Oil: The majority of GDP for many pegged/managed currency countries comes from oil revenues, highlighting the risk and volatility in oil markets if these countries utilized a free-floating currency exchange rate system.

The shift towards a gold-backed currency system could herald a new era in finance, challenging the status quo and offering a path toward greater economic stability and equity among nations.

The journey from fiat to gold-backed currencies is most certainly fraught with challenges and uncertainties, yet the potential rewards could redefine the essence of monetary value in the near future.

© GCR Real-Time News

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https://ai3d.blog/the-21-trillion-rv-question-iraqs-economic-iqd-dilemma-and-the-gold-solution/

How to Accurately Think About Our RV/GCR Exchange Rates : Awake-In-3D

How to Accurately Think About Our RV/GCR Exchange Rates

On March 14, 2024 By Awake-In-3D

In RV/GCR

Transitioning from ‘Holding Currency’ to ‘Holding Value’ Requires a Totally New Financial Mindset

Author’s Note: This article is written from an American and US Dollar perspective. However, it applies to any country and fiat currency just the same.

If you are reading this article, you likely consider fiat currency as the biggest scam and scourge on humanity. It’s likely the reason you are aware of and participating in the RV/GCR itself.

Yet, we hold a constant desire to determine and discuss the exchange rates for the various GCR assets that we own in today’s fiat currency system.

When thinking about this further, one begins to quickly realize that trying to ascertain RV/GCR exchange rates in fiat currency terms simply makes no sense. Especially when we believe that the GCR will convert currencies to asset-backed valuations while leaving fiat currencies in the dust.

Also see: How I Understand the GCR Redemptions TIER Structure and Purpose

The most accurate method of considering exchange rates is not by interpreting them in fiat dollars, but instead through a mindset of what our resulting purchasing power will be after our exchange transactions.

Living a Lifetime of Fiat Currencies

Born into a world where the price of everything from your morning coffee to the cost of a home is thought of in fiat dollars, it’s easy to overlook how the value of those dollars changes over time.

From childhood allowances to our first paychecks and major investments, our financial milestones have been measured in a currency that exists only by government decree, not backed by anything real or tangible.

This fiat currency system, where dollars reign supreme, has sculpted our understanding of value, teaching us to gauge wealth and affordability in terms that change as frequently as the wind.

Yet, within this familiar framework, we’ve seldom paused to question the enduring strength of our fiat dollars, rarely considering that their buying power consistently diminishes over time.

Also see: An Objective Look at Potential Release Scenarios for a GCR

The concept of pricing everything—from daily bread to dream homes—in endlessly devaluing fiat dollars has been second nature, leaving us unprepared for thinking in terms of true purchasing power.

As we stand on the cusp of a monumental shift towards a gold-backed foreign currency, we are challenged to unlearn these ingrained financial reflexes and to understand that the rules of the game are changing.

No longer can we afford to think of currency value and exchange rates solely in the terms of the fiat system we know so well.

The introduction of a currency that is directly tied back to the tangible value of gold invites us to rethink not just financial security, but how we perceive the very foundation and measurement of prosperity.

We all hold various foreign currencies that are on a path towards achieving gold-backed purchasing power.

The exact process and steps getting us to the point of exchanging these currencies are unpredictable. They are also evolving and adapting to a rapidly changing geopolitical and economic landscape.

This pivotal change, pegging 1 currency unit to 1 ounce of gold (for example), promises to redefine the landscape of purchasing power and wealth preservation for its holders.

As this currency evolves from its fiat roots to a value firmly anchored in gold, understanding the implications regarding exchange rates vs. purchasing power is crucial.

The Fiat to RV/GCR Transition Explained

A gold-backed currency is directly tied to a tangible asset: gold. For a foreign currency soon to be backed by gold, each unit will equate to an ounce of gold (or perhaps grams, etc.).

Given gold’s current value at approximately $2,100 per ounce, the intrinsic worth of each unit of this currency will reflect the value of gold itself.

Also see: Calls for Gold-backed Dollar on the Rise Across USA

The value (purchasing power) of gold vs. fiat dollars is likely to be much higher that $2,100/oz. as the RV/GCR rolls out. I personally do not believe there will be a gold-backed US Dollar in place when the RV/GCR exchanges begin, but this is a topic for another article.

