O que é dinheiro em si mesmo?

[Alexandre César Weber]

A curiosidade matou o gato, mesmo assim....

[Alexandre César Weber]

A mitologia em volta dos mitos criadores e em especial os relacionados à Terra e suas entranhas é tabu em muitas religiões, este texto traz uma luz sobre isto.

The Heart of the Earth.



"The "Earth" Mother takes her name from her Sacred "Heart", the Earth Core. Among the many names of
the Earth Core is "Aeon" Father of Time. Over time (over the "Aeons") the Earth and her Heart/Core have
been worshipped one God, or as two separate (and yet inseparable) Gods; when the Father Sun is
included they are worshipped as a Trinity (Three Gods).

As Kor/Aeon (and a multitude of different names), the Earth Core is "God the Son" as Ceres and Kore
(and again, a multitude of different names) the Earth Core is "The Holy Virgin" and "The Immaculate Heart"
of the Earth Mother. After centuries of revising canonical books, nearly every trace of Earth Mother and
her Immaculate Heart has been removed from Christian literature, but to the scholarly and discerning eye
the Divine Earth and her Immaculate Core/Heart are very present.

Gnostic scriptures cast off the revised cannon and reverted to the older texts, accordingly "Eve Earth
Mother" not only created "Adam Core Son" but Adam was the very soul "within his mother". Some Gnostic
texts reverse this order and say that "Eve The Virgin" is the soul within "Adam the Father", either way they
understood the concept of a God within a God, i.e. the Heart within the Mother.

Gnostic texts state that Adam could not exist without "power from Earth Mother" and "Earth Mother is she
who creates all creatures and works at them, she who set Adam up in his own perfect temple (her womb)
and enlightened him on the origin of his deficiency, and showed him his ascent." Adam's deficiency is this
Gnostic sense, was "light", as he was contained in the darkness within the Earth Womb/Cave.

Porphyry said "before there were temples, all religious rites took place in caves." The cave was, and is,
universally identified with the womb of Earth Mother, the place for birth and regeneration. Etruscan and
Roman temples featured a subterranean "mundus" literally "Earth" and "Womb". The Sanskrit word for a
sanctuary if "garbha- grha" literally "womb". Through Earth Mother's intervention Adam was able to
separate from her "ascend from her womb" and rise above the Dark imposed on him. Holy "Gombas" (holy
hermitages) were first established in underground caves representing the Earth Yoni.

By the Gnostic route came the Midrashic assertion that Adam and Eve (Earth and Core) were originally
androgynous, Like Shiva and Shakti. He dwelt in her, and she dwelt in him, they were two Gods united in
one body. To sustain his own life, and the life of all creatures, the Sun God tore the Divine Couple apart.
To sustain his life and that of humans, animals and plants, the Sun God deprived the androgynous Earth
and Core of their blissful union. Cabalists said that Eden could only be regained when the two Gods (Earth
and Core) are once more united: the male Kor must be united with his female counterpart Earth or
mankind would not achieve Paradise. The androgynous Gods could only be united within the body of the
Sun God.

In one Gnostic version the Sun God expels the androgynous pair from paradise because he finds them
unworthy of union within him. "For your children have sinned against you and sinned against me. " He has
union with the innocent younger sister of "Eve " (also named Eve) and with her he has two sons (divine
Twins) variously named "Javeh" and "Elohim", "Cain" and "Abel", "Phobos" and "Deimos" (the divine Twins
have many names). Eve's first child "Javeh/Phobos" ruled over the male elements of fire and air, and her
second child "Elohim/Deimos" ruled over the female elements of earth and water. Some of the old sacred
books, such as the Apocalypse of Adam stated that Adam/Core/ Aeon and Eve/Earth were created
together by the "Sun Father" but Eve/Earth was superior to Adam/Core/ Aeon. The same books attribute
Eve/Earth with creating only the physical body/shell of mankind whereas Adam/Core/ Aeon is considered
to have breathed life into all of Eve' s creations.

Other books consider Adam/Core/ Aeon to be the single creator God and attribute to Eve only the creation
of the empty physical shell: "Eve wrought within her the glory of the Aeon from which we all came forth."
Some books claim it was not Father Sun, but it was Mother Earth/Eve who gave Adam/ Aeon his soul and
brought him into existence. It was Mother Earth/Eve who cast out her evil children and forced them to live
away from her as dark angels. She, as the Mother had judged the children she created and found them
guilty, and destroyed them (Robinson).

Christianity projected mans fear of death onto the Mother image and Father God (Father Sun) took
preeminence. The un-canonical scripture pictured Earth Mother as the defender of mankind against the
Sun deity. In this portrayal Father Sun condemns the evil children to leave his domain and dwell forever in
dark cold away from the Sun. The depiction of a condemning Father had more adherents in the early
Christian centuries than the picture that is now familiar. One of Christianity's best-kept secrets is that the
Mother of All Living, the Creatrix who chastised her evil children, and condemned them to the dark, is Earth
Mother.

Modern science still refers to the "Earth Heart" by the old name "Core".

"Ab" was the Egyptian word for "Earth Heart" and the same word, "Ab" meant "Earth Soul". The "Ab" was
also the human soul that would be weighed in the balances of "Maat", after death, in the Earth Mother's
underground Judgement Hall. "Maat", the Earth Mother as the personification of "Truth" and "Justice" takes
her name from "Ma" the "mother" syllable of Indo-European languages, worshipped in itself as the
fundamental name of the Earth Goddess. The Plume of Maat was the hieroglyph for "Truth". (The
Feathers of Truth were worn by Law Giver aspects of the Earth Mother, Isis being one example and
Babylonian Tiamat being another.) In the Far East "Ma" in pictographic form symbolizes the "Spark of Life"
(bindu). In Indo-European root languages "Ma" was defined as "intelligence". In Egypt the maternal "force"
or "energy" of the Earth Mother, the "Ma-Nu" was the "All Seeing Eye" in the Earth Belly. The hieroglyph
for the "Ab" was a dancing figure and as a verb it meant, "to dance" the mystic Dance of Life, the "Heart
Beat". The "All-Seeing-Eye" in the Earth Belly was sometimes represented by a dot (fetus) inside a
pregnant belly and the same hieroglyph was used for the name of "Amen" the "Hidden God" who dwelt in
the Earth Womb/Heart. Ma-ma means both "mother's breasts" and "mother" in almost all languages.

The Egyptian Book of the Dead addresses prayers to "The Heart of my Mother, The Heart of
Transformations, the Source of Rebirth." So vital was the Earth Mother Heartbeat in Oriental religions that
the Tantric sages held the Earth Heart to be the center of the Universe. This center, "Chidambaram" was
the place where Shiva danced the "Rhythm of Life." The Indian sages said, "Sound (Nada) is made
manifest in the Earth's Heartbeat", and when the yogi hears the "Nada" he is listening to the Heartbeat of
the "Absolute".

