G20 Provocateurs, Veitch Arrested, Austerity for All - Sunday Update

maf1989a | July 02, 2010
http://www.trueworldhistory.info/ I give the credit to The Corbett Report. Patriot of the Republic, maf1989a - http://www.corbettreport.com

Sunday Update is a public service of The Corbett Report podcast.

Unedited footage of police car burning
http://ur1.ca/0eaaf

Agents Provocateur at London G20 (photo op)
http://ur1.ca/2z5m

Denver police dressed up as protestors to start riot at Denver DNC
http://ur1.ca/0eaav

Quebec police dressed up as protestors to start riot at SPP protest
http://ur1.ca/0eaaz

Dan Dicks questions Toronto police about provocateuring at Toronto G20
http://ur1.ca/0eaaz

Veitch bullhorning Toronto
http://ur1.ca/0eab5

Toronto police illegally search and seize private property near G20 site
http://ur1.ca/0eabf

Veitch arrested
http://ur1.ca/0eabl

We Are Change reporters banned from Canada
http://ur1.ca/0eabo

Bob Chapman on the G20
http://ur1.ca/0eabt

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Jim Rickards - G-20 & Revaluation of Gold via Eric King's Blog on KingWorldNews.com

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/6/21_Jim_Rickards_-_G20_%26_Revaluation_of_Gold.html
What G20 will not discuss this weekend (but probably should)
By James G. Rickards

There's a growing sense that the current global economic "Plan A", i.e. substitute public debt for private debt and use fiscal stimulus to keep economies afloat until private demand kicks in, has failed. Not surprising to many of us; it was destined to fail, but now the reality of that is becoming undeniable so leaders are scrambling for Plan B. For the U.S., Plan B is to double-down on Plan A. Others are not so sure. One problem is timing. There are several Plan B's, but they all take 5-7 years to implement, e.g. yuan as reserve asset, SDR's as a new liquidity source, etc. The two-tier Euro plan is just another Plan B although it might possibly be implemented in 2-3 years rather than 5-7.

None of these plans is totally ridiculous, but they all suffer from the same weakness which is that they depend on continued faith in paper money in a world where that faith is rapidly eroding. So the meta-political question becomes: can one or more of these plans be implemented faster than the paper currencies collapse? My spot estimate is "no". The avalanche has already started; there is no way to push the snow back uphill; it's just a matter of time before the paper money village below gets buried. Plan A and the the system it represents will collapse before there's time for Plan B.

This brings us to Plan C of which there are several: (x) chaos, autarky, neomercantilism and heavy-duty protectionism; i.e. playing to win a negative sum game, (y) draconian policy responses including seizure, delegitimization and/or taxation of private gold and forced use of paper money, or (z) gold and commodity backed currencies and a gradual return to stability (albeit with a depression between here and there). Options (x) and (y) more or less speak for themselves. Option (z) is the most interesting because it involves a host of policy choices and political considerations such as: what is the non-deflationary price at which the gold standard should be reestablished (probably $5,000/oz or higher); and who gets to participate and at what levels, (and this is where the true weakness of players like China, India and Brazil comes into sharp relief). Russia is the most interesting case because although it has a relatively small GDP (less than 3% of world GDP) it is a natural resource powerhouse which could play with the big boys in a world of commodity backed currencies. Italy is another interesting case because it is a true gold power (over 2,400 tonnes) although it is frequently lumped in with the Club Med miscreants.

Given the dynamics and cross currents, a likely scenario consists of elements of all of the above. The U.S. and China will continue to lead the world to a new regime of dollars and yuan as reserve currencies and SDR's plus IMF leverage as the key instrument for increasing world liquidity and settling international payments imbalances. As the system breaks down anyway (because of private demand for gold due to lack of faith in official solutions) one political response will be protectionism (to appease local populations) and efforts at confiscation (to put the gold genie back in the bottle). At that point, and amid the chaos, one or more countries will "go for gold" on their own to preserve wealth and the purchasing power of export income; the most likely axis here is Germany-Russia with Austria, the Netherlands, France and possibly Italy joining in. The German-Russian axis is the most natural in the world because each has what the other needs; technology and manufacturing in the case of Germany and energy and other natural resources in the case of Russia. At that point, the U.S. may have to give up its alternative paper plans and join the gold rush leaving China heavily exposed to collapse because of its shortage of gold relative to GDP. It seems likely that China sees the same scenario which explains its own rush to gold, albeit mostly from captive domestic production in the short run.

