Video Transcription China in SDR Basket – Yuan New World Reserve Currency
China’s strategic evolution to become of global financial powerhouse number one in 1994 they pegged their currency directly to the dollar so whatever the dollar did goes up goes down didn’t matter Chinese Yuan was also going up or down right along with the dollar what that actually did was transfer the manufacturing base from the u.s. to China with all that cheap labor.
Corporations could pretty much determine what their profits would be very strategic move very smart move on their part with all that new found wealth they have been accumulating gold like crazy because they’re well aware of fiat currency of what that means and they want to be a global financial leader and frankly he or she who has the gold holds your purchasing power and therefore you hold power so very strategic move on.
China’s part and in fact they had grown so much globally that by $MONTH 2012 the US Treasury gave them direct access to their computer database so that they could bypass wall street and buy Treasuries directly from the Treasury Department. Now you may think that doesn’t sound like much of a big deal but no one else no one else can do that only China so it’s a very very big deal.
I’m particularly in this day and age with all of the hacking that’s going on etc china has direct access to our Treasuries database I think that’s really interesting in addition they become thanks to the manufacturing base the biggest trading nation ok I mean I think you can start to see this pattern but they weren’t getting enough financial clout fast enough so in $MONTH 2015 they created the AIIB bank which was designed to compete against the world bank .
They gave the IMF and the World notice that you’re either going to play with the rules that we want to play. We’re going to create our own rules and take that away from you now those of you that have been paying attention are probably going to recall how President Obama and Treasury secretary Jack Lew when globally and they were up in arms getting our allies not to join the AIIB bank.
It fell on deaf ears because the very first non Asian country to do so was great Britain our staunchest ally and the second country to join with Saudi Arabia and that’s the petro dollar the tool that was used to keep our status as the world reserve currency . After that it was just a domino effect with pretty much every single country joining the AIIB bank and again in $YEAR.
I’m sorry in May they also forgive me on this one again the largest US Treasury bond buyer of the world so they have quite a bit of clout but the real changes have come in so all those things were leading up to this in March for the first time ever considered that China is a state-run country they opened up their interbank market now China has the second-largest interbank market in the world. I’m going to tell you this is a very, very, very significant move and that happened last March but that’s what position them to come out with the very first SDR are denominated bank bond rather and what I find quite interesting is that it was the world bank that was the underwriter not the AIIB bank so I think it could be you know possible that there were some kind of negotiations going on that made them use the world bank.
So it’s also interesting to note that they became part of the SDR basket and concluded the transition on October first which I think was Saturday and then Sunday but i think it was Saturday so now the Chinese came in at the number three spot and everybody had to give up room to let them in of course they did if you have a piece of pie and you have four pieces and somebody else wants a piece somebody or everybody is going to have to give up their piece of the pie.
You need to understand three key things about this number one rules were specifically changed so that China’s Yuan could qualify to be included in the basket number two it requires a 70-percent minimum vote to change the basket waiting or certainly allow anybody and nobody has been allowed in since 81 prior to this anyway but what that also means is that we the US had to agree to it because we have far too big a portion of voting rights that nobody could have overridden us.
So we recognize our loss of global clout and we’re going along with the program you get that we’re actually going along the program but now China’s got a big job to do. They have to develop this market and they’re doing actually a pretty good job of it they’ve got to build a platform to expand borrowing and trading in SDR’s ours borrowing because that’s how fiat money is created accept that this is not a debt of the IMF Jim Rickards cause calls it a cruise missile to the dollar.
A few months ago in China they came out with how to do the reflection and it’s actually pretty darn simple all they have to do. The new global financial architecture yes of course this is all new because the old system is dead so they are actually admitting it. What you’re really actually seeing is a brand-new $YEAR fiat money being created out of thin air so you tell me something that has absolute takes no effort to create and there’s no claim against it how does that have value how does that have value for your labor and your time in my opinion it doesn’t they call it safe in my opinion it is a tool for reflation and just a backdoor way to allow the central bank’s to grow their balance sheet instead of this way straight up and wait until you see how they’re going to do it because it really is kind of so simple so beautiful and so mind-blowing but what you also need to understand is that you and I as taxpayers are responsible for this balance sheet and that is not really okay with me