The concept of the Earth's Heart Dance was upheld in early Gnostic Christianity, when Christ was equated
with Shiva, the "dancer within." In the Acts of John Christ said to his disciples: "To the Universe belongs the
dancer. He who does not dance does not know what happens. If you follow my dance, see yourself in me
who am speaking. You who dance, consider what I do, for yours is this passion of Man which I am to
suffer." The dancing Earth Heart evolved into the Sacred Heart of Christ's Mother in the late 17th century
with the church claiming that the Sacred Heart began with the vision of St. Margaret Marie Alacoque
(1675), but the concept of the divine Earth Heart-Soul at the Core of the Earth, "Osiris The Heart of His
Mother" and Shiva Sacred Heart thrived long before Christianity.

The human "Ab" was considered by the Egyptians to be a splinter of the Earth's "Ab". In Egyptian worship
the "Ab" was the "essence" of the Mother Earth and as such it was a spark of her divinity in mankind. This
divine spark did not, however, make man divine; rather it gave man the opportunity to attain to a state of
perfection. Man's purpose was to bring his entire being into the same state of perfection as the inner
divine spark given by his Goddess Mother. Without her "essence" he would be lost in sin. After death the
human "Ab" would descend to the Judgement Hall where the Earth in her rebirth aspect of "Hathor", would
balance the human "Ab" against her own "Ab" which the Egyptians called the "Feather of Truth". The
circumstances of the next life were contingent upon the weight (state of perfection) of the human "Ab".

The Cowrie shell, still used as a sacred amulet, takes its name from "Kauri" a cognate of "Kore" the "Earth
Yoni/Heart". World wide, people still regard the cowrie shell as a symbol of the divine "Earth Womb" and it
is carried in small pouches, or worn on the body, to convey both birth and rebirth. In the Solutrean period,
ca. 20,000 B.C. cowrie shells were integral to burial rites, and the garments of dead were intricately
decorated with cowrie shells. Egyptians were one of many races who decorated sarcophagi with cowrie
shells as birth and rebirth charms. Cowries are still prized throughout the east for their regenerative
powers. They are valued in India as amulets to protect against the evil (right) eye. Moslem women wear
cowrie shells (as a symbol of the Earth Womb) during pregnancy to ensure a safe delivery.

In Japan cowries are kept in drawers and cupboards around the house for luck. Worldwide, gypsies still
value cowrie shells above all other protective amulets. Christian Sudanese carry a strip of leather stamped
with the crucifix and strung with nine cowrie shells as an amulet of rebirth. Romans called the cowrie shell
matriculus, "little matrix" symbol of Alma Mater "Soul Mother." Earth Mother is the great "Teacher Priestess"
and students still "matriculate." The Romans called the cowrie shell "porcella", "little sow" because the
cowrie stood for the Goddess Earth as the Great Sow, as did Demeter, Astarte, Ceres, Freya, Cerridwen,
etc. From "porcella" came the word "porcelain", because porcelain resembles the white glazed surface of
the shell.

The antiquity of cowrie symbolism in the Middle East is shown by the ancestor-skulls preserved by the
inhabitants of Jericho in the 7th millenium b.c. Forerunners of the Jewish "teraphim" they were severed
from the body, given features of painted plaster, and eyes of cowrie shells. Reverend George Brown,
wrote of the Melanesians and Polynesians, "They hold the cowrie shell sacred, but why is not at all clear.
The native worship the Earth and will not talk about cowries at all." The natives were well aware that there
was no use talking to Christian missionaries about Earth Mother worship.

Creation "myths" are a symbolic view of birth from the Earth Heart/Womb. Conditions before creation
describe the uterine environment of Earth Mother's womb as: darkness, liquid, churning movement, an
eternal flux of "Magma Sanguine" (molten rock-blood - Kauri's Ocean of Hot Birthing Iron-Blood).

In Hinduism, as in most American Indian creation "myths" Earth Mother is said to have been birthed by Sun
Father: "When there was no life, when darkness was enveloped in Darkness, then the Earth Mother, Maha
Kali, the Great Power, was one with Maha Kala the Absolute who resides at the Center as the Sun."

The Bible says "darkness was upon the face of the Deep" and "The Deep" was "Tehom" the Earth Womb.
"Tehom" is derived from "Tiamat", the Babylonian name of the primordial Earth. In Egypt primordial Earth
was "Temu" Dark Mother of the "Abyss." In the Bible, as in creation "myths" the beginning of the world is
signaled by the coming of Light. Romans called Earth Mother "Juno Lucina" the Creatrix who brought light
to the world. "Khepera" the Egyptian God said "I laid the foundation of the Universe in "Maa" (the Womb of
Maat).

Some early belief systems endow the Earth Heart with the masculine gender and revere "Him" as "Father"
some refer the Earth Heart as her Daughter, others as her Son. The Earth Heart is revered as both a holy
Infant and as "Aeon" the "The Ancient of Days". In every case the Core/Heart is worshipped as God within
God. As the Greek Virgin "Kore" the Earth Heart/Soul is the Inner Soul-daughter of "Demeter" which
literally translates into "Earth Mother." Kore is a name so ancient and widespread it is known to have been
one of the earliest designations of the World Shakti (Female Spirit). Mohammed and his followers were
worshippers of Demeter and her heart/daughter Kore and the Moslem scriptures he handed down, "Koran"
bear testament to his worship of Earth Mother and her Sacred Heart to this day.

Variations of Kore include Kar, Ker, Car, Qar, Q're, Cara, Kher, Cere, Ceres, Core, Cora, Kora, Kaur,
Kauri all names for the Sacred Heart/Soul of Earth Mother. "Karma" is a combination-word of "Kar" (Kore)
with "ma" (mother). "Karma" is the maternal heart-power with which "Kauri-Ma" rules over human destiny.
The word "destiny" in itself is derived from the words "de" (Earth) and "stiny" (stone). The Earth's "Law of
Karma" is that individual evolution must be worked out by a series of reincarnations (reinCARnations)
through the turning of the great wheel of time, the "Karmic Wheel".

"Kauri" cognate with Malayan "Kari" was worshipped as the Primordial Creatrix Earth who conceived
mankind in her amniotic fluid (rivers). Many tribes still hear the voices of "Kauri" and "Kari" in thunder. The
French word for heart is "coeur", in Latin heart is "cor" and in Spanish heart is "corazon" all these words
are derived from "Core" the Sacred Earth Heart, the "Sacra Cardiac" of Earth Mother. Karnak in Egypt and
Carnac in Brittany were sites of gigantic temples over 5,000 years ago, these temples were dedicated to
"Kar" or "Kore" the "Sacred Earth Heart." France had similar temples in Kerlescan, Kercado, Kermario. The
word "Kermario" combined the Vigin "Kore" with her Divine Mother "Mari".

