High noon in Syria

High noon in Syria

by Don Hank

Fox News is between a rock and a hard place. They have always generally been anti-Putin because they have a lot of Neocon supporters. But now Putin has scored big at the UN. Even the British PM is cautiously inching over to his side and Merkel stated last week that she thinks Assad must be included in negotiations over the fate of Syria. Most European countries are taking a wait and see position and will bolt the US monopoly if such is appropriate. Putin has a plan and clearly wants to stop ISIS. Obama sorta has a, well, you know, maybe a plan or something and has been pretending to fight ISIS for years now. Judging by his actions, his plan is to lose the war on ISIS and allow them to romp freely, slicing throats to their hearts content until Assad – the only leader who has been sincerely fighting ISIS for 4.5 years – is gone. While Obama’s position is incomprehensible and confusing, Putin’s position is clear and easily understood. One could articulate it in part as follows:

Syrian Christians overwhelmingly support Assad because they know that if he leaves power, their life expectancy is considerably shorter.

Assad is not a dictator (though Fox still calls him that in the article below). He was duly elected (unlike the Saudis whom we support – NO Neocon voices are calling for the unelected dictator king to step down. How phony and hypocritical can you get?)

Since the popular Assad is still the president, anyone entering Syria without his permission – including the US military in its pretend fight against ISIS – is there illegally per international law. Putin and his coalition have been invited by the Syrian people via their elected leader to fight ISIS and are there legally and legitimately.

In a court of law, no fair-minded judge would hand a victory to the US or find against Putin, but the US, as the “exceptional” and “indispensable” world manipulator, has in the past bought all the judges so to speak. That is changing. I had pointed out before that the accession of almost all US allies to the AIIB was a signal that the hegemon has lost his support in the world community. And without that, he cannot stand. I had also pointed out that Russia is now selling oil to China for yuan (RMB) as part of a larger campaign to dedollarize world trade. The less the USD is used in international transactions, the less it is worth internationally, as one can deduce from my commentary and translation here. Dollar hegemony (which gives the US government and FRB the extravagant ability to print unlimited dollars for its military adventures) is being fought successfully, a step at a time. We are witnessing the changing of the guard. The good news is that, as I pointed out here, the Eurasianism of Putin, China, the BRICS and other Eurasian partners strictly pursues the multipolar principle whereby there shall not be a hegemon. (BTW, if the countries that joined the AIIB had had any reason whatsoever to believe that the AIIB would enable a hegemon – world dictator in the image of the US – to emerge, they would not have rushed en masse to join it and turn their backs on the US-led World Bank and IMF).

I have added comments to the biased Fox report below.

http://www.foxnews.com/world/2015/09/30/boots-on-ground-russian-lawmakers-back-putin-sending-troops-to-syria/

Russia launches airstrikes in northern Syria, senior military official says

Published September 30, 2015

FoxNews.com

 

EXCLUSIVE: Russian warplanes have begun bombarding Syrian opposition [FOX USES THE WORD “OPPOSITION” TO SUGGEST TO UNWARY READERS THAT THESE ARE GOOD FOLKS WHO RECEIVED ARMS FROM THE US TO FIGHT A DICTATOR. HOWEVER, THE BOUNDARY BETWEEN TERRORISTS AND “OPPOSITION” HAS LONG BEEN BLURRED. IT IS COMMONLY KNOWN THAT THE US GOVERNMENT ROUTINELY GIVES ARMS TO ANYONE FIGHTING ASSAD AND THESE PEOPLE THEN ROUTINELY TURN AROUND AND JOIN ISIS OR ANOTHER TERROR ORGANIZATION–DON] targets in the war torn nation’s north, working on behalf of dictator [NEOCON FOX IS OBLIGED TO PRETENT THAT ASSAD IS A DICTATOR BECAUSE THEY ARE BEHOLDEN TO THEIR RICH SUPPORTERS TO KEEP UP THIS CHARADE. BUT AS I POINTED OUT ABOVE, ASSAD IS NOT ONLY POPULAR, HE IS DULY ELECTED. THE WEST HAS CONDEMNED HIM FOR KILLING PEOPLE, BUT THE WEST KILLS ALL THE PEOPLE IT WANTS, INTERFERES IN THE INTERNAL AFFAIRS OF NATIONS, STARTS AND FUNDS COLOR REVOLUTIONS AND ARAB SPRING-LIKE UPRISINGS AND IN SO DOING PLUNGES NATION AFTER NATION INTO ANARCHY, CREATIG A VACUUM THAT IS PREDICTABLY FILLED BY ISLAMIC TERRORISTS, TRIGGERING A MASS MIGRATION THAT IS OUT OF CONTROL. THE KEY US ALLY IN THE MIDDLE EAST IS A TRUE DICTATOR, THE SAUDI KING WHO IS UNELECTED. THERE IS NO GREATER HYPOCRISY THAN FOX CALLING ASSAD A DICTATOR WHILE GIVING THE SAUDI ROYALS A PASS—DON HANK] Bashar al Assad, according to a senior military official.

