Golden ruleThe UK Telegraph has released an interesting article discussing the future of the US dollar.
Every SD reader needs to read this article.   Not only does it provide an excellent overview of the situation, it is the first hint from a mainstream media source of what we have been covering here for several years:
The possibility of a new virtual asset backed currency backed by Central Banks

Submitted by Larry White

This is such a great article it will save me a lot of time. Here is some info on the author of this article Liam Halligan.Instead of attempting to layout the future of the change that may be coming myself, I can just let the UK Telegraph article do the talking. Here some interesting key quotes:

. . . . .”And for the past 70 years, the dollar has ruled the roost.
This won’t change anytime soonSomething just took place, though, which illustrates that dollar reserve currency status won’t last forever and could be seriously diluted. Last week, seven decades on from Bretton Woods, the governments of Brazil, Russia, India and China led a conference in the Brazilian city of Fortaleza to mark the establishment of a new development bank that, whatever diplomatic niceties are put on it, is intent on competing with the IMF and World Bank.

It’s long been obvious the BRICs are coming. The total annual output of these four economies has spiralled in recent years, to an astonishing $29.6  trillion (£17.3 trillion) last year on a PPP-basis adjusted for living costs. That’s within spitting distance of the $34.2 trillion generated by the US and European Union combined.

America’s GDP, incidentally, was $16.8 trillion on World Bank numbers, and China’s was $16.2 trillion – within a whisker of knocking the US off its perch. The balance of global economic power is on a knife-edge. Tomorrow is almost today.  just let this UK Telegraph article talk for me. I will post some key quotes from this article and then add a few comments. Here are the quotes first.”

Although the dollar’s reserve status won’t end overnight, the global payments system is now moving inexorably towards that outcome. The US currency accounted for just 33pc of all foreign exchange holdings in 2013, on IMF numbers, down from 55pc in 2001.

Within a decade or so, a “reserve currency basket” may emerge, with central banks storing wealth in a mix of dollars, yuan, rupee, reals and roubles, as well as precious metals. Perhaps some kind of synthetic bundle of the world’s leading currencies will be developed, with emphasis placed, after years of western money-printing, on assets backed by commodities and other tangibles.

I also believe central banks may include cyber-currencies (such as bitcoin) in their reserves. If you think that’s mad, consider that mankind has long sought scarcity – be it with shells, stones or metallic elements – to store wealth. Now the money-printing taboo has been broken by yet another generation, it makes sense to use complex computer algorithms to ensure that only a certain amount of a particular currency unit can ever exist.”

My added comments: I absolutely do not think it is “mad” to consider the idea that central banks “may include cyber-currencies in their reserves.”  In fact, we have been talking about this here all year long in articles like this and like this. It is nice to see a mainstream publication suggest this concept because it confirms what we have been reporting here.

This story also confirms the general time frame I have gotten from sources I view as credible inside the system. I believe the general view is that over the next 5-10 years we will see a transition from the current US dollar based system in order to address the problems in the current system. If there is a sudden, unexpected systemic crisis, that would change things. But I believe this is the time frame for change that is the prevalent thinking within the current system.

I can add that the cyber-currency under consideration is absolutely not Bitcoin. We have a recent update from Klickex on the status of their GSD (virtual asset backed currency) including an estimated  timetable for implementation if all goes as planned. We are planning an article in the future on this once we get some additional information that will allow us to expand on the story. It looks more and more like we will see some visibility on this story this year. For now, its nice to finally have some company talking about a central bank backed and asset backed virtual currency. It has seemed lonely out here 🙂

  1. Hmmm
    BRICS GDP is nearly that of the US and UK
    The BRICS GDP consistly mostly manufacturing and commodity production
    The US and UK GDP
    Hamburger flipping and FIAT printing
    Obama beats swords into food stamps while Putin turns the flexible President into Gumby.
    O has a phone and a pen
    V guns, tanks and helicopters

