Janet Yellen signaled that the Fed is grappling with the problem I have been warning about; the dollar has become the de facto only real currency and the Fed is indeed becoming the world’s central bank. Yellen has admitted that the Fed is being lobbied by everyone to surrender its domestic policy objectives to international. This is precisely what took place in 1927. Yellen stated that the Fed should worry less about inflation domestically than about global growth risks. While pointing to the slowdown in China and depressed commodity prices, Europe is a real basket case. She used the words that the Fed must consider “caution is especially warranted” when it comes to raising interest rates. This has put most Fed watchers off to expecting any possible rate hike into retirement as they expect nothing before September. The BREXIT will most likely be rigged because it is exactly opposite of what they are telling the Brits that they will be isolated and the economy will collapse if the exit the EU. Nobody says Britain did fine before it joined only in 1973 or that it is the other-way-around; with BREXIT, Europe will fail. This heated issue in Britain is most likely the final nail in the coffin. Britain will collapse with the Euro and should have just handed its sovereignty to Brussels. Europe will never reform so it will be all go down together. The political risk in Europe is tremendous and Yellen cannot prevent that with simply interest rates. Continue reading
Washington: Former Prime Minister Jawaharlal Nehru had sought American assistance and wrote to the then US president John F Kennedy to provide India fighter jets to stem the Chinese aggression during the 1962 Sino-India war, according to a new book.
The main objective of Mao Zedong, the founding father of the People’s Republic of China, to attack India in 1962 was to “humiliate” Mr Nehru who was emerging as a leader of the third world, the book said.
“India’s implementation of the Forward Policy served as a major provocation to China in September 1962,” Bruce Riedel, a former CIA official, wrote the book titled ‘JFK’s Forgotten Crisis: Tibet, the CIA and the Sino-Indian War’. Continue reading
The attempted defection of Wang Lijun, recently the top cop in the western city of Chongqing, suggests that China’s ongoing leadership transition will be especially turbulent.
On the 6th of this month, Wang entered the American consulate in Chengdu, the capital of neighboring Sichuan Province, seeking asylum. He spent a day there. Incredibly, his old boss, Chongqing Party Secretary Bo Xilai, essentially invaded Sichuan by sending hundreds of his armed security troops to surround the Chengdu consulate in an unsuccessful bid to apprehend Wang.
Full article: Power Struggle in China (World Affairs Journal)
On 25 December 2011, the government of Peoples Republic of China and Japan unveiled plans to promote direct exchange of their currencies. This agreement will allow firms to convert the Chinese and Japanese currencies directly into each other, thus negating the need to buy dollars. This deal between China and Japan followed agreements between China and numerous countries to trade outside the sphere of the US dollar. A few weeks earlier, China also announced a 70 billion Yuan ($11 billion) currency swap agreement with Thailand.
After visiting China, the Prime Minister of Japan Yoshihiko Noda went on to India and signed another currency swap agreement with the government of India. These currency agreements in Asia came in a year when the countries of the Association of South East Asian Nations (ASEAN) (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) were seeking to deepen ways to strengthen their firewall to protect their economies from the continued devaluation of the US dollar. In the year of the ‘Eurozone crisis’ when the future of the EURO as a viable currency was fraught with uncertainty, many states were reconsidering holding their reserves in the US dollar.
Continue reading article: China And Japan Currency Swap: Nail In US Dollar’s Coffin (Eurasia Review)