The official said airstrikes targeted fighters in the vicinity of Homs, located roughly 60 miles east of a Russian naval facility in Tartus, and were carried out by a “couple” of Russian bombers. It was not clear if the strikes targeted ISIS, Al Qaeda or other forces opposed to Assad, who Moscow is aiding [ANOTHER DECEITFUL SUGGESTION THAT PUTIN IS KILLING US APPROVED FORCES OPPOSED TO ASSAD, ALTHOUGH OBAMA HAS ADMITTED HIS ADMINISTRATION HAD ONLY MANAGED TO TRAIN A HANDFUL AT A PRICE OF SEVERAL MILLION DOLLARS PER CAPITA AND THAT THESE MEN HAD MOSTLY DISAPPEARED].  According to a Twitter handle belonging to the Syrian government, the Russian strikes were initiated at the request of Assad. [AGAIN, AS I POINTED OUT ABOVE, THE FACT THAT THE OFFICIAL DULY ELECTED PRESIDENT OF SYRIA GAVE THE RUSSIANS PERMISSION TO BE THERE SHOWS THAT NO INTERNATIONAL LAWS OR TREATIES HAVE BEEN VIOLATED BY PUTIN, WHO, AS A EURASIAN (AS EXPLAINED here), ADHERES TO THE PRINCIPLE OF HONORING NATIONAL SOVEREIGNTIES—SOMETHING THE US HAS NOT DONE FOR OVER A HALF-CENTURY, FALSELY TELLING ITS PEOPLE THAT IT HAS EVERY RIGHT TO INTERFERE IN THE INTERNAL AFFAIRS OF ANY NATION IT DISAGREES WITH. BY REPORTING THIS, FOX IS ALSO UNWITTINGLY HIGHLIGHTING THE FACT THAT THE US AND ITS ALLIES IN SYRIA ARE THERE ILLEGALLY AND AGAINST THE WILL OF THE SYRIAN PEOPLE. FOX, OF COURSE, WANTS US TO THINK RUSSIA IS THE VIOLATOR HERE BUT JUST THE OPPOSITE IS TRUE. THE CASE IS CLEAR CUT AND ONLY THE BRAIN DEAD COULD FAIL TO SEE WHAT IS ACTUALLY HAPPENING—DON]

The development came after Pentagon officials brushed aside an official request from Russia to clear air space over northern Syria, where Moscow intends to conduct airstrikes against ISIS on behalf of Syrian dictator [NO, FOX. HE IS NOT A DICTATOR, AS I HAVE SHOWN ABOVE. THE SAUDI KING IS INDEED A DICTATOR (WHO RECENTLY BOMBED A WEDDING PARTY AND KILLED DOZENS OF INNOCENT PEOPLE) BUT YOU WOULD NEVER CALL HIM THAT. WHY? —DON] Bashar al-Assad, according to sources who spoke to Fox News.

The request was made by a Russian three-star general who spoke with U.S. officials at the American embassy in Baghdad, sources said. The general, who was not identified, used the word “please” when delivering the verbal request, known as a “demarche,” according to the written transcript of the exchange.

“If you have forces in the area we request they leave,” the general said.

A senior Pentagon official said the U.S., which has also been conducting air strikes against ISIS, but does not support Assad, said the request was not honored.

