"Chatter and News" From TNT Sunday Evening 3-27-2022

TNT:

KaseyKo1:  Been reading a lot of recent tweets coming out of Iraq & I just truly don't know what to think about these people. It's sounding like there is some legislation being worked on that if any parliament member misses 3 sessions, they will be booted out of parliament & their immunity removed. Hummmm....wonder how that will work out.  Appears that Maliki's camp is really pulling out all the stops to keep the session from happening Wed.

GraceRenewed:  I think it is beyond ridiculous that they can’t do one right thing for their country. My heart aches for their people

KaseyKo1:  I'm actually hoping that we're just seeing a lot of smoke & mirrors right now. It appears the session on Mon was for a 2nd reading of a draft bill addressing the emergency need of food svcs for the Iraqi people. Possibly for RV coming quickly?

KaseyKo1:  I'm optimistic on this front. I'm thinking it makes sense that they would have gotten their parliament into place & sworn in on Sat, if they were looking to pass a law & possibly open the budget, which would reflect the new rate. I know, I know, wishful thinking! But I'm hopeful, nonetheless!

Yada:  Agreed kaseyko,,,,the forming of the committees is anticipation of the president being voted in and the Framework do not want to lose their leverage with parliament desolved,,

KaseyKo1:  Thanks for reminding me of the point, yada. I had forgotten that the Framework is acting quite desperate, in they're not wanting to dissolve the parliament so as not to lose their leverage.

CharlieOK:  The problem is having to rely on ANY article of news coming out of Iraq. I am mostly hopeful that we may see it "soon" because of the drastic needs throughout the world. Perhaps the CBI will "just do it" and the ptb can stay on top of making sure the political crooks in Iraq won't steal too much of the money.

KaseyKo1: I hear what you're saying, CharlieOK, I just hope they don't have to stay with the "status quo" for the sake of the Iraqi people. That would be a travesty after everything they've gone through to get to this point.

KaseyKo1:  I just can't imagine that the PTB would allow that to happen. What's concerning to me is if it gets back to the point of possible sanctions being placed back on to Iraq for non-compliance issues. Good grief! (Sigh)

CharlieOk:  I like your point about the finance committee. Perhaps that will help the CBI get "with it". The laws of Iraq seem designed for stalemate. Perhaps Iraq is as secure as it is going to get. Hope it is enough.

Yada:  The finance committee will work with the CBI when the time to release takes place. Notice, as Kadzimi had stated, those are willing to work within the new government will be given positions of authority. The committee is complete and none of the Framework distractors are there to stop what the CBI is about to do.

CharlieOK:  That's a definite high five. Hope that's right.

KaseyKo1:  Great point, yada, "The committee is complete and none of the Framework distractors are there to stop what the CBI is about to do." I hadn't thought about it in those terms.

Fitzgerald:  WELL IT APPEARS THAT THE RATE IS NOW DESTINED TO HAPPEN NOW…IF THE ONLY REAL COMPONENT THAT MATTERS IS THE NEWLY SEATED MINISTRY OF FINANCE

KaseyKo1:  Well, Fitz, if the PTB were trying to pull a fast one & put attention on the president & prime minister instead of the finance committee, appears they were successful.

Saltair:  Pollyanna thought here:   Referring to Kasey, Yada and CharlieOK's discussion: I loved the "tweet" Kasey mentioned re: if a Parl member missed 3 sessions, out they go! Vote mtng is Wed but Parl working M and T, members missed the Sat session...Why schedule the vote many days out, but to SNEAK in the vote on any day the quorum is there? Who knows they may call for the vote IF 220 members are present on any of those day???? Over and out!

Annie68:  Love your thought about sneaking the vote in! It would be genius! Lol…Does this come under "where there's a will there's a way?"

KaseyKo1:  Good evening, saltair! Good point. It worked with getting parliament seated without Maliki's interference from what I understand.

************

CandyKisses:  A rise in Iraq’s oil exports to America in a week

Baghdad/The Obelisk: 

The US Energy Information Administration announced, on Sunday, March 27, 2022, that Iraqi oil exports to America increased significantly during the past week, reaching an average of 489,000 barrels per day.

The administration said in a report that "the average US imports of crude oil during the past week from nine countries amounted to 5867 million barrels per day, an increase of 334,000 barrels per day compared to the previous week, which amounted to 5533 million barrels per day."

And she added, "Iraq's oil exports to America amounted to an average of 489,000 barrels per day during the past week, up from the previous week, in which the average exports amounted to 161,000 barrels per day."