    I can see Vlad’s footprint on Obozo’s behind from my house

    • Not that I am going to argue the logic of your post, but still wanted to mention we should stop looking at GDP numbers. They don’t show anything. This is an illusion. Just a few examples. You go to a country like China or Thailand and pay for accommodation 5 dollars a night at some 2-3 star hotel and let’s say 50-60 bucks in a very good hotel which will correspond in the States to 60-80 bucks at some motel and 300 bucks for a luxury place. The food numbers are the same. How does it make GDP of China or Thailand smaller or their standard of living lower? All these exchange rates were created to milk other countries of their resources.  If a worker in Peru or Russia makes, for the sake of argument, 40-50 rubles an hour and 1 dollar exchanged to 36 rubles that means you are buying an hour of Russian labour for ~$1.25. Excellent deal. So the commodities that are coming from those countries cost less. This is how you run an empire. This is exactly why you guys had your Revolution and Independence from Britain. 100 years ago you were turned into colony of Britain again, so was Russia after demolition of the Soviet Union, so were many other counties (if not all), including Ukraine.
      BRICS and RECP countries decided to break away from this system. Therefore you can expect destabilization close or within the borders of those countries by means of “Colour revolutions” or different type of “Springs”.

    • Correctamundo Promy   The US GDP is colored by the fact that 43% of our GDP is the spending by the Federal, State and local govermnents.  so the third product of this once glorious country is homogenized horse crap courtesy of the DBags in government offices

  2. What a poor article… there is nothing “scarce” about digital currencies when new ones are coming out every freaking week.. they are just yet another faith-based fiat fad.
    And asset backed currencies are just as ridiculous. Want some silver certificates? I’ll sell them to you at spot price… surely Mr Obama will honor them.

  3. @AGX!!K
    Agree 110%.
    The longer this fool stays in power the worse things are going to get on the geopolitical front.
    It makes me squirm everytime I listen to this guy on Tv.Only one person makes me squirm more and that person is John Kerry.
    Never have I seen such incompetence/stupidity in US foreign policy.
    You have a chess master facing off with a checkers novice.Who is going to win in the end! lol
    Unfortunately the majority of sheeple cant see the this train wreck in motion    and when it finally hits the wall there’s going to
    be hell to pay for the 99%.

    • Different things make me squirm… mostly its the dead wood in the Repub party like McCain, Graham, McConnell, and Boner.  Yes, I know that he pronounces it differently but this IS how it would be pronounced in Germany, the home of his ancestors.  I know this because I used to know a German family named “Boehn” and they pronounced it “Bone”.  Anyway, without these too long in the tooth people the younger Repubs with MUCH better ideas and the energy to implement them would be able to do just that.  These fossils are almost as big an impediment to progress as is Klummac himself.  The need to lead, follow, or get the hell out of the way.  They have demonstrated that they are no good at leading or following, so…
      As to the train-wreck in progress, their only comment AFTER it leaves the tracks and hurtles into the yawing abyss between the mountain peaks on both sides of the tracks will be… TA-DA!… “Who could have seen this coming?“.  I suggest that everyone who isn’t brain-dead has seen this coming for some time now, so that lets out the vast majority of the sheeple.

  4. inlikeflynn
    Lurch looks like the bastard step child of Andre the Giant, only uglier
    Putin is also a third degree black belt in judo.  Allowing for a martial arts mulligan in belts for Vlad, he uses the thrown weight ineptitude of Obama to pin this Dbag on the mat, calling uncle everytime.  The foggy bottom crowd and Soros just smile and wait.

  5. “the dollar’s reserve status won’t end overnight” let’s hope that crutch of reasoning holds true for the unprepared.  The central banks can go back to sea shells if that’s what they like.   They can back their currency with lollipops for all I care. 

  6. I don’t want to dwell on crypto currencies longer than to ask. If they were truly taken up, let’s say bitcoin for now, how big would the block chain be? What sort of processing power would be required to transact?
    I have thought about cryptos for a while (hi RGR 😉 hope you’re well mate). But still a hard asset guy.
    Physical PMs seem logical to me to curb the bullshit fractional greed that has infected the world.
    Just let them float next to other currencies without the manipulation of paper crap. FIAT, Cryptos, PMs, commodities all available.
    Let’s see where true value lies.

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