Swiss inch towards renminbi hub dream

Greg Williams · Jan 17, 2014

Swiss inch towards renminbi hub dream

News that Switzerland's central bank recently opened talks with its Chinese counterpart to swap currencies has raised Swiss hopes of attaining a renminbi hub status.
Click to expand...

As global renminbi (RMB) transactions gather pace, a tantalising vision has emerged of a new international reserve currency competing with the dollar, euro and British pound. Financial centres are jostling to enjoy the prestige and profits of becoming RMB conduits.
Click to expand...

In December 2012, the Swiss government officially announced its intention of becoming a renminbi hub.
Click to expand...

Read Full Story >>> http://www.swissinfo.ch/eng/busines...renminbi_hub_dream.html?cid=37639498&link=cto

Byron · Jan 22, 2014

Greg Williams said:

Swiss inch towards renminbi hub dream

News that Switzerland's central bank recently opened talks with its Chinese counterpart to swap currencies has raised Swiss hopes of attaining a renminbi hub status.
Click to expand...

As global renminbi (RMB) transactions gather pace, a tantalising vision has emerged of a new international reserve currency competing with the dollar, euro and British pound. Financial centres are jostling to enjoy the prestige and profits of becoming RMB conduits.
Click to expand...

In December 2012, the Swiss government officially announced its intention of becoming a renminbi hub.
Click to expand...

Read Full Story >>> http://www.swissinfo.ch/eng/busines...renminbi_hub_dream.html?cid=37639498&link=cto
Click to expand...

A strange article. I took it to mean that the Swiss banks want a bigger share of hot Chinese money leaving china.

I also think they are shooting themselves in the foot by signing a FTA.

Finally the Swiss should have kept their partial gold standard instead of getting rid of it back in 2000. They had a unique system, now the franc is just another fiat currency

tolly_67 · Jan 22, 2014

More dreams here....the chinese currency is a long, long, long way from overtaking the u.s. dollar as a world currency.
It lacks depth, it lacks market size, it is not floating etc etc.................hardly prime stuff for a world currency.

boston · Jan 22, 2014

tolly_67 said:

More dreams here....the chinese currency is a long, long, long way from overtaking the u.s. dollar as a world currency.
It lacks depth, it lacks market size, it is not floating etc etc.................hardly prime stuff for a world currency.
Click to expand...

Possibly true.

However, I can't help but feel that the days of the US$ being the sole world reserve currency are coming to an end very fast.

Whilst I have nothing concrete to back this with, I wouldn't be surprised if the US$ is relegated out of it's reserve status role, within 2 years.

tolly_67 · Jan 22, 2014

Within 2 years I would expect that failure of the euro and the mega problems in europe with potential sovereign defaults will drive the u.s. dollar to record highs............the u.s. dollar is far from dead and there is no other currency to go to when nations start to crumble.

Clawhammer · Jan 22, 2014

Its my dream too.

JulieW · Jan 22, 2014

Here's something to think about:

"The IMF is explicit in its antidemocratic leanings, what it calls "political considerations". The SDR blueprint calls for the appointment of "an advisory board of eminent experts" to provide direction on the amount of money printing in the new SDR system. Perhaps these "eminent experts" would be selected from among the same economists and central bankers who led the international monetary system to the brink of destruction in 2008."
James Rickards, Currency Wars, Penguin Group, 2011
Click to expand...

http://www.silverdoctors.com/the-big-reset-why-china-bought-jpmorgans-gold-vault/

Middelkoop had written four books in Dutch when he decided to switch to English, his latest book has just been relesed: The Big Reset. This book is about the War on Gold and the plans behind the scenes to create a new gold-backed world reserve currency.

we now have arrived at the point where it is not the banks, but the countries themselves that are getting in serious financial trouble. The idea that we can 'grow our way back' out of debt is naive. The current solution to 'park' debts on to the balance sheets of central banks is just an interim solution. A global debt restructuring will be needed, as economists Rogoff en Reinhart recently explained in their working paper for the IMF. This will include a new global reserve system to replace the current failing dollar system, probably before 2020.