[SO IF THE US ENTERS SYRIA IN VIOLATION OF INTERNATIONAL LAW AND IS FIRED UPON BY A NATION THAT IS THERE IN COMPLIANCE WITH INTERNATIONAL LAW, THEN THE US HAS NO MORAL RIGHT OR AUTHORITY TO COMPLAIN ABOUT ANY DAMAGE IT SUFFERS AS A RESULT OF THIS TRESPASSING. (THE PENTAGON MUST ALSO EXPLAIN WHY IT ENDANGERED ITS PERSONNEL BY FORCING THEM TO ENTER TERRITORY ILLEGALLY). THE US HAS BEEN IGNORING INTERNATIONAL LAW FOR DECADES AND GETTING AWAY WITH IT BECAUSE IT WAS CLEARLY THE STRONGEST NATION. BUT NOW WE HAVE A COALITION OF RUSSIA WITH CHINA (THE LATTER MAY OR MAY NOT PARTICIPATE IN THE RUSSIAN LED COALITION). TOGETHER IT IS LIKELY THAT THEIR POWER IS GREATER THAN THAT OF THE US. FURTHER, AND MORE IMPORTANTLY, OUR ALLIES ARE NO LONGER SOLIDLY BEHIND US. THIS CONFRONTATION BETWEEN THE US IN ITS ROLE AS A VIOLATOR OF INTERNATIONAL LAW AND RUSSIA IN ITS ROLE OF THE PARTY REQUESTED BY THE SYRIAN PEOPLE TO ENTER SYRIA, HAS THE POTENTIAL TO SMASH WHAT IS LEFT OF US PRESTIGE AND POWER. IT DIDN’T HAVE TO BE THIS WAY BUT A COALITION OF THE TWO MAIN POLITICAL PARTIES RELENTLESSLY AND RECKLESSLY PURSUING INEXPLICABLE NEOCON POLICIES (WITH THE TACIT PERMISSION OF A BRAINWASHED PUBLIC THAT HAS BEEN TAUGHT TO FOLLOW THE LEADER AND NOT TO THINK FOR ITSELF) CAN’T BE EXPECTED TO WIN FRIENDS OR WARS. WE CAN ONLY HOPE AND PRAY THAT THE ABOVE-CITED PENTAGON OFFICIAL IS BLUFFING – DON]

 

Chinese monetary policy expert spills the beans, but not to the West

Warning from top Chinese monetary policy maker

My translation of a report in Economic Daily (Jingji Ribao) on the July 20, 2014 interview with Chen Yulu re. RMB internationalization follows below.

Note: RMB is the acronym for China’s national currency, the renminbi, also known as the yuan (not to be confused with the Japanese yen). Renmin means “the People” in Chinese, while “bi” means currency – hence, the People’s currency.

Background: As of 2013, the RMB has been convertible in current accounts (but not capital accounts). Until then, if you wanted to convert the RMB into one of the non-dollar currencies, you generally had to first convert your RMB into dollars, a cumbersome process that discouraged investors from making many transactions.

Why I decided to translate this article:

I first found this article in a Japanese language translation and decided to find the original, linked below.

Not at all surprisingly, I found no translation of it into English anywhere (except for an atrocious machine rendition that does not merit the descriptor “translation”). Why no surprise? I had already had experience with the huge black holes in the Western financial press, as reported here (the term “dedollarization” in that report is for all intents and purposes synonymous with “RMB internationalization”as used hereinbelow).

Why this article was not run in the Western press:

While many of the facts cited by Mr. Chen are to be found in the Western press and also in English language articles posted in China (for example, by the Bank of China), the time frames of Mr. Chen’s predictions of the RMB’s internationalization growth differ shockingly even from those reported in Chinese publications posted in English. Obviously, the Chinese don’t dare tell us the truth and I can’t blame them.

Mr. Chen tells his Asian audience that the RMB internationalization index (RII) will exceed that of all currencies except the US dollar and the euro within anywhere from 3 to 5 years, whereas other forecasts in English language journals estimate that time frame at 15 or more years. The idea seems to mitigate what most will see as bad news and to avoid any counter-measures from the Western central bankers (although it could be that they are also in on the plot). It strikes me that if Mr. Chen were just spouting hype to sell the rmb, then he and the rest of the economic bosses, eg, at the Bank of China, would post these things in English. But since they post them only in Chinese (and also allowed on Japanese site to post a translation of this interview), it seems that the West is being kept in the dark. The fact that rmb clearing centers are opening all over Europe is also an important, and ominous clue as to what is happening behind the curtain. One could make the case that the vast majority of our ‘allies’ are in fact quietly sabotaging the dollar. And if you were a European and your finances had been wrecked by the US derivatives bubble, you  would understand the sentiment behind that. In fact, the sanctions against Russia also dealt Europe a dangerous blow, and yet, their governments don’t dare defy Washington and go their own way. Think about it. France’s BNP Paribas was fined by the US for a misdemeanor that is perfectly legal in Europe and they lost 9 billion dollars to an increasingly ruthless hegemon. Who today is truly sympathetic to the US government?

The World Bank had estimated in 2013 that China’s economy “will become the [world’s] largest by 2030.” Well, that happened last week. Can you see that we are being kept in the dark? 