"Mari" is the basic Chaldean name of the Earth. The Chaldeans also called her Marratue, the Jews called
her Marah, the Persians Mariham. Other ancient Earth names with the same root are Marian, Miriam,
Mariamne, Myrrhine, Myrtea, Myrrha, Maria, and Marina. The sea "mer" and "mar" takes its name from the
Earth Mother. The Christian "Mary" is enrobed in blue and wears pearls, classic ancient symbols of the
sea. The Virgin Core/Heart and her Mother are embodied in "Kel-Mari". In Roman times the inhabitants of
Carnac and Carnuntum on the Danube called themselves "Carnutes" the "people born of the Goddess
Car", the Sacred Earth Heart.

In Egypt's early dynastic period there was an important shrine in "Kerma" a word combining the Virgin
Kore, "Ker" and her Mother "Ma". The Virgin daughter was worshipped as "Kara" by early Egyptian rulers.
Egyptians called Palestine "Kharu" the "Heart" of Earth. "Car" or "Carna" was known to the Romans as "the
Goddess's Heart" and her worship took place during the "Karneia" festivals of Sparta and the classic
Roman "Carnival" (Core navel) which is celebrated in modern times. The Core is also known as the Sacred
Navel of Earth Mother.

"Kore" is also called "Carmenta (literally, Car Mind) and in this context "Core" is the "Mind" of Earth Mother.
"Mind" and its origins in "Man" etc would occupy too much space to include here. As "Carmenta" the
Earth's Heart (daughter) invented the Roman alphabet, and in this context "Kore" is known as the "Word"
of "Demeter" Earth Mother. An extremely old temple on the Caelian Hill is dedicated to "Kore" as
"Carmenta Sacred Word".

A later variation of her name was "Ceres." Such words as cereal, corn, kernel, core, carnal, cardiac all
have their origin in "Ceres" or "Core." Every day English is resonant with words derived from the Sacred
Earth Heart/Core/Mind/Womb. When we use such words as carol (Christmas carol), care, car, cart, carry,
card, coral, cord (umbilical cord) and cardinal, we unconsciously hymn the Earth-Heart. Even the humble
carpet is so-named for being underfoot, as is the Core. The Earth Mother and her Sacred Heart is
ever-present, on our tongues, she is unconsciously summoned in the middle of words such as "sacred"
and after death she lingers on in such as "corpse" and "carcass" when we "carry" her name into the grave
(grove) where we await "growth". The body of Christ is "Corpus Christi" with "Chri" being a derivative of
"Core" (as is "Krs" in Krsna").

In the east the "Heart of Mother Earth" was worshipped everywhere. She was called "Artemis Caryatis",
mother of the Caryatides of the Laconian temple of Caryae. The Tyrian seaport of "Carnaalis" (modern
Cagliari) was one of her shrines. Mount Carmel, one of the oldest shrines in Israel is another combination
word for the Virgin daughter and her Earth Mother. "Kore" was a great power in Coptic worship, worship of
"Kore" the Earth Heart flourished in Alexandria in the 4th century A.D. Her festival the "Koreion",
celebrated on January 6 was assimilated to Christianity as the feast of Epiphany. Kore's festival "Koreion"
celebrated the birth of the "Aeon" the New Year God to Earth Mother. During "Koreion" a naked figure of
Earth Mother was carried seven times around the temple, decorated with gold stars, while the priest
announced that Earth Mother had delivered her Holy Infant, "Aeon" (Aeon being identical to Kore).

The Koreion passed into British tradition as "Kirn" the Feast of Ingathering. The church later renamed
"Kirn" The Feast of our Lady of Mercy. "Kirn" was a cognate of the Greek "Kern" (Seed "Kernel") the
Sacred Womb in which the Grain God "Kor" or "Ker"was reborn. The Earth Mother's harvest instrument
was the a moon-sickle; the moon-sickle represented even the Christian version of the festival. Gnostic
sources state that Kore's abduction by Plutonius Zeus (the Sun God) took place because Plutonius Zeus
needed Kore in her capacity as "Fruit Bearer" and "Harvest Giver" to provide nourishment for all creatures.
Kore's festivals represented the seasonal return of vegetation.

Throughout time, "Kore" the Earth Heart has animated each human heart and creation/birth has been
inseparable from the figure of Earth Mother."

http://www.thekeeperoftime.com/earth_heart.html

[Alexandre César Weber]

I don't get it, if they can do this for the banks, why can't the fed create money out of nothing and lend to to mr terminator?
They can (the Fed could lend money created out of nothing to California.)

But they don't want to. They don't want to because it would destroy the dollar, which is the Fed's principle stock in trade.

Imagine for a moment you are an alchemist of several centuries ago, working on the problem of converting base metals into gold. Imagine you solve the problem. You figure out how to convert dirt by the ton into gold, instantly, ton for ton. You could convert an entire mountain if you chose, with a wave of your hand.

The King, his trusted advisors, and you and your assistants decide to keep this a secret. If everyone realized that gold was now really only worth dirt, then much of golds power (and likely your life) would be lost. The King needs to be careful to keep gold payments within the bounds of expectations of the kingdom's subjects and the neighboring kingdom's merchants, so that they continue to value this gold highly, as before.

Back to reality ... For centuries, the "gold standard" for a kingdom's currency was gold or some other precious metal. The natural limits on the supply of precious metals kept the money supply within limits. Such limits on the money supply are vital to ensuring that a dollar saved today is worth approximately a dollar earned tomorrow, and to providing a trusted basis for time honored contracts such as loans, savings, debts, tax rates, salaries and wage rates.

The United States switched over the period from roughly 1913 to 1971 to what's called a fiat currency but I call a debt based currency. Dollars and Treasury debt are interchangeable in a very liquid market, and Treasuries are (well, have been) the most trusted debt paper in the world. We switched in good part because the economy was naturally growing faster than gold could be found, causing a gold based currency to become too scare, hence provoking economic downturns for lack of sufficient money in circulation. (Well there is also a bad part of the reason for switching -- it gave Banksters a practical monopoly on money creation in America, as debt paying interest to the Banksters holding the debt, which is a way to great wealth.)

Whatever the monetary basis however, gold, debt or seashells, it is vital that the amount of money in circulation (be that physical currency in hand or demand deposits in trusted bank accounts) be kept in rough proportion to the amount of economic activity. The total amount of goods, services, resources and productivity available in a society at any point in time should maintain a constant proportion to the total amount of that society's currency in circulation at the same points in time.

If the worlds money lenders, including central banks, ever became convinced that the Fed had become trapped into "printing" its way out of a collapse, with no choice left to it other than to print more money to avoid debt default, then five or ten trillion dollars worth of Treasuries could arrive the next morning at the front door of the United States Treasury, demanding conversion to Dollars, which Dollars would be spent (if and when obtained) on buying stuff as fast as possible, all trying to unload Dollars and Dollar denominated debt before its value collapsed to zero.

Well, it doesn't go down quite that fast (I hope.) But it could get really ugly really fast. Our distinguished political and financial leaders really don't want to risk losing their power, their lives, their fortune and (in some cases I trust) their honor.

