Anyone ever read the news on this site.

[bacpacker]

I had never heard of this site before today. After reading this today, I'm thinking it might be worth reading for a while to see how accurate they are. Here is a brief exert from the article.

After Creating Dollar Exclusion Zones In Asia And South America, China Set To Corner Africa Next Submitted by Tyler Durden

"By now it really, really should be obvious. While the insolvent "developed world" is furiously fighting over who gets to pay the bill for 30 years of unsustainable debt accumulation and how to pretend that the modern 'crony capitalist for some and communist for others' system isn't one flap of a butterfly's wings away from full on collapse mode, China is slowly taking over the world's real assets. As a reminder: here is a smattering of our headlines on the topic from the last year: ""World's Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade", "China, Russia Drop Dollar In Bilateral Trade", "China And Iran To Bypass Dollar, Plan Oil Barter System", "India and Japan sign new $15bn currency swap agreement", "Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says", "India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees", 'The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap", and finally, "Chile Is Latest Country To Launch Renminbi Swaps And Settlement", we now get the inevitable: "Central bank pledges financial push in Africa." To summarize: first Asia, next Latin America, and now Africa.

Yep: the Yuan may not be the reserve currency by default, but at this rate China will have bilateral, read USD-bypassing relations, with all countries in Asia, South America and shortly Africa (where none other than Goldman Sachs has been pushing harder than anyone). Once the entire world is trading in CNY, it will be merely a matter of flipping the switch and all those fancy three-letter economic theories that explain why the uber-welfare state works just becayse the US can print an infinity+1 in debt, will all suddenly find themselves completely and totally bidless.

From China Daily:

China is to promote the yuan's use in settling trade and investment with Africa, and encourage the more active development of Chinese financial institutions across the continent, a senior central bank official said on Friday.



Li Dongrong, assistant governor of the People's Bank of China, said Africa has the capability of becoming a new hub of international capital flow, and the yuan's use there should be further improved in accordance with rising demand for the currency there.



"We will continue to encourage domestic financial institutions to increase their presence and business across the continent," Li told delegates at the Forum on China-Africa Financial Cooperation in Beijing, adding that the cooperation potential between the two sides is huge, as Africa's economy continues to take off.



According to Li, yuan-denominated settlement between China and some African countries has already started, with 4.3 billion yuan ($156.5 million) worth of settlement made with South Africa and 2.3 trillion yuan with Mauritius, for example.



The popularity of using the yuan has been increasing in Africa, and more central banks are considering including the currency in their reserve portfolios, reported various governors of African central banks at the forum."


http://www.zerohedge.com/news/after-creating-dollar-exclusion-zones-asia-and-south-america-china-set-corner-africa-next

[bacpacker]

Here is another article, this one more about the US.

"Trade-Off": A Study In Global Systemic Collapse Submitted by Tyler Durden

"And now a little something for everyone who consistently has a nagging feeling that at any second the world is one short flap of a butterfly's wings away from complete systemic disintegration: according to David Korowicz of FEASTA, and his most recent paper: 'Trade-Off: Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse." that just may be the case.

Without further ado, we hand over the mic to the author:

This study considers the relationship between a global systemic banking, monetary and solvency crisis and its implications for the real-time flow of goods and services in the globalized economy. It outlines how contagion in the financial system could set off semi-autonomous contagion in supply chains globally, even where buyers and sellers are linked by solvency, sound money and bank intermediation. The cross-contagion between the financial system and trade/production networks is mutually reinforcing.



It is argued that in order to understand systemic risk in the globalized economy, account must be taken of how growing complexity (interconnectedness, interdependence and the speed of processes), the de-localisation of production and concentration within key pillars of the globalized economy have magnified global vulnerability and opened up the possibility of a rapid and large-scale collapse. ‘Collapse’ in this sense means the irreversible loss of socio-economic complexity which fundamentally transforms the nature of the economy. These crucial issues have not been recognized by policy-makers nor are they reflected in economic thinking or modelling.



As the globalized economy has become more complex and ever faster (for example, Just-in-Time logistics), the ability of the real economy to pick up and globally transmit supply-chain failure, and then contagion, has become greater and potentially more devastating in its impacts. In a more complex and interdependent economy, fewer failures are required to transmit cascading failure through socio-economic systems. In addition, we have normalized massive increases in the complex conditionality that underpins modern societies and our welfare. Thus we have problems seeing, never mind planning for such eventualities, while the risk of them occurring has increased significantly. The most powerful primary cause of such an event would be a large-scale financial shock initially centering on some of the most complex and trade central parts of the globalized economy.



The argument that a large-scale and globalized financial-banking-monetary crisis is likely arises from two sources. Firstly, from the outcome and management of credit over-expansion and global imbalances and the growing stresses in the Euro zone and global banking system. Secondly, from the manifest risk that we are at a peak in global oil production, and that affordable, real-time production will begin to decline in the next few years. In the latter case, the credit backing of fractional reserve banks, monetary systems and financial assets are fundamentally incompatible with energy constraints. It is argued that in the coming years there are multiple routes to a large scale breakdown in the global financial system, comprising systemic banking collapses, monetary system failure, credit and financial asset vaporization. This breakdown, however and whenever it comes, is likely to be fast and disorderly and could overwhelm society’s ability to respond.



We consider one scenario to give a practical dimension to understanding supply-chain contagion: a break-up of the Euro and an intertwined systemic banking crisis. Simple argument and modelling will point to the likelihood of a food security crisis within days in the directly affected countries and an initially exponential spread of production failures across the world beginning within a week. This will reinforce and spread financial system contagion. It is also argued that the longer the crisis goes on, the greater the likelihood of its irreversibility. This could be in as little as three weeks. This study draws upon simple ideas drawn from ecology, systems dynamics, and the study of complex networks to frame the discussion of the globalized economy. Real-life events such as United Kingdom fuel blockades (2000) and the Japanese Tsunami (2011) are used to shed light on modern trade vulnerability."


http://www.zerohedge.com/news/trade-study-global-systemic-collapse