Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Central Banks and The Dollar Hitting the BRICS

Politics / Emerging Markets Jul 18, 2014 - 02:36 PM GMT

By: Dr_Jeff_Lewis

Politics “We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US $100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements.... The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures.”


Parallel phenomena are trickling their way up from the darkness in monetary sentiment. It may be symbolic for now, but the politics in the U.S. with the symbolic and the organizing structure of alternative reserve currencies represent yet another shift toward a phase transition in dollar confidence.

The BRICS and Their $3 Billion

Ultimately, these BRIC- sovereigns are acting the same as any prudent investor.

They are diversifying. They are venturing out as a natural consequence of the dollars fading preeminence.

They are attempting to reduce dollar exposure. But they are also testing the limits.

They can't do it too fast, or they will miss the opportunity.

And then there was this...

End the Fed whispers, political limits of printing coincide with the final frontier of fiat.

Earlier this week, politicians proposed a bill that would limit the powers of the Federal Reserve.

The actions this week by House Republicans indicate that there is a legitimate risk that the Fed "may reach the political limits of money printing."

This is a bit late and purely symbolic.

The Fed is fully captured by the Treasury.

Politics will not stand for deflation - as it would destroy the banking system and the elite oligarchs.

It is the same issue with the debt ceiling. The debt ceiling can never be permanently removed without triggering the end of what is left of dwindling confidence in the dollar.

Everyone knows we are in a currency war - but no one "wants" to understand in a visceral way.

But it’s too late. Bailouts will happen again to the surprise of everyone, including lawmakers.

Confidence is like skin in the game and the current financial system is the poster child for the absence of flesh.

Which isn't much of a stretch considering that the entire house of cards is based on debt and confidence to begin with.

The inflection point will come and change everyone's perspective all at once.

At this point it is like attempting to explain certain phenomena that can only be experienced on a personal sense in order to fully embrace it.

I have spent a lifetime in the ocean, surfing in large swell conditions.

My home beach is a typical beach-break set up. Exposed to open ocean energy. Waves break along outer sandbars and come straight in toward the beach. The journey to the outside where wave energy first reaches outer sandbars is often a brutal ordeal.

One faces rolling trains of exploding energy in sets of 10 or more a few seconds apart - and no channel around them.

It requires a lot of patience, endurance, and a bit of strategy and luck.

Much like being a long term physical precious metals investor enduring decades of blatant manipulation and very little reward.

The rest of the world has a different idea of surfing. Dreams of lifestyle and a different idea of money and currency.

The rest of the world partakes in a point break, where waves gently wrap around an elbow of land and anyone can access the impact zone by paddling around the inside.

This can be dangerous because too soon people often find themselves in a situation that in reality is much different than what they originally planned for.

Mike Tyson is often attributed with the expression "Everyone has a plan when they step into the ring...until they get hit in the face."

There is an advantage to paying dues - with skin in the game; especially when it comes to the phase transition.

The Black Swan will be like the first punch in the face. Most think they will see it coming and have time to react. The reality is always different.

All of the bubbling exuberance we see - what appears to be a slow tributary often relegated to the fringe, is just part of a larger phenomenon. The fall of paper currencies will occur gradually and then arrive all at once in one big confusing geometric collapse that no one saw coming except for a tiny few.

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2014 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in