[Alexandre César Weber]

Nem o Greenspan sabe o que é dinheiro, assim não dá, só amador.

The Actual Money Supply
by Paul van Eeden
Toronto, Ontario


On February 17, 2000, then Federal Reserve Board Chairman, Alan Greenspan, was answering a question from Congressman Ron Paul during a House of Representatives Committee on Financial Services hearing, when the following exchange took place.

Mr. Greenspan: "Let me suggest to you that the monetary aggregates as we measure them are getting increasingly complex and difficult to integrate into a set of forecasts.

"The problem we have is not that money is unimportant, but how we define it. By definition, all prices are indeed the ratio of exchange of a good for money. And what we seek is what that is. Our problem is, we used M1 at one point as the proxy for money, and it turned out to be very difficult as an indicator of any financial state. We then went to M2 and had a similar problem. We have never done it with M3 per se, because it largely reflects the extent of the expansion of the banking industry, and when, in effect, banks expand, in and of itself it doesn't tell you terribly much about what the real money is.

"So our problem is not that we do not believe in sound money; we do. We very much believe that if you have a debased currency that you will have a debased economy. The difficulty is in defining what part of our liquidity structure is truly money. We have had trouble ferreting out proxies for that for a number of years. And the standard we employ is whether it gives us a good forward indicator of the direction of finance and the economy. Regrettably none of those that we have been able to develop, including MZM, have done that. That does not mean that we think that money is irrelevant; it means that we think that our measures of money have been inadequate and as a consequence of that we, as I have mentioned previously, have downgraded the use of the monetary aggregates for monetary policy purposes until we are able to find a more stable proxy for what we believe is the underlying money in the economy."
"Inflation and deflation are monetary phenomena and the recent decline in prices has only lead to confusion and further obfuscation of what is really going on."


Dr. Paul: "So it is hard to manage something you can't define."

Mr. Greenspan: "It is not possible to manage something you cannot define."

Here we have possibly the most influential and powerful banker in the world, who is in charge of managing the most widely used money in the world - the U.S. dollar - telling us not only that he doesn't know what money is, or how to measure how much of it there is, but admitting that it's impossible to manage the money supply precisely because they have not yet figured out what it is or how to measure how much of it there is.

For something we use every day and that is an integral part of our lives, it is remarkable how little we know about money.

When the money supply increases (inflation) money loses value (prices rise). Because the money supply is almost always increasing (inflation), and therefore decreasing the value of money, it means that our standard of living is eroded over time if our income is fixed, or not rising as fast as the inflation rate (the rate of increase in the money supply). Yet there is no credible measure of the inflation rate. I have been searching for an answer to the actual inflation rate for more than a decade and there was none that I felt was accurate enough, so I had to design my own.

Actual Money Supply (AMS) is a tool that I created to measure the money supply in the United States and therefore the actual monetary inflation rate. The chart below is always the most recent one I have and is updated as data becomes available.



Because the monthly, year-over-year data depicted in the chart is so volatile I added a rolling 12-month average of the Actual Inflation Rate to the chart. The rolling 12-month average inflation rate is itself still quite volatile, but much less so than the actual monthly data.

It is interesting to note that the average rolling 12-month inflation rate averages 8.25% for the past 15 months. To put that in context, the average inflation rate from 1970 to 1979 was 8.32%. We are, absolutely, in a highly inflationary environment. Deflation is not only unlikely given the structure of the US banking system, but nowhere to be seen in the data either.

Demand destruction has had a severe impact on the prices of many goods and services, but that should not be confused with deflation. Inflation and deflation are monetary phenomena and the recent decline in prices has only lead to confusion and further obfuscation of what is really going on.

Monetary inflation is currently mitigating the price declines we are witnessing, meaning those prices that are declining would have declined much more were it not for the inflation, and will eventually cause prices to start rising again. Our greatest concern should not be with the current falling prices of goods and services, but with the rate at which they will rise in the future vis-à-vis our capital and income. I suspect there are very few people out there whose income and investments are keeping up with the inflation rate, which means their wealth is eroding in real terms.

I have also been aggregating and calculating similar money supply and inflation data for Canada and found that the Canadian dollar's inflation rates for 2007 and 2008 were much higher than the inflation rates of US dollar. However, the average inflation rates for 2009 thus far are exactly the opposite. Canada's inflation rate is falling while that of the US is remaining steady above 8%.

Year US CAD
2007 7.93% 9.55%
2008 8.31% 10.23%
2009 8.48% 6.89%

For those interested in gold, my fair value of gold for 2008 was $763 an ounce. Using the average of 2008 and 2009's inflation rates for the U.S. dollar, and gold's inflation rate for 2008, I come up with an approximate average value for gold of $815 for 2009. Please note that this is an estimate of the average value for the year, and not a year- end estimate.

Clearly the gold price is well above $815 an ounce, and has been so for quite some time. The macro economic environment has probably never been so obviously in favor of gold and it is my belief that the market has already priced much of this into the gold price. While I fully recognize gold's lure at these times, and the probability that the gold price could still increase quite substantially, I remain cautious about gold. Recall that investors who bought gold when it was grossly over- priced during 1979 and 1980 and then forgot to sell, suffered severe losses.

I would personally prefer gold to sell down to around $800 an ounce, where I know it represents good value, than buy gold at over-valued prices and hope that it keeps going up.

Regards,

Paul van Eeden
for The Daily Reckoning

[Alexandre César Weber]

Uma outra explicação de como o dinheiro se presta para manipular os seres humanos contra sua própria vontade e bem estar.

