In a floating exchange-rate regime, reserve accumulations are unnecessary, said Martin Wolf this week in the Financial Times. (1)

“A research done by the Dubai International Financial Centre (DIFC) Authority’s Economics unit finds that the present value of the oil and gas reserves of the six countries of the Gulf Co-operation Council (GCC) is estimated at $18.3trn. This amount is larger than the 2008 GDP of the United States,” added Dr Omar Bin Sulaiman, Governor of the DIFC and Vice-Chairman of the United Arab Emirates (UAE) Central Bank. (2)

The GCC Central Bank duties [...] include managing the foreign currency reserves of the unified currency, [...]. (3)

What happens to the gold, oil and gas reserves of the GCC single currency?

In a floating exchange-rate regime, they are unnecessary says Wolf.

The UAE says it will not participate in the early stages of GCC Monetary Union.

Why is then precisely the Vice-Chairman of the UAE Central Bank who’s disclosing the present value of the oil and gas reserves of the SIX, two of whom are still saying they will not participate in GMU, countries of the GCC?

As oil is the only commodity that is large enough for gold to hide in, gold is hiding in there. Oil producers do exchange that worthless green paper, called the petrodollar, for the yellow substance.

One of the meanings of “substance” for Aristotle is “to ti èn einai”, the “what-it-was-to-be-that-thing” of something. (4)

It is as unnatural in Greek as in English to use a phrase in this way in the grammatical case of a noun. The key to the meaning of the expression seems to lie in the puzzling past tense embedded in it. It suggests the idea of what something was all along going to, destined to, become.  (5)

Is oil destined to become a worthless green paper?

Is that also the fate which will be incumbent upon the GCC single currency?

Or does the GCC deserve better?

Does that explain why less than 24 hours after calling for a delay in the launching of the GCC single currency, Kuwait this week restored support for the currency in January 2010? (6) (7)

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

NOTES

(1)
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
http://www.ft.com/cms/s/0/9165b8b0-b82a-11de-8ca9-00144feab49a.html

(2)
GCC energy reserves valued at $18.3trn   
By CL Jose on Wednesday, October 14, 2009
http://www.business24-7.ae//Articles/2009/10/Pages/13102009/10142009_fe8ad7cdb6c14895860875681c0f3b48.aspx

(3)
Details of GCC Monetary Union Agreement
13/10/2009
By Salman Dossari
http://aawsat.com/english/news.asp?section=6&id=18455

(4)
Aristotle, “Metaphysics”, Zeta 3 – 6

(5)
Hugh Lawson-Tancred. “Introduction” in: Aristotle, “Metaphysics”, Penguin Books, 1998, updated bibliography 2004, xi, p. Xxx

(6)
Kuwait calls for delay in Gulf currency launch
(AFP) 12 October 2009
http://www.google.com/hostednews/afp/article/ALeqM5i5ds-ZPxetH-7dcO5HErlKaAnZnw
http://www.zawya.com/Story.cfm/sidANA20091011T141127ZGKS93/Kuwait%20Calls%20For%20Delay%20In%20Gulf%20Currency%20Launch
http://business.maktoob.com/20090000382350/Kuwait_calls_for_monetary_union_delay/Article.htm

(7)
Kuwait restores support for Gulf currency in January
(AFP) – 1 day ago13.09.2009
http://www.google.com/hostednews/afp/article/ALeqM5iTDLbuQm_4aPE3XRNxr3R2buVNbA

Fog in Venice
October 8, 2009 11:27am
by Ralph Atkins
http://blogs.ft.com/money-supply/2009/10/08/fog-in-venice/
Thick fog has this morning encircled Venice, where the European Central Bank is holding its interest rate setting meeting. No doubt it will add to the ECB’s feeling of not really knowing what is going on out there in the real economy. My own impression is that Venice is as busy as ever. The gondoliers certainly seem to be doing a good trade, but why are so many people wearing sunglasses? True, inflation pressures are firmly under control: I paid just €2 for a Cappuccino, which appears positively deflationary compared with Frankfurt prices. But heavy rain is threatened for the weekend, so maybe the ECB will have become more worried about excess liquidity… THE END

This blogger replies:

“But heavy rain is threatened for the weekend, so maybe the ECB will have become more worried about excess liquidity…”, says Ralph Atkins.

Indeed, this from the Introductory Statement:
Once the macroeconomic environment improves, the Governing Council will make sure that the measures taken are unwound in a timely fashion and that the liquidity provided is absorbed in order to counter effectively any threat to price stability over the medium to longer term.
http://www.ecb.int/press/pressconf/2009/html/is091008.en.html

Ron Paul’s “End the Fed” campaign is being promoted by the same Financial Times.

