by Anthony Migchels | April 5, 2021
Exactly 18 months after Mark Carney officially announced the end of the Petrodollar, and its replacement by an IMF World Reserve Currency, the IMF announces that they will create $650 billion worth of Special Drawing Rights.
By Anthony Migchels, for HenryMakow.com.
It’s an astounding event. The IMF ceases lending in Dollars, and starts using its own currency to bail out Nations. Ninety of which have asked for 'assistance', their finances savaged by the Lockdown.
$650 billion may not sound that much, but surely this is only the beginning. Soon the IMF will be throwing around trillions worth of SDR like the Fed now is doing with USD.
The idea is that the IMF currency can be used as reserve currency. And they will, the Petrodollar is inflating badly, and has lost perhaps as much as half of its value in real terms over the last 18 months or so. The Euro and the Yen are also in bad shape, hiding the true extent of the Dollar’s decline. Nobody is going to be happy to see their reserves (or savings) melt away.
This may sound either bizarre, or even hardly relevant, but it is. Everybody is bamboozled by the Lockdown and the 'virus', but in the background a huge financial crisis has been ongoing. Let's recapitulate the key events over the last few years, that led to this crunch moment in World History.
0. The foreplay was the Fed starting tapering in 2017. Presumably trying to take some of the liquidity they had injected during the 2008 Crunch out of the System. And raising rates. This had the entirely predictable, and indeed widely predicted, effect of creating a major liquidity squeeze in the System.
Here's the trend of M2 growth, a key money supply measure:
As is clearly visible, the Fed's tapering simply caused a deflationary crash, just as they did in 2008, and 2001. Money growth went to zero, it needs to grow about 10% per year to keep the System sufficiently liquid. Basically to keep the Usury on the debt payable, that is what is driving money growth. There is never enough money to pay interest + debt.
1. But the story of the death of the Petrodollar and the rise of the IMF World Reserve Currency starts in earnest in August 23d 2019, when Mark Carney, Bank of England chief at the time, in a meeting with colleague central bankers, announced that 'within ten years', the Dollar's role as World Reserve Currency would end, and that it would be replaced not by the Yuan, but an IMF World Reserve Currency. He added that a change of reserve currency is typically associated with 'dramatic upheavals'.
2. Then, not a month later, on Monday September 16th 2019, problems started mounting on the repo market, where Banks and other 'institutions' go for daily short term loans to balance their books. It went as high as 10%. This indicated that players in the shadow banking system didn't trust each others' collateral anymore. They effectively stopped lending to each other. One may remember the Libor rate in 2008, which went up, indicating the same problems. This means these 'institutions' were technically bankrupt.
3. This then, was the excuse for the Fed to start QE 4. At first, they said they would start a) buying up treasuries, and b) provide 'short term loans' on a daily basis to insolvent 'institutions'.
It started with about $75 billion per day, which nowadays is small beer, but things escalated quickly. On January 3d 2020, the day Soleimani was executed, the Fed reported that they had already doled out $6 Trillion in day to day loans.
4. Things worsened only from there. When the World Wide Lockdown started, March 16th 2020, the Fed was already providing a cool $1 Trillion per day in loans to the shadow banking system. That fateful day, when 4 billion people were given house arrest, they started a $4 Trillion 'asset purchasing program', basically allowing the bankrupt 'institutions' (it's very sad Newspeak to call these plunder operations 'institutions') to off load their junk to the Fed, in a bid to 'solve' the problems on the repo market.
Yes, we got locked up as they gave $4 Trillion to the Bank, that's literally what happened. It was all sold as 'panic due to Corona', but the real 'panic' (in reality, it's all orchestrated A to Z) was on Wall Street.
This may sound either bizarre, or even hardly relevant, but it is. Everybody is bamboozled by the Lockdown and the 'virus', but in the background a huge financial crisis has been ongoing. Let's recapitulate the key events over the last few years, that led to this crunch moment in World History.
0. The foreplay was the Fed starting tapering in 2017. Presumably trying to take some of the liquidity they had injected during the 2008 Crunch out of the System. And raising rates. This had the entirely predictable, and indeed widely predicted, effect of creating a major liquidity squeeze in the System.
Here's the trend of M2 growth, a key money supply measure:
1. But the story of the death of the Petrodollar and the rise of the IMF World Reserve Currency starts in earnest in August 23d 2019, when Mark Carney, Bank of England chief at the time, in a meeting with colleague central bankers, announced that 'within ten years', the Dollar's role as World Reserve Currency would end, and that it would be replaced not by the Yuan, but an IMF World Reserve Currency. He added that a change of reserve currency is typically associated with 'dramatic upheavals'.
2. Then, not a month later, on Monday September 16th 2019, problems started mounting on the repo market, where Banks and other 'institutions' go for daily short term loans to balance their books. It went as high as 10%. This indicated that players in the shadow banking system didn't trust each others' collateral anymore. They effectively stopped lending to each other. One may remember the Libor rate in 2008, which went up, indicating the same problems. This means these 'institutions' were technically bankrupt.
3. This then, was the excuse for the Fed to start QE 4. At first, they said they would start a) buying up treasuries, and b) provide 'short term loans' on a daily basis to insolvent 'institutions'.