MONEY
Current mass manipulators carefully promote the less
than half truth that money is merely a medium of exchange.
If there were any occasion for the use of money within
a culture of individual sovereignty, money would be a medium
of exchange and only that. But in a worldwide culture
of sovereign individuals there would be no occasion to use
money. The early Northern Europeans rejected its use. The
early Greeks compromised; they used money but made a
point of ensuring that their money was in a form not acceptable
in trade outside their own realm.
The purposes of money other than its use as a mere
medium of exchange are what vitally concern us.
Money was conceived and created as a weapon of mass
manipulation. In Sumer, useful products became a "carrot"
of mass manipulation that supplemented the "stick" of manipulated
group force. Money was invented because the
manipulators needed to devise a way to fine tune their control
over the useful products.
From primitive times they had manipulated a word controlled
group powerful enough to take everything from
those who would not submit to word control. Now they decided
that they would not take everything from dissenting
individuals; they would take only a portion of what these
individuals produced so as to encourage them to keep producing.
This restraint on how much they took would lull
those who could not be controlled by words into passive
acceptance of the manipulators' - only partially used -
group-entity power. This system of making power inconspicuous
and encouraging continued production by taking only a
portion of what is produced is called taxation.
A convenient unit of measure for the new idea of taxation
was needed. That is the origin and the original purpose
of money.
63
A standard measure of grain was the first money. But
collecting tax in measures of grain, or a percentage of
one's cattle, was too cumbersome for the mass manipulators.
At that time metal was new, rare, and prized. It had
intrinsic value. In Sumer, about 4500 years ago, the manipulators
began to replace measures of grain with pieces of
metal as money. Taxes were imposed in coined money.
Coined money quickly came to represent the force of
the manipulators. They began to require that taxes be paid
in a piece of metal with the image of the "Caesar" on it.
To get the money to pay taxes one had to participate in
the increasingly complex system of mass manipulation. Payment
in coined money - the use of which was an unspoken
token of submission to measured force - staved off the use
of still greater force.
The image of the "Caesar" - not the intrinsic value of
the metal - soon came to be the important thing. Everyone
had to deal in the "coin of the realm." Accepting the use
of money was accepting one's dependence on, and submission
to, the power held by the realm's mass manipulators.
A significant aspect of money - which manipulators are
careful to omit from the school book definition - is our
major concern. It can be simply stated: A unit of money is
a unit of manipulated force that belongs to the forcecontroller
whose stamp is on the money.
The basic force behind the culture of mass manipulation
is a word controlled group used as a weapon against
any individual who opposes the manipulators. Initially the
force is expressed by killing and physical torture. As the
culture gains in power the mere threat of killing, physical
torture, or even imprisonment, is sufficient to enforce submission
to manipulation.
Then, as mass manipulation is accepted as the only way
of life, becoming one of the manipulators begins to appear
more desirable than submitting to manipulation. Acceptance
by the manipulated group - and status, "a position" within
the group - is actively sought. Money comes to be a symbol
of status. Money becomes "position" in the abstract, or an
instrument for acquiring a "position."
As people ponder the myriad ways that money can be
used and misused, the idea is likely to develop that money
64
is power in the abstract. It is not. It is the power of the
manipulators whose stamp is on it.
The idea that money is power in the abstract often
leads those who oppose mass manipulation to think that
enough money will restore their individual sovereignty. It
will not.
Ignorance of this fact induces those with much money
to hug to themselves the illusion that they, and their
friends who also have great amounts of money and so make
up a sort of exclusive society, have already reclaimed their
individual sovereignty. They have not. Money can only buy
for them the fawning, pseudo-respect that brainwashed
zombis give to their "sovereigns" - those who hold the
"highest positions" in the hierarchy of manipulators.
The illusion that individual sovereignty can come from
enough money keeps the people who have the time and ability
to do something effective toward establishing, or
re-establishing, the culture of individual sovereignty producing
for the manipulators. It also keeps them from taking
any action toward regaining their individual sovereignty.
They fail to realize that, among themselves, money is a
drug-sedative that mass manipulators are happy for competent,
aggressive, highly productive, individual sovereignty
people to have. It keeps them passive. The wealthy and
passive thereby join the "lower classes" that the priests
persuaded to accept money as payment for the wrong done
them. The only difference is the amount of money needed
to buy their honor.
In the world of international commerce, a very important
thing about money is this: Money is the power of a
government that can be given into the hands of anonymous
persons. It can be given into the hands of the enemies of
the government. History shows what can happen when this
is done.
Along with word control, money collected from the
people was a major tool the Catholic Church used to take
control within the Roman Empire. Money was the power of
the Roman Empire, itself. The Roman Empire's own money,
injected into the combination of words and force used by
the Church, worked so successfully that, in the end, kings
held their "position" because a pope placed a crown on
their heads.
65
Then, as kings revolted against control by the Catholic
Church, the struggle for power between mass manipulators
became more complex. Anonymous individuals began to use
the government's power that was packaged up in money. An
international organization of Jewish bankers, recognizing
that money is the power of governments that can be given
into the hands of anonymous persons, began to manipulate
the governments themselves.
The demonstrated fact that a group-entity other than
the openly recognized government - a church or an organization
of bankers - could use the government's own money
to destroy the government, itself, became impressive. Some
of the individual sovereignty people, who had seen their
culture destroyed by the clever priests, tried their hands at
using money as a weapon. They tried to form "honorable"
group-entities and use money to protect them from groupentities
that obviously promoted the culture of mass manipulation.
Wiser ones recognized that opposing cultures cannot be
mixed. They recognized the necessity for segregating themselves.
They sought out areas where they could hope to
continue the defense of the individual sovereignty culture
that had bred them.
66

[Alexandre César Weber]

Mais uma discussão sobre o papel do dinheiro na nossa sociedade, pontos de vista diferentes de um mesmo fenômeno.

Dinheiro e riqueza

Listen up, since this is one of the most important things you can
hear. I've already said much of this in my discussions on the basic
income, but it deserves saying again.

People don't understand economics - and I'll tell you why. It's
because people see the world in terms of money. Doesn't money make the
world go round? Sure; but it's only money. Money isn't wealth or
anything else but a book-keeping tool. That doesn't mean I think money
is bad - on the contrary, unless we reach a true 'post-scarcity'
economy (if ever), having money is clearly better than not having it -
no modern society has ever been able to do without some sort of money.

So if money isn't the answer, what is? What's it all about? The
building blocks of the economy are production and consumption. That's
it - and there is always a balance between them; money doesn't enter
into it. Yes, there are durable goods, especially buildings and other
infrastructure, but that's only a detail and could be accounted for
with a slight modification to the definition of 'consumption'. So for
the remainder of this essay, we will assume that no imbalance between
production and consumption can persist.

What happens if we add one more person to the economy, whose
production is much higher than his consumption? Everyone else is made,
on the whole, better off, since they can either reduce their
production or increase their consumption, whichever is preferable (and
a sane economic system gives them that choice). The reverse is equally
easy to see. Of course, we don't need to add a hypothetical person; we
can isolate any one person - or even a group of people - from the
economy and determine thus whether they produce more than they
consume, and are an economic positive to strangers, or consume more
than they produce, and oppositely are and economic negative. I've just
assumed production and consumption can be compared, even though there
are many goods and services - Is that justified? Yes. There is always
in every economy a relative worth of all goods and services in demand,
which is approximated by the money system; unless the market is
significantly distorted, one can assume that X dollars of good A and X
dollars of good B are worth the same and not run into serious error.

Now, if one doesn't produce anything, one can only be a negative (I'll
from now on use 'positive' and 'negative' as short forms for the two
possibilities). How many people don't produce anything? Many, many,
perhaps a majority of all Americans! Almost all children, retired
people, unemployed people, and those with sufficient wealth abstaining
from productive work, to name the obvious. Housewives, that is women
that do not engage in productive work outside the home, may produce
something but almost surely less than their consumption; the same of
domestic servants. Adding up all these categories surely is a majority
of the population. And of these negatives, the most negative are those
that consume the most, that is essentially to say, are wealthiest. So
the 'bums' and 'welfare moms' that are widely disliked actually
contribute far less a negative than the wealthier parasites. Who are
these parasites? - A numerical majority are Fussell's 'upper middle
class' ( http://menswiki.wikidot.com/essay:class ), and the jobs
associated with this class; I especially refer to law and finance, of
which most of the positions (at least those carrying six-figure and
higher incomes) have negative worth, for we would all be better off if
society were set up so as to have fewer lawyers, paper-pushers, and
Wall Street 'geniuses' that make millions by bankrupting ordinary
people. Despite their utility or lack thereof those people they
consume much more than we do, and they get more and more over time
because they control the government and all the power centers of our
society; they are the 'money power' that controls both the Democrats
and Republicans.

