Secret summit of top bankers

[skyson]

Hmmm, I am surprised that no one picked up this news here:

Secret summit of top bankers :

THE world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets.

Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports.


Organised by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies.


Speculation that the chairman of the US Federal Reserve, Dr Ben Bernanke, would make an appearance could not be confirmed last night.


The event will be dominated by Asian delegations and is expected to include governors of the Peoples Bank of China, the Bank of Japan and the Reserve Bank of India.

Top banker Jean-Claude Trichet cuts Aussie trip short

EUROPE'S top central banker Jean-Claude Trichet yesterday cut short his visit to Australia as fears intensified in global bond markets that Greece, Portugal and Spain would default on sovereign debt this year and trigger a new financial crisis.

Mr Trichet, the president of the European Central Bank, left a meeting of central bank governors in Sydney a day early to attend an emergency summit of European Union leaders later this week.

His sudden departure came as risk premiums continued to blow out on bonds issued by debt-laden European governments such as Greece, Portugal, Italy and Britain.

Mr Trichet arrived in Sydney at the weekend where he had high level talks with the governor of the People's Bank of China, Dr Zhou Xiaochuan.

Jim Sinclair's take:

My Dear Extended Family,

I doubt there has ever been a time in financial history when there has been challenges of this magnitude.


This is not business as usual in any form.


When have financial meetings been so top secret?
When has the military cordon off financial meetings?
When have F-18s, F-22s and French Rafales provided air support (as the Swiss did for the Davos seminar) for two central bank meetings in the last few weeks as the USA and Australia did?


Don’t accept terrorism as an excuse for everything that remains unexplained. There are so many lies and so much misinformation out there that the task of figuring out what is real is a daunting task.

My tin foil hat tells me that something is up...

[GRG55]

Re: Secret summit of top bankers

Hmmm, I am surprised that no one picked up this news here:

Secret summit of top bankers :

Top banker Jean-Claude Trichet cuts Aussie trip short

Jim Sinclair's take:


My tin foil hat tells me that something is up...

I'm not quite certain why everyone thinks this was a "secret" meeting?

Frankly I think they were just tired of snow, dog sledding, caribou medallions and the thought of more seal meat pie. Apparently time for an excuse to go someplace warm, where they can hold the usual shrimpfest on the barbie...

Treat for elite as Reserve Bank celebrates
JESSICA IRVINE, VANDA CARSON AND ELLIE HARVEY

February 9, 2010

CENTRAL bankers are an unobtrusive breed by nature and necessity. So it might have escaped the attention of many that Sydney is playing host to a meeting of some of the world's top money men and women to celebrate the 50th birthday of the Reserve Bank of Australia.

However, a secretive gala dinner at the Art Gallery of NSW to mark the event last night attracted a who's who of Australia's political and business world.

Bankers rubbed shoulders with celebrated economic figures. Past prime ministers from both sides of the political divide gathered to drink a toast to Australia's success in weathering the global economic storm, including John Howard and Paul Keating.

Past treasurers included Peter Costello, John Dawkins, John Kerin and Ralph Willis. And, of course, the RBA was well represented, with governor Glenn Stevens and former governors Ian Macfarlane and Bernie Fraser in attendance...

...The visit by central bankers includes the president of the European Central Bank, Jean-Claude Trichet, the presidents of the Federal Reserve Banks of San Francisco and New York, Janet Yellen and William Dudley, the governor of the People's Bank of China, Zhou Xiaochuan, the governor of the Bank of Israel, Stanley Fischer, and New Zealand's Reserve Bank governor, Alan Bollard...

...Today's meetings will kick off with a session to discuss a paper co-authored by Mr Stevens on the challenges facing central banks. Mr Macfarlane will chair a second session on the financial sector, and the day will conclude with a discussion led by Ross Garnaut on supply side issues...

[Chris]

Re: Secret summit of top bankers

Obviously, their carbon credentials are secondary to saving the world from imminent financial desctruction. Where are the holier-than-thou politicians calling out these evil polluting central bankers and economists for flying around the world to attend a meeting they could do be teleconference?

The only stable metric i've found throughout this crisis is the relationship between length of recession and hypocrisy. And that relationship is of an exponential nature.

[Fiat Currency]

Re: Secret summit of top bankers

My tin foil hat tells me that something is up...

Anybody want to make a friendly wager that after some time subsides, we'll start seeing discussions to firm up a plan to move to IMF SDRs within the Central Banking system? :eek:

IMF SDRs - the ultimate fiat currency for a broken global fiat currency system.

That should fix everything for another 36 years or so :rolleyes:

[skyson]

Re: Secret summit of top bankers

Anybody want to make a friendly wager that after some time subsides, we'll start seeing discussions to firm up a plan to move to IMF SDRs within the Central Banking system? :eek:

IMF SDRs - the ultimate fiat currency for a broken global fiat currency system.

That should fix everything for another 36 years or so :rolleyes:

Unfortunately, the value of YOURSELF(Fiat Currency) is not determined by YOURSELF(the issuer), but by the parties who are receiving them.

Be it US dollar, or IMF SDRs, their value rests on the willingness of acceptance of their trading partners, or the collective judgment of the people who will trade their labor for those accounting units(paper currency). In this regard, TPTBs are powerless, for they could not force a value on something that has no value. In addition, TPTBs of the world are not united. Their interests are different, which will hinder their cooperation in a crisis.