So you are not on your own with this call?

Right after the near death experience of the global financial system at the end of 2008 the IMF and others started to study the possibilities for a next phase of the financial system. In 2010 the IMF published a study titled 'Reserve Accumulation and International Monetary Stability' for a financial system without a dollar anchor. The United Nations called for 'a new Global Reserve System' based on the IMF's Special Drawing Rights (SDR's) a year later. The SDR was created in 1969, at the time the London Gold Pool couldn't hold gold at $35 and the U.S. lost over 10,000 tons of gold because countries like France and the Netherlands returned excess dollar reserves to the U.S. treasury and demanded physical gold. This development led to the end of the gold backed dollar in August 1971, when President Nixon closed the gold window and the first dollar crisis started. It led to the run up of gold towards $880 in 1980. The UN idea is endorsed by China who has publicly stated several times that it is dissatisfied with the present dollar-orientated system. In 2009 China's Central Bank Governor Zhou Xiaochuan advocated a new worldwide reserve currency system. Late 2013 the Chinese state press openly called to 'de-Americanize' the world'. In an official op-ed the idea for 'the introduction of a new international reserve currency to replace the dominant U.S. dollars' was mentioned again. According to the London based think thank Official Monetary and Financial Institutions Forum (OMFIF) it will take many years before the renminbi will mount a credible challenge to the dollar. The euro is not suitable either.

How will this change unfold?

Our financial system can be changed in almost every way as long as the main world trading partners can agree on these changes. Two major problems in the world's financial system have to be addressed, the demise of the U.S. dollar as the world reserve currency and the almost uncontrollable growth of the worldwide mountain of debts and central banks' balance sheets. A reset planned well in advance can and probably will consist of different stages. So currently the U.S. together with the IMF seems to be planning a multiple reserve currency system as a successor of the current dollar system. But this system which still include and center around the dollar, but other important currencies will be added at its core. OMFIF has published an interesting study last year. They remarked:

'This marks the onset of a multi-currency reserve system and a new era in world money. For most of the past 150 years, the world has had just two reserve currencies, with sterling in the lead until the First World War, and the dollar taking over as the prime asset during the past 100 years. The pound sterling has been in relative decline since the Second World War. The birth of the euro in 1999 has turned the European single currency into the world's no. 2 reserve unit, but it has been now officially accepted that the dollar and the euro share their role with smaller currencies. The renminbi has attracted widespread attention as a possible future reverse currency. But it's still be some years away from attaining that status, primarily because it is not fully convertible.'

Some American insiders have even been calling for a return to the gold, isn't it?

In an open letter to the Financial Times in 2010 titled 'Bring back the gold standard', the very well connected and former President of the World Bank Robert Zoellick pointed out he wants to use gold as a reference point in order to reform the current failing financial system. Mr. Zoellick explained an updated gold standard could help retool the world economy at a time of serious tensions over currencies and U.S. monetary policy. He said the world needed a new regime to succeed the 'Bretton Woods II' system of floating currencies, which has been in place since the fixed-rate currency system linked to gold broke down in 1971. He said the new system

'is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi. The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.'

According to the famous publisher Steve Forbes, who was also an advisor for some of the presidential candidates in 2012, 'the debate should be focused on what the best gold system is, not on whether we need to go back on one.' So it was at no surprise for me to see an interview with professor Robert Mundell in Forbes magazine, in which he argued for a return to the gold standard. Mundell can be seen as one of the architects of the euro, and has acted as an advisor to the Chinese government as well. Mundell said:

'There could be a kind of Bretton Woods type of gold standard where the price of gold was fixed for central banks and they could use gold as an asset to trade central banks. The great advantage of that was that gold is nobody's liability and it can't be printed. So it has a strength and confidence that people trust. So If you had not just the U.S. dollar but the U.S. dollar and the euro tied together to each other and to gold, gold might be the intermediary and then with the other important currencies like the yen and Chinese Yuan and British pound all tied together as a kind of new SDR that could be one way the world could move forward on a better monetary system.'

