Wednesday, June 3, 2015

What's Ahead this Summer?

As we near the half way point in 2015, things are not a lot different than they were as we started the year. All the risks to the present monetary system we have documented here on the blog still exist. So far, those risks have been managed in such a way that we have avoided another major financial crisis. 

Those forecasting that we will have another crisis are still making those forecasts. Some think we will see one this year (most have a September to October time frame). Others who think we will see another crisis don't have a set time frame. Those running the present system agree there are risks, but many feel the risks can be managed. Some on the inside see potential blind spots in the current system.

At this point after nearly one and a half years of covering this topic, I really have two big picture questions I am following here on the blog. Those are:

1- Will we get another major global financial crisis as many are predicting that will be much worse than the 2008 crisis because all the numbers are bigger now?

If we do get this crisis, a followup question is how will the public react to it and how will the crisis get resolved? Will the IMF step in to solve the crisis this time?

2- If the global financial system moves towards a more global environment (the IMF and the SDR step forward as the new main global reserve currency) for whatever reason, will we see a new asset backed digital currency that would allow the average citizen and major central banks to connect with each other in a new historic way?

Another way to ask this question is will there be a way some day in the future to tie the "inside" SDR to an "outside" currency that everyone can hold and use for commerce? Will new digital technology play a role in this?

This second question will seem strange to many readers. I understand that. But my research on all this leads me to believe such a concept is possible in the future. This could be a question that we don't get an answer to for a few more years.

If the answers to either or both of the above questions are yes, we will see historic changes to the global monetary system which is what this blog covers. We could see those changes forced upon us under crisis conditions or slowly evolve over many years. 

If the answer to both questions ends up being no, it's probably time to bring this blog to an end. If no major change is coming anytime soon, the blog is not really serving a useful purpose.

While we follow these two big questions and wait to see how they are answered (which could take awhile), we will continue to follow news events that relate to the monetary system and that could impact potential change to the system.

This summer we have several news events ongoing to keep an eye on. Here is a bullet point list:

- What happens with Greece? A lot of drama so far. Greece says they cannot pay the IMF? Will there really be a default or will this get rolled forward again as has been the case in the past?

- BRICS nations hold their summer summit in July in Russia. We can expect some news and updates from this meeting on the BRICS bank (and probably the AIIB as well)

- A lot of intrigue is happening in the gold market with everyone watching China to see what their end game is for all their gold buying. We might get some news on that this summer leading into the IMF decision this fall on the SDR currency basket.

-The Ukraine has dropped off the radar map, but its debt problems are not yet resolved so we should probably check in on that sometime this summer

-We will continue to follow experts like Jim Rickards and Nomi Prins who regularly provide new articles and interviews for the public. People with experience and connections inside the system who will talk about key issues are rare, so we value those who do.

-We will continue to monitor alternative media sites to see what the thinking is on these sites. Here is a recent interview that is a good example of how these sites view things. Many of these sites believe we will see a major crisis this fall, so we will see if that happens or not. We will also look to see how Bo Polny's forecast for June 21st turned out.

By now we should all understand that the conditions for a crisis are basically always present with shadow banking, derivatives, unsustainable sovereign debt, etc. Both the IMF and the BIS have issued multiple warnings about all these risks which we have documented here on the blog over the past year. You can find those warnings in the blog archive links on the right hand panel of the blog. Here is an example of partial list we compiled last December. There have been several more added since then. On the other hand, it may be that another major crisis will be avoided if these systemic risks are well managed.

This fall we have the IMF decision on whether to add the Yuan into the SDR currency basket so we can also expect continuing news articles on that this summer leading into that decision. The IMF 2010 reforms are still stalled and frustration with that continues. We can expect that to impact how various nations move forward.

I will also re-post a few of the most popular blog articles this summer for new readers. This blog continues to get new readers every week. If you are one, the archive of articles on the right side of the blog might be useful to you.

If you as a reader here see a topic relevant to monetary system change you want covered, just let me know. If you are a new reader, you might enjoy this page which explains more about this blog. If you are a dog lover, you might enjoy this page. I appreciate all feedback from readers and have gotten lots of great article tips from readers here from around the world including the BRICS nations. That is much appreciated!

I hope everyone has a pleasant and enjoyable summer!

I guess I should say pleasant winter for those in the Southern Hemisphere :)

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