This article was translated by an ordinary citizen (who happens to be a professional translator) free of charge, for both investors and ordinary middle class citizens who will need to be prepared for a collapse of the dollar sooner than most would expect, at least if we trust the media that are being paid good money to prepare us but refuse to do so or are perhaps also hapless victims of normalcy bias.

Finally, while Mr. Chen says the RMB is not intended to challenge the dollar, now that the Chinese economy exceeds ours, guess what will happen to the dollar once the RMB internationalization index surpasses the dollar’s.

Hint: the main ingredient in the value of any currency is trust. Western monetary policy aims at 2% annual inflation and cheekily calls that “stabilization,” routinely causes bubbles in various markets and fosters the creation of essentially worthless derivatives denominated in the US dollar. Chinese policy has, so far at least, not fallen into anything resembling this kind of irresponsible behavior. European markets were hit hard by this corrupt US monetary policy and they are not happy. This is, in my judgment, why the RMB clearing centers have been established all over Europe (as well as elsewhere) but not in the US, whose investors apparently want to go down with their own ship.

I am convinced that all or most of our allies have lost all trust in the US government and are quietly deserting the ship.

My only question is: what took them so long?

Don Hank

Author’s email: zoilandon@msn.com

http://finance.sina.com.cn/money/forex/20140722/054019778623.shtml

Internationalization of the RMB is not a challenge to other currencies

05:40, July 22, 2014 Economic Daily, I have something to say (11 participants)

Staff reporter: Zhang Wei Zhang Lichen

On July 20, the Renmin University of China issued the “2014 Renminbi (6.1546, 0.0044, 0.07%) internationalization report,” which shows that in 2013 the rmb internationalization index (RII) further accelerated. The report notes that the internationalization of the RMB is not intended to challenge the US dollar or other international currencies; the renminbi is taking on more international monetary functions, rooted in the internal demands of the international market.

Since the beginning of 2012, the People’s [Renmin] University of China has been releasing a series of annual research reports on the internationalization of the RMB, and has proposed an RMB internationalization Index (RII), which objectively describes of the extent of Chinese yuan use in overall international economic activities. The index not only tracks trends in 3 areas, namely, global renminbi-denominated trade, financial transactions and foreign exchange reserves, but enables a convenient horizontal comparison with other major international currencies. On July 20, upon release of the “2014 RMB internationalization Report,” Economic Daily reporters on issues relating to the internationalization of the RMB were granted an exclusive interview with Chen Yulu, a member of the Central bank Monetary Policy Committee and president of Renmin University of China.

According to data in a recently released report, by the end of 2013, the RII reached 1.69, as compared to 0.92 at the beginning of the year, a gain of 84%. What is the reason for this rapid growth?

Chen Yulu: The RMB internationalization Index (RII) accelerated further in 2012, due to high-growth, reaching 1.69 by the end of 2013. In contrast, over the same period the international status of the dollar remained stable, while the euro, and British pound rose only moderately, and the internationalization of the yen declined slightly.

This is because China is number one in global trade, and currently has the world’s second largest FDI (Foreign Direct Investment) inflows and the third largest direct investment outflows. In cross-border trade, more and more companies are using RMB settlement. In 2013 the share of trade in goods settled in RMB exceeded 10%. In terms of investment, foreign direct investment in RMB 448.13 was billion while overseas direct investment amounted to 85.61 billion RMB, the total reached 1.9 times over the same period last year. This is the main reason for the rapid growth in the RII.

According to the latest data, in 2014, the first and second quarter RII’s were 1.74 and 1.96, respectively. By the end of this year, based on a conservative estimate, the RII is expected to climb to 2.40. Following system reform and the release of dividend policy, RMB direct investment and credit in international markets will significantly increase. If the  BRICS Development Bank and the China Latin America Cooperation Forum proceed smoothly, an optimistic forecast for the RII by the end of 2014 might be in excess of three. Barring any major adverse events, the international use of the renminbi will exceed the levels of the yen and the British pound in anywhere from 3 to 5 years, with the RMB becoming the world’s third largest currency after the dollar and the euro.

The accelerated process of RMB internationalization seems to suggest a challenge to the status of dollar, the euro and other international currencies. What do you think?

Chen Yulu: The internationalization of the RMB is not going to challenge the dollar or other international currencies. In fact, the RMB is assuming more international monetary functions as a result of internal demand in the international market. In particular, the international financial crisis in 2008 demonstrated that there are significant contradictions in the current international monetary and financial landscape. For example, the United States accounts for 20% of the global total economy, but supplies 52% of international currency as a public good. The spirit is willing but the flesh is weak. In the last two years, a number of international financial centers in Europe have been actively showing intensive demand for RMB-traded products, and have signed RMB clearing agreements with China. This shows that the RMB internationalization is a phenomenon that has developed in response to adjustments in international economic and trade patterns, with the chief motivation coming from international market demand. China’s push can be seen as an echo of this demand.