This shift from a fiat system, where currency value is dictated by government regulation and market perception, to a gold standard, where value is tangible and measurable, marks a significant departure in how we understand and utilize money.

For all of us holding this foreign currency, the transition to a gold-backed standard is a watershed moment.

With the transition to gold backing, each unit of the unit of the foreign currency now embodies a stable asset known for its resilience against inflation and centralized monetary policy manipulation.

An Example of Gold’s Enhanced Purchasing Power vs. Fiat Dollars

One of the most immediate impacts for holders is the enhanced purchasing power of their foreign currency backed by gold.

Let’s consider a practical example of purchasing a property valued at $1,000,000.

In 1971, the price of gold (measured in fiat dollars) was $40 per ounce.

At this rate, purchasing a property worth $1,000,000 would require 25,000 ounces of gold.

Fast forward to 2024, and the scene has dramatically changed: gold now stands at $2,100 per ounce.

This means the same $1,000,000 property can be bought for just 476 ounces of gold instead of 25,000 ounces.

In essence, the value of gold as a store of purchasing power has not changed, it is the fiat dollar that has substantially depreciated against one ounce of gold over time.

Also see: Peril of Fiat Currencies | A History Repeated

Moreover, if someone had the foresight to store away that same 25,000 ounces of gold back in 1971, this very same 25,000 ounces could purchase a property valued at $52,500,000 or 52 separate properties priced at $1,000,000 fiat dollars each.

This scenario isn’t just a financial fantasy; it underscores a crucial reality about value, purchasing power, and the nature of real money.

Fiat currency is not real money. Gold is.

The example of gold versus the fiat dollar since 1971 serves as a powerful lesson in purchasing power vs. price.

Also see: After 51 Years the Global Fiat Currency System is Due for a Grand Reset

However, when the RV/GCR occurs, the purchasing power of gold vs. fiat dollars will not happen over 50 years, it will happen very quickly.

While we are totally accustomed to thinking in fiat dollar terms—watching prices rise and attributing it to the cost of goods increasing—the real story is that fiat currencies constantly decrease in value.

Consequently, trying to determine what fiat dollar exchange rate one will receive within the RV/GCR is realistically a useless mental exercise.

Like monetary apples and oranges.

Gold, by contrast, is remarkably stable as a store of value. Its price in dollars may fluctuate, but its purchasing power—what it can buy in real terms—has significantly increased.

This divergence offers a critical perspective: what if we’ve been thinking about RV/GCR exchange rates all wrong?

The fiat dollar price doesn’t matter. It’s how much purchasing power will we have after our exchanges.

Exchange Rates and Wealth Preservation

The exchange rate between this new gold-backed currency and the US dollar will reflect not only the current value of gold but also the comparative strength of the dollar.

For holders, this means their currency is not just a medium of exchange but a significant store of purchasing power rooted in gold.

The shift towards a gold-backed currency presents a paradigm shift for holders of this foreign RV/GCR currency.

Also see: Real Money | Why Our Fiat Currency System is Ending

It represents a move towards stability, purchasing power, and a redefined approach to financial health.

We all stand at the forefront of a financial renaissance, armed with the enduring value of gold in an age of digital transactions and fiat currency debasement.

Understanding the full scope of this transition is essential for leveraging its potential to the fullest.

© GCR Real-Time News

Visit the GCR Real-Time News website and search 100’s of articles here: Ai3D.blog
Join my Telegram Channel to comment and ask questions here: GCR_RealTimeNews
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https://ai3d.blog/how-to-accurately-think-about-our-rv-gcr-exchange-rates/

$223 Trillion Bank Derivatives Domino Effect: The Catalyst for Fiat Currency Collapse : Awake-In-3D

$223 Trillion Bank Derivatives Domino Effect: The Catalyst for Fiat Currency Collapse

On March 12, 2024 By Awake-In-3D

In Fiat Debt System Collapse

Massive Credit Derivatives Gambling and the Risk of Systemic Bank Failures: What You Need to Know

As the global fiat currency debt system reaches it logical conclusion, the term “derivatives” might not mean much to the everyday person.

