Greece should follow the example of the Philippines
Posted by Ivo Cerckel on November 5th, 2011
1.
FreeGold means that the euro has a gold component and a paper component, and puts a “firewall” between both so that gold’s valuation as a wealth-preserving asset cannot be pulled lower by the inevitable inflation of the paper component of circulating currencies. It is the (quarterly) marking to market (MTM) of the gold reserves of the European System of Central Banks (ESCB) , not to the Bretton Woods model of $42.2 like the USA central bank (originally $35), by the ESCB which provides that wall.
The talking heads are still confusing the governments established on euroland with the euro.
The talking heads are arguing that if the Greek government leaves euroland, the euro can no longer possibly be legal tender in Greece.
The value of the euro does not depend on the finances of the governments established on euroland..
The value of the euro depends on its gold reserves which are marked to market on a quarterly basis.
The Bangko Sentral ng Pilipinas (BSP), the Central Bank of the Philippines, does even a better job.. It marks the gold reserves of the Philippine peso to market on a monthly basis
The talking heads are also still arguing that European Central Bank (ECB) is the guardian of euroland,
whereas the ECB is only the guardian of the euro (itself).
2.
The 1944 Bretton Woods Agreement linked the US dollar to gold (and all other currencies to the said dollar).
On 15 August 1971, US president Richard Nixon broke the Bretton Woods Agreement.
Whereas before 15 August 1971, the US dollar was a GOLD DERIVATIVE, current International Monetary Fund (IMF) rules (article IV, section 2, (b), of the IMF Articles of Agreement) prohibit members from linking their currencies to gold..
Since that date, the IMF has no more reason of existence.
If the IMF continues to exist, this is in order to support the bankrupt dollar regime, thereby making of gold a DOLLAR DERIVATIVE.
In its turn, the fact that gold is now a dollar derivative makes a mockery of the very IMF prohibition of linking currencies to gold – prohibition from which the fact results
This is what made the creation of the euro necessary.
The euro therefore has gold reserves which are not fixed like under Bretton Woods at $42.22, originally in 1944 when Lord Keynes gathered with others in Bretton Woods for a conference, $35, but are freely floating so that the value of these will not be undermined by money printing for the (Greek) euro bailouts.
To repeat;
FreeGold means that the euro has a gold component and a paper component, and puts a “firewall” between both so that gold’s valuation as a wealth-preserving asset cannot be pulled lower by the inevitable inflation of the paper component of circulating currencies. It is the (quarterly) marking to market (MTM) of the gold reserves of the European System of Central Banks (ESCB) , not to the Bretton Woods model of $42.2 like the USA central bank (originally $35), by the ESCB which provides that wall.
3.
The value of the euro does not depend on the finances of the governments established on euroland.
The value of the euro depends on the gold reserves of the ESCB which are marked to market (-price) on a quarterly basis.
The ECB is the guardian of the euro – not of the governments established on the area where the euro is legal tender.
ECB chief Wim Duisenberg said in 2002 upon receiving the Charlemagne Prize in Aachen that
the euro is the first currency that has not only severed its link to gold, but also its link to the NATION-STATE.
http://www.ecb.eu/press/key/date/2002/html/sp020509.en…html
Upon receiving the same prize in June 2011, his successor, Jean-Claude Trichet, said:
The {Maastricht] Treaty has mandated the ECB to keep safe the money of Europe’s citizens [not the governments established on euroland]
http://www.ecb.int/press/key/date/2011/html/sp110602.en.html
4.
Let Greece leave euroland.
If after its departure Greece still prefers legal tender over free monetary competition, nothing prevents Greece from keeping the euro as legal tender.
Or even better, Greece can follow the example of the Bangko Sentral ng Pilipinas, the Central Bank of the Philippines, and mark its gold reserves to market on a monthly basis, not just on a quarterly basis like the European System of Central Banks.
END-OCTOBER 2011
Forex reserves rise to $75.8B
By: Michelle V.. Remo
Philippine Daily Inquirer
11:33 pm | Friday, November 4th, 2011
http://business.inquirer.net/28553/forex-reserves-rise-to-75-8b
SNIPS
The country’s foreign exchange reserves continued to grow in October and the Bangko Sentral ng Pilipinas said this further shielded the Philippines from the adverse effects of unfavorable economic developments abroad.
The gross international reserves (GIR) amounted to $75.8 billion as of the end of October, up 33 percent from $57.15 billion a year ago. The GIR in September stood at $75.17 billion.
According to the BSP, the rise in the country’s GIR was due mainly to its foreign exchange operations. In cases when upward pressure on the peso was significant, the central bank would intervene in the market by buying dollars to temper volatility.
+
The BSP said the increase in world prices of gold also aided the growth in the foreign exchange reserves in October. A portion of the country’s reserves are in the form of gold. Documents from the BSP showed that of the GIR in October, $7.9 billion were accounted for by the precious metal.
“The appreciable buildup in the reserves level resulted mainly from the foreign exchange operations and income from investments abroad of the BSP as well as revaluation gains in the BSP’s gold holdings,” the BSP said in a statement.
UNSNIP
That’s the example to follow by/for Greece.
Ivo Cerckel
honestmoney@maktoob.com
No related posts.