Secondly, China has become the world’s second largest economy, and this entails a greater responsibility and obligation to provide global public goods, including the response to the global liquidity shortage. Thus it has become the lender of last resort, participating in global currency market rate pricing, establishment of a stable international currency exchange rates system and so on. Due to China’s own increased economic strength, this is the default option for creating a stable monetary and financial environment for global economic development.

We also need to note that the yuan is far from becoming a core international currency, and does not pose a threat to the status of the dollar or the euro. Therefore, we need to consider the larger pattern and see the internationalization of the RMB as a natural response to adjustments in the international economic and financial situation, without assigning it too many other interpretations.

Currently, the establishment of offshore markets is the main thrust of the RMB internationalization process. Can you give us an overview of the global offshore RMB market? How will it impact the development of Chinese enterprises and financial institutions

Chen Yulu: Hong Kong is still the world’s largest offshore yuan market, where we find not only the most important clearing platform of cross-border trade in RMB, but also the largest pool of offshore renminbi funds. The central government has expressed clear support for entering a new stage of domestic development following the construction of offshore financial centers in Hong Kong. Elsewhere in Asia, in addition to Singapore and Taiwan and Macau, Seoul has followed suit with the signing of an RMB clearing agreement.

A number of international financial centers in Europe, such as London, Frankfurt, Luxembourg, Paris and Zurich are actively expressing the desire to establish offshore financial centers. This year, China signed RMB clearing agreements with Germany, Britain, France, Luxembourg and other countries. This is likely to cause a reversal, with the size of the European market lagging significantly behind Asia. In addition, almost all international financial centers are being established on fears of falling behind in the offshore renminbi business. This means that in addition to Asian high yield and European new markets, the RMB offshore market development will be a fast-growing trend in the global situation.

From a domestic perspective, the offshore market provides domestic enterprises new financing channels, and allows companies to take advantage of low-cost funds in overseas markets, solving difficult financing problems; at the same time, it also provides a financing platform for enterprises “going offshore,” and is conducive to fostering international competitiveness in local multinational companies. In addition, the offshore market can encourage Chinese financial institutions to accept otherwise-daunting international competition, improve service levels and innovation capacity as quickly as possible, and for China’s benefit, create favorable conditions for carrying forward capital account reform.

What challenges is the establishment of current offshore yuan markets facing?

Chen Yulu: Right.  Although the establishment of offshore renminbi markets is accelerating, some of the main obstacles must be overcome as quickly as possible. First, we  lack an efficient, secure and cost-effective offshore renminbi clearing system. This affects the willingness of domestic and foreign enterprises and financial institutions to use the renminbi and restricts the scope of offshore renminbi transactions. We need to set up a global offshore RMB clearing system of international scope as soon as possible, transforming it into a gross settlement system functioning in real time corresponding to the operating time.

Second, the current legal framework for offshore RMB market system has not yet been established. The establishment of the offshore RMB market must tackle conflicts in the field of international law, improving as soon as possible the terms of confidentiality, and implementing strict anti-money laundering procedures to curb the use of offshore financial centers to achieve illicit transfer of funds abroad. We also need to strengthen tax collection of international taxes on Chinese territory, to combat tax evasion and prevent loss of tax revenue.

Third, the offshore renminbi financial product chain and financial service capabilities of financial institutions are not yet ideal. The offshore business of Chinese financial institutions in general is still restricted to the traditional deposits, loans and international settlement business. There is an urgent need to achieve breakthrough innovation in financial product development. In addition to requiring more Chinese financial institutions to take on added functions, we must also encourage foreign financial institutions to develop businesses and innovative products.

Fourth, once the offshore financial market reaches a certain size, it will impact on the mechanism of onshore market interest rate and exchange rate formation, which may weaken the effectiveness of monetary policy, creating new challenges for the domestic financial regulatory system. Offshore renminbi market transactions will make interest rate and exchange rate determining mechanism more complex, and even affect yuan pricing. This requires the combination of two-rate marketizing reform, and the application of the scientific method in research and in the regulation of the monetary policy system. Establishment of a new macro-prudential financial regulation mode, accommodation of the offshore market within the monitoring range, strengthening international cooperation in financial supervision, and ensuring a smooth-running offshore RMB markets, and rapid, sound development.