Nonetheless, despite that negative assessment, the existence of
negative people is a certainty. Just as there is always a balance of
production and consumption, there is always a balance of positive and
negative persons. This is simply because people have differing
productive capacities and differing opportunities for both production
and consumption. It is not possible to
enforce equality of the two; nor is it reasonable to, for it would
imply that if you don't work, you starve and die - no retirement
allowed, and so forth. It is not possible, the great libertarian
affectation is a lie! It's a lie that people get ahead solely on their
own work, it is bullshit! People can not complain, therefore, about
having to support negatives, as it is almost sure that they have been,
and will again be, a negative. But they should complain about those
super-parasites mentioned in the last paragraph, the existence of
which benefits no one but themselves, and causes the ordinary man
(that is lucky enough to have a job) to have to produce more and
consume less than he ought to in a just world.

Now we should all know how racial and sexual politics works in the
modern world, shouldn't we? It always works to promote women and
minorities regardless of justice and disadvantage white men; in every
sort of job white men now face ludicrous difficulties compared to
equally qualified women and non-whites (and sometimes other
'protected' groups). It means that for white men, the criticism in the
last paragraph is multiplied; that the transfer of wealth (as that is
what the difference between group production and consumption is) from
employed white men in the working classes is much greater than it
would be with only those conditions, as we further support the women
and non-whites that, due to various forms of affirmative action, get
more pay, and thus consume more, than equivalent white men (producing
the same) would. Do I even need to mention the numerous 'diversity'
positions with negative economic value? - They are merely a more 'in
your face' illustration of the problem. Racial and gender divisions
are a distraction from the real problem; the feminists have always
represented the upper middle class (or perhaps we should say, the
wives thereof) and the race artists those negroes and other minorities
that want to get into it; class is the only division that matter to
white men but we've let them pull the wool over our eyes. And the
ruling classes have only increased their oppression by adding women
and non-whites to their number.

And this is why I am a socialist and you should be too. The guaranteed
income ( http://menswiki.wikidot.com/essay:basic-income ) which I
support recognises all this that I have discussed. It is made to allow
people to be negatives to the extent necessary, but not farther.
Universal single-payer health care has the same justification, except
that the basic income provides for predictable needs while health care
is primarily for unpredictable needs. A third such program, which I
have not discussed yet and don't think anyone else has, would be the
nationalisation of life insurance. While this is only a minor issue
compared to the other two, there appears to be no argument against it;
and, it has the benefit of allowing us to practically eliminate the
chance that still exists of insurance being an incentive to murder, by
disallowing
anyone to carry more insurance than needed and by keeping the amount
and the beneficiary secret (which does not affect the legitimate
purpose of such insurance).

The main reason for supporting the basic income and universal health
care is that it makes for a more just world. Indeed, it has been
understood for some time that the wealthy should be compelled to aid
the less wealthy by taxation; only the means are different from today.
Besides the numerous and over-complicated direct transfers of wealth,
public schools (why not subsidised day care? - same justification),
toll-free public roads, and in fact all public services priced below
cost or free, are indeed similar transfers of wealth. The basic income
violates no principle that our society is now based on; only FUD
prevents us from attaining it in the near future.

Economics isn't only an academic subject or something for super-
geniuses running the world behind the scenes - it IS the world. And
it's not hard to understand. And we can be free of the ruling classes'
oppression, we can be free of wage-slavery, we can be free of the
increasing precarity of the capitalist world. It can be done and it
starts here!

Andrew Usher

[Irineu Tolentino]

É uma medida objetiva de poder.

[Alexandre César Weber]

O fim do Dollar ?

The rumours of the dollar’s death are much exaggerated

By Martin Wolf

Published: October 13 2009 22:17 | Last updated: October 13 2009 22:17

Pinn illustration

It is the season of dollar panic. These panic-mongers are varied: gold bugs, fiscal hawks and many others agree that the dollar, the dominant currency since the first world war, is on its death bed. Hyperinflationary collapse is in store. Does this make sense? No. All the same, the dollar-based global monetary system is defective. It would be good to start building alternative arrangements.

We should start with what is not happening. In the recent panic, the children ran to their mother even though her mistakes did so much to cause the crisis. The dollar’s value rose. As confidence has returned, this has reversed. The dollar jumped 20 per cent between July 2008 and March of this year. Since then it has lost much of its gains. Thus, the dollar’s fall is a symptom of success, not of failure.

Can we find deeper signs that the world is abandoning the US currency? One beloved indicator is the price of gold, which has risen four-fold since the early 2000s (see chart). But its price is a dubious indicator of inflation risks: its previous peak was in January 1980, just before inflation was crushed.

Higher prices of gold reflect fear, not fact. This fear is not widely shared. The US government can borrow at 4.2 per cent over 30 years and 3.4 per cent over 10 years. During the crisis, the inflation expectations implied by the gap in yields between conventional and inflation-protected securities collapsed. These have since recovered – yet another sign of policy success. But they are still below where they were before the crisis. The immediate danger, given excess capacity, in the US and the world, is deflation, not inflation.

ECONOMISTS’ FORUM:

Comments on Martin Wolf’s column and contributions by leading economists

The dollar’s correction is not just natural; it is helpful. It will lower the risk of deflation in the US and facilitate the correction of the global “imbalances” that helped cause the crisis. I agree with a forthcoming article by Fred Bergsten of the Peterson Institute for International Economics that “huge inflows of foreign capital to the US facilitated the over-leveraging and underpricing of risk”.* Even those who are sceptical of this agree that the US needs export-led growth.

Finally, what can replace the dollar? Unless and until China removes exchange controls and develops deep and liquid financial markets – probably a generation away – the euro is the dollar’s only serious competitor. At present, 65 per cent of the world’s reserves are in dollars and 25 per cent in euros. Yes, there could be some shift. But it is likely to be slow. The eurozone also has high fiscal deficits and debts. The dollar will exist 30 years from now; the euro’s fate is less certain.

This view may be too complacent. The danger of a collapse of the dollar is small and of its replacement by another currency still smaller. But a global monetary system that rests on the currency of a single country is problematic, for both issuer and users. The risks are also growing, particularly since the emergence of “Bretton Woods II” – the practice of managing exchange rates against the dollar.

US economy

In the 1960s, Robert Triffin, a Belgian-American economist, argued that a global monetary system based on the dollar had a flaw: the increased liquidity the world sought would require current account deficits in the US. But, sooner or later, the overhang of monetary liabilities would undermine confidence in the key currency. This view – known as the “Triffin dilemma” – proved prescient: the Bretton Woods system fell in 1971.