It started with about $75 billion per day, which nowadays is small beer, but things escalated quickly. On January 3d 2020, the day Soleimani was executed, the Fed reported that they had already doled out $6 Trillion in day to day loans.
4. Things worsened only from there. When the World Wide Lockdown started, March 16th 2020, the Fed was already providing a cool $1 Trillion per day in loans to the shadow banking system. That fateful day, when 4 billion people were given house arrest, they started a $4 Trillion 'asset purchasing program', basically allowing the bankrupt 'institutions' (it's very sad Newspeak to call these plunder operations 'institutions') to off load their junk to the Fed, in a bid to 'solve' the problems on the repo market.
Yes, we got locked up as they gave $4 Trillion to the Bank, that's literally what happened. It was all sold as 'panic due to Corona', but the real 'panic' (in reality, it's all orchestrated A to Z) was on Wall Street.
5. Several packages have come through Congress since that bailout. Mnuchin gave Wall Street another Trillion. Biden has just signed a $3 Trillion deal, most of which goes directly to the filthy rich too.
All in all, the Fed and the US Government have added $12 Trillion in new dollars to the System since September 2019.
6. As a result of this inflation the obvious is happening: rising prices. Especially in commodities. Everything is up 50% or more, lumber 180%. It will take a little time for these prices to translate in rising prices of all goods, but they will.
There's also massive housing speculation. In Vancouver, Australia. Much of it is driven by China, which has expanded credit with an even greater amount than the Fed over the last few years. Some say as much $30 Trillion.
7. Much of the inflation goes to the Stock Exchange, resulting in the ridiculous 'boom' there, which is 100% totally artificial, and would not exist without the Fed.
Between September and December 2019, the S&P went down from 2905 to 2416. This must have been because of the disastrous liquidity squeeze in the shadow banking system that became apparent with that 10% repo market interest rate spike.
Then, because of QE, it started climbing like crazy again, all the way up to 3380. Next, it lost a full 1000 points in the week after the Lockdown started. Presumably because of 'covid', but it had nothing to do with that, it was the same problems in the financial system, for which they were providing already a Trillion per day on the repo market, and for which they conjured up that $ 4 Trillion bailout.
Since then, the S&P has risen to 4019 today. Another 600 point rise while the real economy is in shambles due to the Lockdown.
8. The result of all this is obvious: it has killed the Dollar. Just as 'economist'/bankster agent Kyle Bass said they would do to 'fix' America's finances back in 2011. Both its value, and its status. Dedollarization is ongoing and has been escalating. The already crumbling Petrodollar is not going to recover from this.
The IMF's move confirms this: the new loans are in their SDRs, not in the usual Dollars. Washington's dominance in the IMF is officially over. From now on, the IMF itself dominates.
Please go to Real Currencies to read more.
All in all, the Fed and the US Government have added $12 Trillion in new dollars to the System since September 2019.
6. As a result of this inflation the obvious is happening: rising prices. Especially in commodities. Everything is up 50% or more, lumber 180%. It will take a little time for these prices to translate in rising prices of all goods, but they will.
There's also massive housing speculation. In Vancouver, Australia. Much of it is driven by China, which has expanded credit with an even greater amount than the Fed over the last few years. Some say as much $30 Trillion.
7. Much of the inflation goes to the Stock Exchange, resulting in the ridiculous 'boom' there, which is 100% totally artificial, and would not exist without the Fed.
Between September and December 2019, the S&P went down from 2905 to 2416. This must have been because of the disastrous liquidity squeeze in the shadow banking system that became apparent with that 10% repo market interest rate spike.
Then, because of QE, it started climbing like crazy again, all the way up to 3380. Next, it lost a full 1000 points in the week after the Lockdown started. Presumably because of 'covid', but it had nothing to do with that, it was the same problems in the financial system, for which they were providing already a Trillion per day on the repo market, and for which they conjured up that $ 4 Trillion bailout.
Since then, the S&P has risen to 4019 today. Another 600 point rise while the real economy is in shambles due to the Lockdown.
The IMF's move confirms this: the new loans are in their SDRs, not in the usual Dollars. Washington's dominance in the IMF is officially over. From now on, the IMF itself dominates.
Please go to Real Currencies to read more.
________
It is likely Japan's central bank the BoJ is preparing for the above scenario:
Related:
In the opening comment "There is no 'virus'. There are only Bankers," listen to the following discussion on viruses and their origin, then come to the realization how much distortion of science has been going on when the only beneficiaries of science are governments with easy access to magic money provided by private bankers. The entire foundation of virology related to this Covid fake pandemic is incorrect. Virology is based on entirely wrong concepts about what viruses are and there is nothing that is going to change this fact; because there are just too many private interests (like Hollywood types) personally profiting off this fake Covid pandemic. It is entirely based on the wrong conception of how viruses are created and what they actually are. Even Anthony Fauci is basing all his erroneous assumptions about virology on incorrect science and it is having catastrophic consequences.
MY DISCUSSION WITH STEFAN LANKA ABOUT VIROLOGY
MY DISCUSSION WITH STEFAN LANKA ABOUT VIROLOGY
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