New monetary target
By Tom Braithwaite
Published: October 7 2009 20:47 | Last updated: October 7 2009 20:47
http://www.ft.com/cms/s/0/28db4010-b377-11de-ae8d-00144feab49a.html

In the question and answer session, the Governor said that at the G20, everybody was united.

So the ECB is united with the Fed.

We end the Fed.
The Fed is united with the ECB.
THEREFORE
We end the ECB also, quod erat demonstrandum.

Money is too important to be entrusted to bureaucrats.

Repeal legal-tender laws!

Let the market decide, but even the Adam Smith Institute in foggy London town doesn’t agree.
http://www.adamsmith.org/blog/tax-and-economy/the-fsa-and-bank-reserves-200910074238/

Robert Fisk: A financial revolution with profound political implications
Such large financial movements will have major political effects in the Middle East
Wednesday, 7 October 2009
http://www.independent.co.uk/opinion/commentators/fisk/robert-fisk-a-financial-revolution-with-profound-political-implications-1798712.html

Exclusive report by Robert Fisk
The demise of the dollar
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading
By Robert Fisk Tuesday, 6 October 2009
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

At the very end of the question and answer session, the Governor said that since the setting up of the euro, he nor his predecessor have campaigned for the international role of the euro.

Gold will assume that role.

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

Is Dr Eamonn Butler the director of the Adam Smith Institute or of the Socialist Internationale?

The FSA and bank reserves     
Written by Dr Eamonn Butler     
Wednesday, 07 October 2009 06:04 
http://www.adamsmith.org/blog/tax-and-economy/the-fsa-and-bank-reserves-200910074238/?dsq=19288147#comment-19288147
SNIP
The Financial Service Authority’s new rules on bank reserves is bad news for business and mortgage borrowers
+
Now it says that the banks should keep more cash in their reserves, to make them stronger so they don’t collapse again. What it means, of course, is that they should keep more government bonds in their vaults. Which is nice for the government, who will at least get someone to buy its rubbish IOUs. But it’s bad for the banks, who will have to spend an extra £6bn doing so.
UNSNIP

Ivo replies;

“Now [the FSA] says that the banksters should keep more cash in their reserves, to make them stronger so they don’t collapse again. [...]   But it’s bad for the banksters, who will have to spend an extra £6bn doing so.”

Is this the Adam Smith Institute or the Socialist Internationale?

A bank earns its living by taking money in from depositors, and lending the money to its customers or investing it and the bank’s gross profit is the difference between the interest it earns and the interest it pays, and because a bank generally can earn a greater return on loans than on investment, it will lend out as much of its money as it dares, says Harry Browne.
A bankster fails when it doesn’t have enough cash available to pay the depositors who want to withdraw their money – even if the bankster’s assets are worth enough money to pay everyone eventually.

MATCHING MATURITIES

Matching maturities, LIQUIDITY, the availability of enough cash (or assets that can be converted to cash immediately) to honour all withdrawal requests is the key for a bankster, says Browne. To be liquid, a bankster doesn’t need to have all its money in the vault.
But it does need to arrange its loans and investments to allow for the promises that the bankster has made to its depositors.
The virtue of “matching maturities” – matching one year loans to one year deposits and so on – is a lesson taught in basic college finance classes.
And it is simple common sense. But unfortunately, [...] banksters don’t do business that way. But a bankster with mismatched maturities is however an illiquid bankster.
(Harry Browne, “The Economic Time Bomb”, New York, St Martin’s Press, 1989)

Yes, banksters will have to spend an extra £6bn for conducting business in a somewhat less dishonest way.

Of course, if the money is spent to buy guv’mint paper, it doesn’t make any difference.

Who’s the greatest gangster?

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

The euro is the first currency that has not only SEVERED ITS LINK to gold, but also its link to the nation-state, said the late European Central Bank president Wim Duisenberg on 9 May 2002. (1)

Lorenzo Bini Smaghi, a board member of the same ECB, said yesterday, 06 October 2009, that China for one needs to bite bullet. “I think the best way is that China starts adopting its own monetary policy and DETACH itself from the Fed’s policy.”  (2)

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

NOTES

(1)
International Charlemagne Prize of Aachen for 2002
Acceptance speech by Dr. Willem F. Duisenberg, President of the European Central Bank, Aachen, 9 May 2002
http://www.ecb.eu/press/key/date/2002/html/sp020509.en.html

(2)
China calls time on dollar hegemony
You can date the end of dollar hegemony from China’s decision last month to sell its first batch of sovereign bonds in Chinese yuan to foreigners.
By Ambrose Evans-Pritchard
Published: 7:33PM BST 06 Oct 2009
http://www.telegraph.co.uk/finance/china-business/6266790/China-calls-time-on-dollar-hegemony.html

Exclusive report by Robert Fisk

The demise of the dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk
Tuesday, 6 October 2009
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html
SNIP
The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold
UNSNIP

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

And the joke continues …

Whereas the Gulf Co-operation Council wants a strong and high value single currency,
the Group of Seven industrialised guv’mints wants China to continue to be committed to move to a more flexible exchange rate

GCC nations to hold poll for naming new currency
October 04, 2009
http://www.business24-7.ae/Articles/2009/10/Pages/03102009/10042009_1aea296348564336bda538cae2180ec4.aspx
SNIP
“As a result, there is a general tendency now to name the currency either dinar or riyal, which are two common names of currency in the region… but according to observers, the dinar is a stronger candidate because the founders want a name of a currency which is psychologically associated with the minds of the citizens as a strong and high value currency,” a Saudi Arabian newspaper reported yesterday.