Strictly speaking, reserves could be created if the key-currency country merely borrowed short term and lent long term. But, in practice, the demand for reserves has generated current account deficits in the issuing country. In a floating exchange-rate regime reserve accumulations should also be unnecessary. But, after the financial crises of the 1990s, emerging countries decided they needed to pursue export-led growth and insure themselves against crises. As a direct result, three quarters of the world’s currency reserves have been accumulated just in this decade.

Yet this very search for stability risks creating long-run instability. Indeed, Chinese policymakers are worried about the risk to the value of their vast dollar holdings that, on Triffin’s logic, their own policy exacerbates. US policymakers may repeat the “strong dollar” mantra. But this is an aspiration without an instrument. Relevant policy is made by the Federal Reserve, which has no mandate to preserve the dollar’s external value. The only way China’s policymakers can preserve the domestic value of external holdings is to support the dollar without limit, which compromises China’s domestic monetary stability and will prove self-defeating in the end.

At this point, the widespread concerns about US monetary stability and the dollar’s external role converge. A standard recommendation on the former is to preserve both the independence of the Federal Reserve and ensure long-run fiscal solvency. If the fear grows that either – or, worse, both – is in danger, a self-fulfilling crisis might ensue. The dollar could tumble and long-term interest rates soar. In such a crisis, it might well be feared, a less-than-independent Federal Reserve would be compelled to buy public debt. That would accelerate flight from the dollar.

The two key preconditions for long-run stability, then, are a credibly independent central bank and federal solvency, both of which seem to be within US control.

Yet this is too simple. Most analysts assume that the US fiscal position can be determined independently of decisions taken elsewhere. But if the US private sector were to deleverage over a long period (and so spend substantially less than its income), while the rest of the world wanted to accumulate dollar-denominated assets as reserves, the US government would naturally emerge as the borrower of last resort. A corollary of the Triffin dilemma is that the international role of the dollar could make it hard for the US to manage its fiscal affairs successfully, even if it wanted to do so.

I arrive, by a somewhat different route, at the same conclusion as Mr Bergsten: the global role of the dollar is not in the interests of the US. The case for moving to a different system is very strong. This is not because the dollar’s role is now endangered. It is rather because it impairs domestic and global stability. The time for alternatives is now.

* The Dollar and the Deficits, Foreign Affairs, November/December 2009

[e-mail]
More columns at www.ft.com/martinwolf

[Alexandre César Weber]

BRIC Nations: The Fundamentals
by Chuck Butler
St. Louis, Missouri

A few years ago, someone coined the term: BRICs. This was an acronym for the countries of Brazil, Russia, India, and China. Before the huge deleveraging of risk assets leading up the collapse of Lehman Brothers in the fall of 2008, the currencies of these 4 countries were very strong versus the dollar, and growing in global prominence.

But then came the huge deleveraging of risk assets beginning in July of 2008. There's an old saying that when established currencies that are widely traded and very liquid, get grounded, the emerging market currencies (like the BRICs) get sent to the woodshed. And so, we had the BRIC currencies lose major ground to the dollar during this period of time.

However, in March of this year, the non-dollar currencies began to rebound versus the dollar once more. This rebound in the established currencies like, euro, francs, yen, and Aussie dollars, has led to an even stronger rebound in the emerging market currencies, including the BRICs.

So... I thought it best to take a step back, and look at the fundamentals of each of the BRIC countries, and see if the stage if set for yet another strong run on the dollar.

Before we start though, I wanted to tell you the two reasons I originally put these countries together to form EverBank's BRIC MarketSafe CD.

In the spring of 2009, China was making noise about the need for a new reserve currency to replace the dollar. The other BRIC nations joined in and at the next G-7 meeting, all four nations stood up and wanted to be counted as countries that want a new reserve currency, for they had see enough deficit spending in the US to convince them the dollar had no other avenue to follow but down.

The "markets" sort of shrugged off the BRIC nations call for a new reserve currency to replace the dollar. But I looked at it differently. I saw nations that had HUGE Treasure chests of dollar reserves, and nations that currently have a very large portion of the globe's population. I believed then as I do now, that these countries would need to be reckoned with, and eventually their cries for a new reserve currency to replace the dollar would be heard, loud and clear.

Since we announced the creation of the BRIC MarketSafe CD, where an owner of the CD receives the positive gains in the currencies over 3 years, but does not experience any currency risk, as the CD has 100% principal protection, the BRIC nations are receiving more notice!

At the last G-20 meeting, of which the BRIC nations are a part of, it was announced that the watchdog duties for the global economies were being taken over by G-20 (from G-8). And a week later, the G-7 Finance Ministers suggested that G-20 take over the currency watchdog duties!

Now G-20 has both global economies and currencies under their watch and care, and the BRIC nations are right there to offer their suggestions...

So... Now that we've gone through the background, let's take a look at the current fundamentals of these four nations, to see if the prospect of further potential currency appreciation is warranted.

First up... Brazil!

Brazil was the first Latin American country and first in the Americas to see its economy grind out of its recession. Brazilian GDP for 2009 overall will probably be just a nick over flat, while the forecasts for 2010 GDP show that economic growth will expand by 3.8%, as firmer domestic demand leads the economy.

For instance, Brazil's recent Industrial Production output grew 1.2% in August, which was the eighth consecutive month of growth.

Brazil currently enjoys a Trade Surplus of 1.5% of GDP, with forecasts for the Surplus to also grow to 3.1% of GDP by 2011.

Overall, Brazil's Current Account Balance is a narrowing 1.1% of GDP Deficit... as the economy gets back on track; the Current Account Deficit is expected to grow to 1.5% of GDP.

These are "manageable" deficit figures, and ones that would be welcomed in many countries of the world.

Inflation as always been a problem in Brazil, but assuming no economic shocks, and a strong currency (the real), it is expected that inflation could fall to 4.1% by year-end 2009, and remain stable throughout 2010- 2011.

Brazil is one of the world's largest democracies and emerging markets, which leads one to believe that their influence on the international stage will only continue to grow. Recently, China has moved past the US as Brazil's top trading partner. It is believed that Brazil and China will sign a currency swap agreement that would remove the dollar in trade settlements. I'll talk more about this in the "China segment".

The prospects for the real are good. However, one must always remember, that even with strong economic fundamentals, any mass sell off of risk assets, would be magnified for an emerging currency like the real.

Next, we have Russia...

When we announced the BRIC MarketSafe CD, I received a lot of responses to the announcement with wishes that we had not included Russia in the CD. Well, it wouldn't be a BRIC without Russia!

I told people that in essence, the only way I would buy Russian rubles is in a MarketSafe CD, and that the only way to look at Russia was as an "oil play"...

Who among us believes that oil prices will continue to remain in the $70 a barrel range?

OK... now that we've played that game... Let's get to the data!