The end result is a chaotic, ad hoc, but nevertheless eventual return to a global gold standard. It would be far better for G20 to set up the processes, study groups and other mechanisms to make this an organized and efficient transition. That is the one thing I do not expect to happen this weekend.

Follow Jim Rickards on Twitter at twitter.com/JamesGRickards

KingWorldNews.com

To hear the recent in-depth interview with Jim Rickards on King World News CLICK HERE.

Chossudovsky: "Major currencies can simply collapse"

RTAmerica — June 18, 2010 — Obama is urging China to review its currency policy despite Chinese officials made it clear that they are not going to tolerate any interference from abroad to this issue. Is this going to become a major topic of the G-20 meeting in Canada and what's the mood their on the eve of the summit? Michel Chossudovsky says that the financial crisis is not over as President Barack Obama has hinted at.

In Advance Of G-20 Meeting, China Announces Dollar Peg To End - ZeroHedge.com

http://www.zerohedge.com/article/advance-g-20-meeting-china-announces-dollar-peg-end

In a statement posted on the PBOC's website late last night, the Chinese central bank has announced it will seek a flexible yuan, ending a two-year peg to the dollar. The news comes a week before the G-20 meeting at which the CNY exchange rate was set to be a key issue of debate. On the other hand, as the PBoC noted, With the BOP account moving closer to equilibrium, the basis for large-scale appreciation of the RMB exchange rate does not exist." As such, a large initial move is unlikely to occur, and the bulk of the volatility will likely strike at traded CNY forwards.

Full statement:
Click Here to go to ZeroHedge for the full post.

Eric King of King World News interviews Jim Rickards

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/6/14_Jim_Rickards.html

In this interview Jim Rickards of Omnis Inc. discusses his recent meetings at the US Treasury and the FDIC, the fact that we are headed towards a one world currency and bank, that the G-20 and IMF do not want it to be backed by gold, that he thinks any green shoots will be stomped on immediately and much more.

JIM RICKARDS DISCOVERS IMF DOCUMENT UPDATE June 15, 2010 Eric King from King World News Blog
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/6/15_Jim_Rickards_-_Discovers_IMF_Document.html


The IMF distributed a document late on a Friday when its representatives thought no one would catch it. Leave it to Jim Rickards of Omnis Inc. to track it down. The IMF document discusses the gold standard and gold’s role as a monetary unit. Jim discussed the importance of this in our interview released yesterday and below is a link of the IMF document he located.
June 15, 2010

From the opening of the IMF Document:

“Under the Gold Standard, the major national currencies were freely convertible to gold at a fixed exchange rate, with adjustment largely undertaken through flexible prices, wages and income. This system survived up to the outbreak of the First World War, and while it was subsequently re-established in a modified form following a painful period of post-war disinflation, the economic and political strains of the Great Depression led to the system’s ultimate collapse in the 1930s.”

They left out the fact that the Federal Reserve was created one year prior to the outbreak of World War I and it helped to fuel the credit boom which caused so many dislocations and human suffering.

Putting that aside for a moment because that is a discussion for another day, the very fact that an IMF document was discussing a history of gold in such detail as this one does surprised me. There is much more in the IMF piece, but let’s move on to Jim Rickards thoughts from his interview:

“But the alternative is to find another engine, another liquidity pump if you will, and that’s clearly what the G-20 leadership would like to do, and their sort of chosen candidate are the SDR’s, and their chosen vehicle is the IMF. So basically the IMF putting out SDR’s, will over time displace the Fed printing dollars as the engine of world trade, world liquidity and world growth.”

“So, that can’t happen overnight, that is a momentous shift. It’s going to require a lot of consensus building among the G-20 members. So what they do is they put these papers out, get the dialogue going and get it on the agenda, talk about it, get people kind of used to it. The average citizen has kind of no idea, it’s not that their dumb it’s just that they’re not necessarily informed or trained in this fairly technical area, and so it’s the kind of thing the elites can pull off without a lot of accountability and they are definitely headed in that direction.”

Jim’s interview covers tremendous ground. It is linked above.

Eric King

KingWorldNews.com

To read the IMF document CLICK HERE.