And China supports these ideas for a currency reset?

As you know Chinese Central Bank Governor Zhou Xiaochuan advocated a new worldwide reserve currency system as early as 2009. He explained that the interests of the U.S. and those of other countries should be 'aligned', which isn't the fact in the current dollar system. Zhou advised to develop the SDR's into a 'super-sovereign reserve currency disconnected from individual nations and able to remain stable in the long run'. According to some experts the IMF needs at least five years more years to prepare the international monetary system for a worldwide introduction of SDR's to be used worldwide. Some doubt if we will have the luxury to wait that long. The fact China is stopped buying U.S. Treasuries in 2010 and have been loading up on gold ever since tells a great deal. Chinese high level officials have indicated China wants to grow their gold reserves 'in the shortest time' to at least 6,000 tons, in anticipation for the next phase of world financial system. A recent report by Bloomberg suggest The People's Bank of China and private investors has been accumulating over 4,000 tons since 2008. The Chinese are afraid the U.S. could surprise the world with a gold revaluation. Wikileaks leaked a cable sent from the U.S. embassy in Beijing early 2010. The message, which was sent to Washington, quoted a Chinese news report about the consequences of such a dollar devaluation as it appeared in Shanghai's Business News:

'If we use all of our foreign exchange reserves to buy U.S. Treasury bonds, then when someday the U.S. Federal Reserve suddenly announces that the original ten old U.S. dollars are now worth only one new U.S. dollar, and the new U.S. dollar is pegged to the gold we will be dumbfounded.'
Click to expand...

And why buy a great big building like the JP Morgan Vaults?

Additional proof of the Chinese knowledge about the gold price suppression can be found in message leaked by Wikileaks from the American Embassy in Peking about a Chinese newspaper report:

'The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB.'

The office building of JPMorgan with its largest private gold vaults at Chase Manhattan Plaza, opposite to the New York Federal Reserve building, has been recently sold to the Chinese. This indicates the US and China seem to be working together in advance towards a global currency reset whereby the US, Europe and China will back the SDR's with their gold reserves so the dollar can be replaced.
Click to expand...

tolly_67 · Jan 22, 2014

All well and good except that the Euro is destined to fail due to the very nature of its existence........as Europe falls, so will the Euro....this basket of currencies that they talk about are all part of sovereign countries with incredible debt, apart from China that has a controlled currency.
This basket has some serious holes in it and somehow gold will hold it all together....................more dreaming

TreasureHunter · Jan 22, 2014

The demand for the yuan is increasing. Look at the 10 year chart - how much the US dollar has lost to the renminbi:

Get your renminbis fast, because the demand is growing!

tolly_67 · Jan 22, 2014

Don't worry, they print more than enough of them to go around.....

Log in or Sign up

Swiss inch towards renminbi hub dream

Greg Williams Well-Known Member Silver Stacker

Byron Guest

tolly_67 Well-Known Member

boston Well-Known Member Silver Stacker

tolly_67 Well-Known Member

Clawhammer Well-Known Member Silver Stacker

JulieW Well-Known Member Silver Stacker

tolly_67 Well-Known Member

TreasureHunter Well-Known Member

tolly_67 Well-Known Member

Share This Page

Log in or Sign up

Swiss inch towards renminbi hub dream

Greg Williams Well-Known Member Silver Stacker

Byron Guest

tolly_67 Well-Known Member

boston Well-Known Member Silver Stacker

tolly_67 Well-Known Member

Clawhammer Well-Known Member Silver Stacker

JulieW Well-Known Member Silver Stacker

tolly_67 Well-Known Member

TreasureHunter Well-Known Member

tolly_67 Well-Known Member

Share This Page

Useful Searches