However, these complex financial instruments play a pivotal role in the global fiat currency financial ecosystem, often acting as the invisible threads that could either weave stability or unravel chaos.

Wall Street has a history of blowing up things with derivatives. Merrill Lynch blew up Orange County, California with derivatives.

Some of the biggest trading houses on Wall Street blew up the giant insurer, AIG, with derivatives in 2008, forcing the U.S. government to take over AIG with a massive bailout.

Recent data from the Office of the Comptroller of the Currency reveals that five major bank holding companies—names like JPMorgan Chase, Bank of America, and Goldman Sachs—currently hold a staggering 83% of the $268 trillion in derivatives in the U.S. market.

The concentration of derivatives trading among a handful of major banks poses significant concern that has far-reaching consequences for all of us.

What are Derivatives?

Derivatives, in essence, are financial contracts whose value is derived from the performance of an underlying asset, index, or interest rate.

They can range from the relatively straightforward to the mind-bogglingly complex, and are used for a variety of purposes including hedging risk, speculation, and arbitrage.

While these instruments can be useful financial tools, their misuse or mismanagement poses a significant risk to the financial system at large.

Key Financial Facts About Banks and Derivatives Today

1. Total Derivatives Held by Five Major Bank Holding Companies (2009): $277.57 trillion

2. Percentage of All U.S. Derivatives Held by These Companies (2009): 95%

3. Total Derivatives in the U.S. (2023): $268 trillion

4. Total Derivatives Held by the Same Five Companies (2023): $223 trillion

5. Percentage of All U.S. Derivatives Held by These Companies (2023): 83%

6. Control of Credit Derivatives by These Companies: 96%

7. Total Credit Derivatives Held by These Companies: $5.8 trillion out of $6 trillion

8. Federal Reserve’s Cumulative Loans to Wall Street Banks (2007-2010): $16 trillion

A stark reminder of this risk came during the financial crisis of 2007-2010, widely regarded as the worst since the Great Depression.

The crisis spotlighted how derivatives, largely unregulated and concentrated in the hands of a few major banks, could exacerbate financial turmoil.

Despite subsequent regulatory efforts, such as the Dodd-Frank Act of 2010, intended to rein in the risky behaviors of these financial behemoths, concerns persist about the effectiveness of these regulations.

Recent data from the Office of the Comptroller of the Currency reveals that five major bank holding companies—names like JPMorgan Chase, Bank of America, and Goldman Sachs—currently hold a staggering 83% of the $268 trillion in derivatives in the U.S. market.

Even more alarming is their control of 96% of the most perilous form of derivatives: credit derivatives, amounting to $5.8 trillion.

For the everyday person, the implications are clear: the health of the global financial system is inextricably linked to the shadowy world of derivatives trading by major banks.

This concentration of high-risk financial activity in a handful of institutions not only poses a systemic risk but also magnifies the potential fallout from mismanagement or market downturns.

The Federal Reserve’s intervention during the last financial crisis, funneling $16 trillion in loans to support these banks, underscores the precariousness of this situation.

While such measures may provide temporary relief, they do not address the underlying issue: the colossal risk posed by the concentrated trading of derivatives.

Moreover, the counterparty risk—the question of who stands on the other side of these derivative trades—is a blind spot for the average investor.

With a web of connections linking banks to non-bank financial institutions, corporate entities, and beyond, the ripple effects of a derivatives crisis could touch nearly every corner of the global economy.

In response, federal regulators have proposed stricter capital rules for banks heavily engaged in derivatives trading. Yet, these proposals have met fierce resistance from the banking sector, casting doubt on their implementation and effectiveness.

For the everyday person, the implications are clear: the health of the global financial system is inextricably linked to the shadowy world of derivatives trading by major banks.

As these financial titans engage in casino gambling on the high wire of high-risk trading, unintended consequences of a domino collapse effect is a threat not just to themselves, but to the global financial system at large.

© GCR Real-Time News

Visit the GCR Real-Time News website and search 100’s of articles here: Ai3D.blog
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https://ai3d.blog/big-bank-223-trillion-derivatives-domino-effect-a-catalyst-for-fiat-currency-system-collapse/