G7 welcomes China’s backing for a flexible currency
By Krishna Guha in Istanbul
Published: October 3 2009 18:15 | Last updated: October 3 2009 18:15
http://www.ft.com/cms/s/0/82dcb54c-b031-11de-b78c-00144feabdc0.html
 
G7 warns of excess volatility on currency markets
Arab News newspaper, Sunday 4 October 2009 (15 Shawwal 1430) 
Agencies
http://www.arabnews.com/?page=6§ion=0&article=127042&d=4&m=10&y=2009 
SNIPS
ISTANBUL: G7 finance chiefs on Saturday warned “excess volatility” on currency markets was hurting economic stability and said a more flexible exchange rate in China would promote world economic growth.
+
European finance ministers put pressure on the United States this week ahead of the talks to defend the dollar, which has weakened considerably as a tentative global economic recovery has taken shape. The G7 finance chiefs also stressed the importance of China’s policy.
“We welcome China’s continued commitment to move to a more flexible exchange rate, which should lead to continued appreciation of the renminbi in effective terms and help promote more balanced growth in China and in the world economy.”
UNSNIP

In his latest move, Dominique Strauss-Kahn, the head of the International Monetary Fund, on Friday in Istanbul, at  the annual meetings of the IMF and the World Bank, reiterated his criticism of China’s “undervalued” currency and he wanted currencies to “rebalance”
(IMF chief renews call for currency reform
By Chris Giles and Krishna Guha in Istanbul
Published: October 2 2009 13:21 | Last updated: October 2 2009 13:21
http://www.ft.com/cms/s/0/ae08da42-af47-11de-ba1c-00144feabdc0.html

Now on Saturday.
G7 finance chiefs warned “EXCESS VOLATILITY” on currency markets was hurting economic stability and said a MORE FLEXIBLE exchange rate in China would promote world economic growth,
says the Arab News newspaper article I quoted above  this Sunday morning

Does enhanced flexibility not lead to more volatility?

What is the point I am missing?

There is no point?

The issuer of a currency needs reserves in order to determine the value of that currency. A distinction should be made between the gold (hiding in oil – since oil is the only commodity that is large enough for gold to hide in, gold is hiding in there) reserves and the forex (foreign exchange) reserves of the issuer of the currency. Forex reserves consisting of worthless paper money can only possibly be used for intervention on forex markets. Such reserves are worthless, no, useless, to determine the value of a currency. Only gold (hiding in oil) reserves can determine the value of a currency.

A Lex-column “The myth of rebalancing” in this week-end’s Financial Times
http://www.ft.com/cms/s/3/8fbb4db4-af2d-11de-ba1c-00144feabdc0.html
says however that we have only free-floating currencies and manipulated currencies.
In either case, the reserves of the central bank are irrelevant to determine the value of the currency.

Against what should the currencies rebalance?

Against each other?

None of the banks on this planet matches maturities, none applies the lesson its managers should have been taught in college finance classes, the lesson of matching one year loans to one year deposits and so on.

All banks on this planet are thus illiquid banks and they should be liquidated because they are fraudulent.

And the joke continues …

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

This guy seems to have been to school with thalidomide babies born (in the USA) before 1957.

FinallyFred’s Journal – MedHelp
Journal Entry 12/11/08
http://www.medhelp.org/user_journals/show/126275
SNIP
In the 1940s and 50s, “thalidomide was a drug used regulaarly  in the treatment of leprosy. Thalidomide was also prescribed to expectant mothers to treat morning sickness, anxiety, and insomnia. A DECADE later, the Food and Drug Administration took the drug off the market after more than 10,000 babies exposed to thalidomide in the womb were born with severe adverse thalidomide birth defects including serious malformations and limb deformities.   I am old enough to have had some of those people in my school and it was SAD SAD SAD.  That stuff was horrible, yet after seeing babies born without arms, legs, etc. -   it took the FDA over a decade to pull it from the market!   UNSNIP

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

… jusqu’au jour où le premier monstre thalidomide réapparaitra.