She noted that "most of America's oil revenues during the past week came from Canada, at a rate of 3.806 million barrels per day, followed by Mexico at a rate of 641,000 barrels per day, then Saudi Arabia at a rate of 534,000 barrels per day, then Brazil at a rate of 150,000 barrels per day, and then Ecuador. an average of 103,000 barrels per day.

According to the administration, "the amount of US imports of crude oil from Colombia amounted to an average of 72,000 barrels per day, and from Russia at a rate of 70,000 barrels per day, and Nigeria at a rate of two thousand barrels per day, while America did not import any quantity from Trinidad and Tobago."

************

Tishwash:  The Chinese yuan in the Gulf..the dollar is falling..the game has begun

Whoever said that the keys to the economy will not be able to open the locks of politics and its doors that are entrenched behind treaties, agreements and alliances that make the economy a gateway to major geopolitical changes that overthrow the existing ones, so that the game begins with new conditions and new players in the fundamentals supported in the political systems and their alphabets that neither a permanent friend nor a permanent enemy, but .Common interests

Those interests, which began to draw the features of the alliances of countries and the strategies of their economies, may make them rethink their decisions and their political mixes in a new way, drawing a political map in different colors. The monetary process of their countries with the movement of the dollar has begun. This dependence has begun to falter in its steps and avoid going on an unknown path caused by economic consequences associated with a .political and military defeat for that pole that may even topple its economy

What was recently rumored about the intention to have an agreement for the Chinese yuan to enter the Saudi oil markets, which may open the door for it to enter other Gulf markets, may be a real start to break the Saudi riyal’s partnership with the US dollar, with preludes suggesting a political divergence that begins with the dissolution of Saudi .monetary dependency on the US dollar Saudi Arabia’s attempts to price some of its oil sales in yuan to China gives credibility to this Gulf country’s intention to establish a new economic system that depends on its income on diversification of currency sources and away from that frightening political influence that America was exercising on the Gulf states in order to engage in proxy wars, .even if it was economic for the interest USA

What the Wall Street Journal reported on Saudi Crown Prince Mohammed bin Salman’s rejection of an American request to increase oil production to reduce global prices in light of the rise that accompanied the Russian invasion of Ukraine suggests that oil may regain its role in being an effective weapon in the war as it was used Weapons in the October War of 1973, and the newspaper confirms that Mohammed bin Salman refused to make a phone call with US .President Joe Biden, which confirms the emergence of an economic crisis that will be followed by a political one

Riyadh began to recalculate, especially after the shameful American withdrawal from Afghanistan and leaving this country an easy prey for extremists and handing them the reins of government, which was fighting them even in the mountains and caves of Afghanistan. She was the one who was believed to be the world's policeman, so that the .picture became clear that this policeman was nothing but a poor old man

The Chinese yuan will enter the Gulf markets sooner or later due to Beijing’s attempts to persuade Riyadh to pay the Chinese yuan in exchange for Saudi oil. Reducing the impact on the US sanctions and their economic damage, especially since the indicators suggest the hypothesis of an increase in the supply of US money to face future . .challenges and fear of economic collapses for countries ruled by the dollar

In the end, the political game began with economic headlines accompanied by events of political and economic significance that would not be lost after Bashar al-Assad visited the United Arab Emirates, and this challenge from both sides to the American annoyance and discontent with this visit, which suggests that this Gulf country has .departed from the authority of the American decision and an attempt to get closer to the head of the Syrian regime

In the midst of these events and what is happening in the corridors of politics from a Russian-Chinese deal mentioned by the Iranian Mehr Agency, it is being prepared in order to persuade the Iranian government to urge the Yemenis to negotiate and announce a comprehensive settlement and end the state of war in Yemen in preparation for a comprehensive agreement that is part of a major deal in the region under Russian auspices. In the near future, China may draw a new political map (a new Middle East) with political and economic mixtures that reposition old alliances .and produce new policies that distance them from unipolar hegemony

But the strange and surprising thing is that there are countries that still enslave their economy and make it a servile slave to the US dollar and insult their currency as Iraq does, not for anything but more prostration for the decisions of the International Monetary Fund or because some of its politicians are linked to the dependencies and loyalties of those who came with them and made them sit in the chairs of government. The humiliation of their currency despite all the images and scenes that suggest radical changes, which confirms that they did not understand the lesson well .or that they are in the final stages of political stupidity, and that is the calamity  link

The Coming Collapse of Communist China

The Coming Collapse of Communist China

JC Collins Philosophy of Metrics

A few years following the collapse of the twin towers the world was almost unrecognizable from what it had been at the end of the 20th Century. After grunge, techno, the explosion of websites, Yahoo, Amazon, Supersize Fries, and Bill Clinton, anything seemed possible.