Russia went against the flow in September, by cutting their base interest rate, when it was believed that a good number of countries around the world were preparing to begin rate hike cycles.

Russia's economy is still mired in a deep recession, as witnessed by the 10.5% fall in GDP from a year earlier, and industrial activity contracted by 12.6% in August!

Russia's economy had seen two consecutive months of growth before this step backwards in August, and thus the rate cut in September. There are only mixed signs that the recession in Russia has bottomed out. But that means the Russian ruble is much cheaper than a year ago, and will probably remain weak as long as 1. The price of oil remains in the $70 range, and 2. The Russian economy remains mired in a deep recession.

Growth for 2010 is forecast to be 3.5%, which would mean that Russia's recession will have ended late in 2009. An end of the recession and economic growth are very dependent on the persisting problems of the bad assets on the books of Russian Banks.

So... the rebound in the ruble may take some time to come to fruition. The good thing about that is that the ruble will remain cheap for new buyers.

"I saw nations that had HUGE Treasure chests of dollar reserves, and nations that currently have a very large portion of the globe’s population. I believe that these countries would need to be reckoned with, and eventually their cries for a new reserve currency to replace the dollar would be heard, loud and clear."

Next... India...

India has maintained strong economic growth through the global financial meltdown, and will post a very impressive growth of 5.5% this year. This does represent a sharp deceleration from the 10% growth rates during the go-go years before the global financial meltdown. So, while 5.5% growth is lower than previous growth rates, it remains one of the best rates of economic growth in Asia!

Economic growth in India is forecast to grow 6.3% in 2010 as private consumption, investment and trade growth all show renewed strength.

Inflation in India, at present is not a problem coming in at 1.3% in 2009. However, as domestic growth takes hold, inflation is expected to rise to 5.1% in 2010.

The Indian Central Bank will continue to fight inflation, probably raising rates as we go along in 2010. The higher interest rates will go a long way toward additional currency strength.

India does not have a problematic current account deficit, like many emerging market countries. With rising exports at a 9.6% rate, the current account deficit will be the equivalent of 0.5% of GDP... Future growth in India will present itself as a problem as far as the Current Account Deficit is concerned. But it will remain manageable, and again, not the stuff that some countries experience.

The prospects for the rupee remain strong going forward.

And, last on the roster, but number one in the hearts of the fans....

China...

This is the proverbial 200 lb gorilla in the room! China has long been on my mind as the most undervalued currency on the planet, and as long as the Chinese government has their hands on the purse strings of the renminbi, it will remain that way.

However, there are signs that the Chinese government is looking to widen the use of the renminbi, which would eventually lead to more of a free float or at least a wider band of currency movement allowed.

The IMF recently wrote that the renminbi remains the most undervalued currency at probably a level of 40% undervalued versus the dollar. As long as the renminbi's daily movement is controlled so strictly by the Chinese government the renminbi will not be allowed to cut into that 40% figure by very much. However, with the signs of a wider use of the currency, it is thought that the renminbi could be allowed to float more in the future.

What is this "wider use" I'm talking about? Well... you see, the renminbi is not a transactional currency, it is not liquid, and is traded on what's called a "non-deliverable forward". Which simply means it cannot be converted to physical form, or deliverable form.

It is my belief that China is taking baby steps to one day, have their currency take over the title of reserve currency of the world replacing the dollar. And to do this, the Chinese must begin to obtain a wider use of their currency.

They began this process by signing currency swap agreements with most of the Asian countries, and then moved on to Argentina. As I said earlier, it is believed that China will soon sign another of these currency swap agreements with Brazil.

The currency swap agreement between two countries eliminates the dollar from any transaction between the two countries, and only uses the currencies of the two respective countries. This is the "first step" toward gaining a wider use.

The "second step" came in September when China issued renminbi denominated bonds in Hong Kong. These were the first renminbi denominated bonds issued by China.

A wider use, in my mind, is equal to a stronger renminbi versus the dollar going forward.

Now for some data!

China's GDP is expected to grow 8% in 2009, and 8.6% in 2010. China's economic recovery this year has been fueled by government stimulus. But Hey! China has a treasure chest of reserves and surpluses... So, if any country was going to spend some money to boost their economy, China would be the one, for they have the money to do so!

And... with China being a Communist country, they were able to dictate where and to whom the money was being directed to, and how it was to be spent. This has gone a long way toward seeing the results of China's stimulus.

Inflation remains a problem in China, and the sooner the Chinese realize that a strong currency can go a long way toward fighting inflation, the better!

So... For now, the renminbi remains pegged to a basket of currencies, and controlled by the Chinese Government, through the Chinese central bank. However, there are signs that this arrangement for the currency is changing, and a wider use of the renminbi is the objective... If that's the case, then the prospects for a potentially stronger renminbi versus the dollar are very good.

And that's how I see the BRIC currencies/ countries...

Regards,

Chuck Butler
for The Daily Reckoning

[Alexandre César Weber]

O Carry trade continua forte e rijo, o Dollar vai ladeira abaixo.

Quotable

“If money is a moral contract between government and its citizens, we are being
violated. The rest of the world, meanwhile, simply wants to avoid being duped. That is
why China and Russia—large holders of dollars—are angling to invent some new kind of
global currency for denominating reserve assets. It's why oil-producing Gulf States are
fretting over whether to continue pricing energy exports in depreciated dollars. It's why
central banks around the world are dumping dollars in favor of alternative currencies,
even as reduced global demand exacerbates the dollar's decline. Until the U.S. sends
convincing signals that it believes in a strong dollar—mere rhetorical assertions ring
hollow—the world has little reason to hold dollar-denominated securities.”
Judy Shelton

FX Trading – A primer on carry!

Stocks, and currencies to a degree, meandered all day yesterday in wait of Intel to
report earnings after the bell. The chip boys didn’t disappoint. Stocks jumped after
hours on the news, rallied everywhere else overnight, and the S&P futures are up 14+ as
I scribble. You likely know the rest of the story—currencies are no longer meandering
and the pack is higher against the buck.
Carry, as they call it, is alive and well and seems to be getting stronger. Carry, in a
sentence, is to borrow proceeds in a low yielding currency, and reinvest said proceeds in
higher yielding or higher capital gains opportunities—the desire for those opportunities
has been coined by the phrase risk appetite.
Black Swan Capital’s Currency Currents is strictly an informational publication and does not provide personalized or
individualized investment or trading advice. Commodity futures and forex trading involves substantial risk of loss and may not be
suitable for you. The money you allocate to futures or forex trading should be money that you can afford to lose. Please carefully
read Black Swan’s full disclaimer, which is available at http://www.blackswantrading.com/disclaimer
We find plenty of good risk appetite opportunities in the US stock market. But because
the biggest capital gains opportunities are perceived to be offshore, outside the US in
faster growing and higher interest rate countries, risk appetite investing is part and
parcel to money moving out of the US dollar.
Let’s look at an example comparing the US to South Korea on yield and growth. Below is
a two-year yield spread between the US and South Korea: