When the word is spoken, the United States of America comes to mind. Yet America titles an entire hemisphere, divided into both north and south, which is promptly forgotten by the legacy media. Not only are the lesser-debt-riddled western countries richer, they are many times more exciting. Then outgoing Chinese president Hu Jintao originally called “the present U.S. dollar-dominated currency system a product of the past,”and the “dictatorship” of the dollar swipe came from Venezuela’s Hugo Chavez.
Despite varying cultures and geographic locations, nations of all stripes are encouraging one another to move away from trade in dollars. Southern American nations in particular, just like families globally, have sought independence from the silent tax of the ubiquitous dollar, a tax which is currently set to increase alongside the rate of increasing supply.
Even England announced late last week that it would begin direct currency exchange with China. With nations and trades, individual decision by decision, increasingly using alternatives to dollars, trillions in dollars will concentrate into unsightly bubbles. This means dollar prices for certain assets will rise disproportionally to expectations. There is some basis to the idea that cooperation exists in combating the monopolistic natures of the dollar, euro and other one-world currency projects, as reported by El Universal:
Venezuela is believed to have more oil than any other nation at this point, and earned first-mover advantage, able to easily repatriate hundreds of tons of gold from legacy banks. China, Russia and Brazil have all spoken out against currency wars, and each acquired significant gold reserves in 2012. Is it possible loans to Venezuela are more trustworthy when the gold collateral is in Venezuela versus stored in banks linked to the fractional gold system?
Apparently not sharing that opinion, Moody’s analyst, Patrick Esteruelas, said moving the gold makes the “reserve cushion all the less transparent.” However, we doubt Moody’s has been able to fully audit the title and any encumbrances to the gold held at the central and bullion banks, and are simply expressing their crisis-bolstered tendency for group-think. Alternate rating agency Standard & Poor’s made the comment that “it [was] not exactly clear why they are repatriating reserves at a time of high gold prices,” as if Chavez were expected to sympathize with tight systemic supply.
In line with the concern over currency wars—where currency supply is increased, devaluing the purchasing power of each currency unit—both Chile and Columbia have expressed their intentions to join in printing. Columbia even committed to printing $30 million worth of pesos a month for three months.
There are many other stories of worth in the American hemisphere, and just down the coast we found a story of the central banker who just may have proven to be far smarter than his peers. While Ecuador’s Pedro Delgado resigned six days before Christmas, publicly admitting he faked his diploma in economics, he did preside over the bank when the Ecuadorian repatriation of gold was first announced. This is quite a bit better than publicly printing, as other South American nations have repeated with little thought.
Yet, this is exactly what happened, without graduate degree-bearing academics simply making up fancy acronyms when using exactly the same “policy tools.” The Globe and Mail explains:
Is this not exactly what the Bank of Japan and the Federal Reserve do, loan what is not theirs?
Perhaps Delgado would have been the one to break the news that Ecuador would return to its local currency (sucre) with its gold physically back at home, abandoning dollarization, or the use of the Federal Reserve’s dollar as a national currency.
On Halloween 2012, Carlos Carrasco, the director of Ecuador’s tax agency, SRI, announced the gold repatriation of about $1.7 billion, one-third of the 26.3 metric tons (mt) held by the nation.
In what seems to be the crowning achievement for Delgado, Otto Reich, a former U.S. assistant secretary of state for the western hemisphere, said Delgado held bilateral meetings with Russia and Iran, pushing a method for international payments though the SUCRE network (Unique System of Regional Compensation), a competitor to SWIFT—both are electronic financial messaging systems.
While we gave Delgado high marks, others have given the central banker mixed reviews.
CNBC gave him a “D” grade in its World's Lowest-Rated Central Bankers. While the legacy media crust is typically a prime contrarian indicator, we became confused when Fitch, another rating agency worth its weight in burnt hair, upgraded Ecuador. The markets also seemed to have liked Delgado, as Ecuador’s 9.375% Treasury note outstanding, due in 2015, has strengthened to yield 8.68%.
We will be sure to report further details on Ecuador’s gold repatriation.
On the other side of the world, the Airbus A300 mystery jet filled with 1.5mt of gold turned out to be satisfying “financial commitments to Iran,” and was released for onward passage after Ghana’s president arrived in Turkey to ensure safe passage after documentation did not match.
With yet another example of gold and silver money, being viewed and used as money in the modern world, we reiterate that despite varying culture and geographic location, readers should take away the idea that nations of all stripes are encouraging one another to move away from trade in dollars.
Families globally have sought independence from the silent tax of currencies with variable supply, whereby tax is silently taken without consent as supply increases and increases.
Taxation, increased without representative recourse, sounds similar to slavery, and very much like outright theft. Gold and silver offer refuge to a family seeking to save without the loss of wealth resulting from the silent taxation of inflation. In a system of real money, gold and silver, the quantity of supply has never been rigged to pilfer from the working and saving poor. With the freedom to choose how to transact and save rings true American liberty.