The lackluster years of the late 1990’s ended with the birth of the music sharing platform Napster and an unremarkable Y2K event. The future strangely seemed both mundane and hopeful. Everything changed with the bombing of the U.S.S. Cole in Yemen’s Aden harbor on October 12, 2000.

At the time, I was in Las Vegas attending the largest mining expo in the world. News of the Cole bombing quickly spread and my first thought was that it was only the beginning. There were those of us who understood on some intuitive level that something bigger was about to happen, but we couldn’t understand the full magnitude of what was to come.

On the morning of September 11, 2001, a mining co-worker, who was meant to be flying up to Canada from Dallas, called to inform me he wasn’t going to make it as all flights were grounded. Planes had crashed into the World Trade Center.

That was how I heard about the largest news event since the fall of the Berlin Wall and the collapse of the Soviet Union. Most of us either raced home or to the nearest boardroom with a television to watch the unfolding events on CNN. Like everyone else that morning, we knew in our guts that things would never be the same.

Three months after those events, on December 11, 2001, China became a member of the World Trade Organization (WTO). The argument was that allowing China to enter the WTO would encourage Beijing to adopt liberal economic and democratic norms. This of course would never happen.

By 2004 Chinese infrastructure projects were using up so much steel and rubber that the cost of large mining trucks and the massive tires which fit on those trucks had skyrocketed. It was said that China was building the equivalent of three Chicago’s every 12 months.

Within just a few years after the return of Hong Kong to Chinese rule everything had completely changed. The World Trade Center was gone, China was a member of the World Trade Organization, America was at war in the Middle East, and the China miracle was being propelled by the expansion of American debt. That’s how fast the world had been transformed.

The role of China becoming the worlds largest creditor nation as America was becoming the largest debtor nation was not an accident. It was by design and was needed in order to keep the global system of banking and commerce moving forward.

The Asian Currency Crisis of 1997/1998 signaled that the growing imbalances and existing exchange rate arrangements with the US dollar were beginning to cause massive liquidity constraints.

It became clear that an alternative arrangement would be required, but it would take another decade, and crisis, before the monetary policymakers in Beijing began to understand the financial predicament, they were in. The development of the New Belt and Road Initiative was a possible solution.

China welcomed the opportunity to expand its own credit markets and modernize the country in a fraction of the time it took Western nations in the last century. The expansion of their own domestic credit market, and membership in the WTO, allowed China to take on ever more increasing amounts of American sovereign debt.

The basic mechanics revolve around the role of the USD as the primary global reserve asset and China’s acquisition of those dollars through balancing trade accounts, or balance of payments. Those dollars need to be invested into dollar-denominated securities, or Treasury bonds, in order to maintain the exchange rate arrangement between the renminbi and dollar.

The major defect in the global monetary framework is that the dollar supply must continue expanding in order to meet global liquidity demands for a growing global economy. The problem is that the dollar is not a true global currency and is in fact the domestic currency of one nation used in a global capacity.

The expansion of the dollar money supply, or excess dollars, through this trade mechanism, must not be allowed to return to America’s domestic economy or it will cause financial trouble in the form of uncontrolled inflation.

China uses these dollars to both purchase US Treasuries and expand its own domestic currency supply. Taking on, in turn, the inflation created by the expanding dollar money supply. Since China’s membership into the WTO its foreign exchange reserve account has exploded with dollar-denominated securities.

These foreign exchange reserves have also increased from 16% of China’s GDP to well over 45% of total GDP. Total China debt-to-GDP ratio has doubled to 300% in the same timeframe and its total public and private debt now rests around $34 trillion. This is a solid indication that taking on US debt has allowed China to expand its own economy through multiple avenues

Consider that the total U.S. debt is around $22 trillion with a debt-to-GDP ratio of 105.4% as of 2017. It is expected that this number should continue to decrease as overall U.S. GDP continues to grow under the Trump mandate. Compare that to China’s debt-to-GDP ratio of 300% and who do you think is in the stronger position?

To make this point, on Monday, June 24, 2019, a U.S. judge found three Chinese banks in contempt for refusing to comply with subpoenas in an investigation into North Korean sanctions violations.