Ici au tiers monde, ils réapparaissent déjà

PARIS (©AFP / 02 octobre 2009 14h59)
Le thalidomide, associé dans les années 50 à de graves malformations congénitales, sera de nouveau commercialisé en France à partir du 19 octobre sous le nom Thalidomide Celgene, pour le traitement d’une forme rare de cancer, le myélome multiple, a annoncé l’agence du médicament (Afssap).
(Retour très encadré du thalidomide sur le marché du médicament 
http://www.romandie.com/infos/news2/091002125911.4l6sw89t.asp

“Imagine there’s no countries. It isn’t hard to do. Nothing to kill or die for …”
(John Lennon)
+
Every mother knows that her child should not play with a toy the child does not understand. The mechanism of the biological action of thalidomide is still being debated.
Human nature is constituted as such that some individuals who have inside knowledge about the effects of thalidomide will ‘always’ deliberately and unnoticeably cause the serious harm thalidomide can ‘so easily’ cause. They do that precisely because the damage is so serious to the mother and to the child and because they can do that so easily and without being noticed. It may be that ‘in clinical trials’, thalidomide is shown to be effective against many things. But ‘in real life’, it is given to unsuspecting girls. This can be reconciled with John Lennon if one remembers that thalidomide was created by the Nazis.
Ivo Cerckel, 30 June  2009
http://bphouse.com/honest_money/human-testing/

Wir haben es nicht gewußt …

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

Banque Cantonale de Genève mismanagement in 1990s: ready for trial but lawyers angry at leak
http://genevalunch.com/2009/10/01/banque
SNIPS
Update 14:00  Geneva, Switzerland (GenevLunch) – Geneva’s public prosecutor, Daniel Zapelli, has now prepared his case against the key people responsible for the collapse of Geneva’s cantonal bank (BCGE), reported the Tribune de Genève 1 October. The article gives a detailed account of the bank’s scandal 10 years ago, based on Zapelli’s 600-page indictment, which the Tribune obtained.
+
Three top bank officials and two outside auditors from Ernst & Young systematically massaged the accounts from 1996 to 1998, and lied to the board of directors, all the while cashing in big bonuses, according to today’s report in the Tribune.
UNSNIP

Yes, it’s easy for Geneva’s public prosecutor, Daniel Zapelli, to indict three top bank officials and two outside auditors from Ernst & Young.

Et ils touchaient des bonus…,
And they cashed in on bonuses …,
subtitles the La Tribune de Genève article. quoted by Geneva Lunch
http://www.tdg.ch/geneve/actu/bcge-600-pages-accablent-dirigeants-2009-09-30

Sounds familiar these days!

How come banking is the only industry where executives can overpay themselves and their shareholders?

Can you spell “irredeemable, at least unbacked, paper money” and “fractional-reserve banking”?

From The Times
September 30, 2009
Gordon Brown spells out hardline plan to disqualify irresponsible bankers
http://www.timesonline.co.uk/tol/news/uk/article6854561.ece

What if the Swiss Commission fédérale des banques (CFB) started by responsibilising central banksters ?

irredeemable digital liquidity & fractional-reserve banking are fraudulent – Let the system collapse now!
ECB attacks oil producers
Posted by Ivo Cerckel on December 6th, 2008
http://bphouse.com/honest_money/worthless-digital-liquidity-and-fractional-reserve-banking-are-fraudulent-%e2%80%93-let-the-system-collapse-now/

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

Watch this Canadian video.

Here’s why our Masters did it.

The plural of a B-word comes to mind.

De l’efficacité des prothèses
Date de diffusion : 21 février 1964
http://archives.radio-canada.ca/sante/sante_publique/dossiers/65-865/

L’Institut de réadaptation de Montréal devient le lieu de convergence des victimes de la thalidomide.

Son mandat est confié au docteur Gustave Gingras, qui met en place un programme canadien de réadaptation pour les handicapés. Quarante trois cas de malformations et d’amputations congénitales y sont traités.

En 1963, l’Institut introduit au Canada une prothèse à air comprimé. L’année suivante, il est le premier en Amérique du Nord à utiliser et à perfectionner la prothèse myoélectrique.

Des prothèses artificielles sont créées afin de faciliter la mobilité des victimes et de normaliser leur apparence physique.

Mais très vite, l’équipe du docteur Gingras prend conscience que les enfants nés sans membres ne possèdent pas de représentation mentale de leurs membres, contrairement aux amputés traumatiques.

Leur cerveau ne peut donc pas se servir du membre artificiel que représente la prothèse. Le suivi psychologique est donc capital.

Don’t forget; Thalidomide ‘was created by the Nazis’

Grünenthal apparently purchased the trade name of the drug – Contergan – and therefore probably the substance itself, from a French firm, Rhône-Poulenc, which was under Nazi control during the war years.
(From The Sunday Times
February 8, 2009
Thalidomide ‘was created by the Nazis’
http://www.timesonline.co.uk/tol/life_and_style/health/article5683577.ece

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/