The three banks are under threat of now having their U.S. dollar accounts terminated by the Justice Department or Treasury Department. Cutting these Chinese banks off from the U.S. financial system. All three banks immediately suffered stock price drops. Once again indicating who has the stronger position.

This is just a basic summary of the monetary mechanism which exists between the world’s largest debtor nation and largest creditor nation. All other monetary and financial metrics, including global imbalances and liquidity shortfalls, are squeezed in-between these to polar positions. Nothing will change or improve within the global monetary system without a change to this arrangement.

After the financial crisis in 2008 the Chinese started calling for an alternative to the USD as the global reserve currency. The position from Beijing was that a viable alternative could be evolved from the Special Drawing Right (SDR) of the International Monetary Fund (IMF).

The SDR is a claim on currency and not an actual currency itself and would not provide enough liquidity to meet global demands in a reserve capacity. The claim is for currency which makes up its value composition, or otherwise called basket of currencies.

Back in 2009 these currencies were the USD, British pound, euro, and Japanese yen. China was promoting the idea of adding the renminbi to the SDR composition to begin the transformation of the SDR into a true global reserve asset.

Throughout the years I wrote extensively on this topic and covered much of the ground of what a transformed SDR would look like and how SDR denominated “substitution accounts” could be used to exchange excess USD reserves for SDR reserves.

Eventually the renminbi was added to the SDR composition and it appeared that China’s move on the IMF and the SDR could very well be the direction the monetary world moved.

(Note: There is a lot of confusion about the terminology around the Chinese currency. Some refer to it as the renminbi or RMB, while others call it the yuan. It is both. RMB is the name of the actual currency while yuan is the unit of measurement.

It is the same as the relation between the British Sterling currency and its unit of measurement the pound. In America the name dollar is used for both. The RMB has both offshore and onshore currencies which only complicate matters further.

The offshore RMB was meant to protect the Chinese domestic market from foreign speculators as it attempted to internationalize its currency. This strategy has failed and will now be one of the contributing factors to the collapse if China’s banking industry.)

Another event which happened after the last financial crisis was the birth of Bitcoin (BTC) and cryptocurrency. Bitcoin flew under the radar for years as it built up a large tech following, and its value grew. It was, for all practical purposes, the maximalists answer to corrupt banks and the growing world debt problem.

Over the last ten years the cryptocurrency market has expanded as hundreds of new digital assets were born and proposed use cases for those assets spread. BTC value exploded making millionaires and billionaires in what seemed like overnight.

Newcomers poured into the crypto market hoping for quick gains and wealth. Eventually somewhere around 70% of Bitcoin mining moved to China in search of low energy costs. Technically speaking, China controls the majority of the Bitcoin network’s collective hashrate.

China also accounts for a large volume of BTC trading. This volume increased as Chinese exchanges lured investors with 0% trading fees, which the People’s Bank of China (PBOC) would later regulate against.

This forced some trading volume from the Chinese market and it had a modest impact on capital outflows from China, which was the core objective for Beijing, as some of China’s wealthiest private business interests were moving capital offshore and around the world, in order to avoid the credit bubble which was forming in the mainland. These interests moved a large percentage of it into real estate markets around the world, like New York, Vancouver, San Francisco, Sydney, and Toronto.

It is important to note that these real estate markets are now bloated, and valuation reversals have already begun. This is also true for mainland China markets as well. Maybe even more so.

We are starting to see Chinese money being pulled from these “offshore” markets and this money could very well start finding its way into the Bitcoin and crypto markets from both inside and outside China.

Central bank policies and stumbling bond markets would normally provide the alternative to real estate but we are entering a period where the perfect situation is developing for capital to flee real estate, avoid bond markets, and pour directly into the crypto market, with some overflow moving into gold and other precious metals.

Stock markets may move marginally higher during this transition, but those markets are in the high range of valuation (and under enhanced risk) while crypto is still in the early phase of adoption and remains in the low range of valuation for the time being. This will change substantially in the next 6 to 12 months as the developing fundamentals of the crypto market take root and expand across investor demographics and industry sectors.

Outside of monetary and financial concerns, China also has deep cultural and political fault lines which will move suddenly and dramatically under the right conditions. The Communist Party of China (CPC) maintains tight control over these fault lines and uses technological surveillance tools to keep the different cultural fragments aligned with Party policies. But as the recent million plus protests in Hong Kong showed, the people have means of organizing and planning while remaining invisible to those tools.

To continue reading, please go to the original article here:

https://philosophyofmetrics.com/the-coming-collapse-of-communist-china/