So, this simpleton's view of future is that this is high time for the return of "real money". Whatever that is, the producers or resource providers of the world, and the people will have the ultimate say. The battles will be fierce, but "people want to be freed". Who can say it better than Mr. Greenspan? - Gold and Economic Freedom.

[ThePythonicCow]

Re: Secret summit of top bankers

Anybody want to make a friendly wager that after some time subsides, we'll start seeing discussions to firm up a plan to move to IMF SDRs within the Central Banking system? :eek:

IMF SDRs - the ultimate fiat currency for a broken global fiat currency system.

That should fix everything for another 36 years or so :rolleyes:

Yup - that's what I'm figuring will happen (except I don't recall being as exact about how long that fix will hold.)

[ThePythonicCow]

Re: Secret summit of top bankers

Be it US dollar, or IMF SDRs, their value rests on the willingness of acceptance of their trading partners, or the collective judgment of the people who will trade their labor for those accounting units(paper currency). In this regard, TPTBs are powerless, for they could not force a value on something that has no value.

TPTB would be shown to be powerless if they could not force this paper into use. But TPTB are not so powerless, and will not fail in this matter.

I don't expect that TPTB will force us workers, pensioners and commoners to use SDR's as currency.

Rather I expect TPTB will institute a change in the world's reserve currency, as used "within the Central Banking system" (to quote Fiat Currency), from U.S. Dollars to some IMF concoction, along with stiffer rules for banks, and continuing to elevate China to a first world financial player.

I'll still use U.S. dollars for money, but those dollars will get fewer foreign goods, and the U.S. dollar will no longer be the world's reserve currency.

[skyson]

Re: Secret summit of top bankers

TPTB would be shown to be powerless if they could not force this paper into use. But TPTB are not so powerless, and will not fail in this matter.

I don't expect that TPTB will force us workers, pensioners and commoners to use SDR's as currency.

Rather I expect TPTB will institute a change in the world's reserve currency, as used "within the Central Banking system" (to quote Fiat Currency), from U.S. Dollars to some IMF concoction, along with stiffer rules for banks, and continuing to elevate China to a first world financial player.

I'll still use U.S. dollars for money, but those dollars will get fewer foreign goods, and the U.S. dollar will no longer be the world's reserve currency.

I think we need to look at it on two levels:

On the individual level, within a state, the government of course could enforce the use of a paper legal tender. However, if the "money is bad", it will eventually lose its status of preferred method of payment. People are not stupid. History tells us again and again, that "good money" will be kept and hold by people and "bad money(paper or ever diluted gold or silver coins)" will be returned to the government or the dumb market. I believe in front of our eyes, this is history repeating itself. There is this monetary Darvinism - only the fittest survive, and the fittest is gold/silver in terms of money.

On the Titans level, will the governments of states trust each other again, after all these financial crisis, on the mere paper promise of payment in the future for real things(goods)? More specifically, will producers like China and Japan, resource providers like Canada and Oil countries exchange their tangibles for paper promises, be it US dollar or SDRs?

To think that the current paper financial/trading system could go on, is to think that our generation is the dumbest human beings in world history.

Going back to the original news story, are we to believe all the top bankers of the world converged in Sydney to enjoy a holiday gathering? Oh I could see Mr. Zhou Xiaochuan come up to Mr. Bernake, wine in hand, and ask:"I heard you got 8,000 tons of gold. That could buy 10 years of toys for all the kids in America".

[ThePythonicCow]

Re: Secret summit of top bankers

Well, I'm certainly not claiming that the current system can go on.

But I am saying we don't just collapse back to hard (gold redeemable) currency.

I'm also saying that the Dollar does not collapse like currencies in other nations and times. This time is different (famous last words, I know .)

I'm saying that the Dollar collapses in two phases, which may take several decades to play out.

• In the first phase, happening in slow motion right now, the Dollar loses its global reserve status, subjugated to a new global reserve meta-currency backed by the BIS, along with tightened bank regulations. This will have some nasty affects on the American economy, especially the FIRE economy.
• In the second phase, perhaps decades later, the Dollar, as just another national/regional currency, blows up like so many currencies have for so many centuries.

Eventually the new world reserve meta-currency will fail as well, but that is beyond the reach of my crystal ball to understand, and likely will be beyond my personal life expectancy to experience.

I expect brief periods when physical gold goes ballistic, such as when GLD and COMEX gold futures collapse, or perhaps when this new world reserve meta-currency is formed, if it has some partial gold basis. However the only way back to wide spread use of hard currency is following a major collapse of human civilization. That I hope does not happen.

Rather, when the new world reserve meta-currency fails in yet another few decades, I hope that those alive then will be able to construct yet another functioning world monetary system.

There may be historical precedent for my claiming that "this time is different." The British Pound Sterling lost it's dominance (and gold backing) around World War I (with an attempt to restore its gold backing in the 1920's.) It was not until the 1960's and 1970's (see for example Papers on the 1976 Sterling crisis and IMF loan) that the British Pound encountered a major currency crisis.

I'm saying that a world dominant currency doesn't crash overnight, especially when backed by a major economy and dominant military. It loses it's dominance, and then later on is susceptible to the same risk of currency crisis as other ordinary currencies.

[skyson]

Re: Secret summit of top bankers

Well, I'm certainly not claiming that the current system can go on.

But I am saying we don't just collapse back to hard (gold redeemable) currency.

I'm also saying that the Dollar does not collapse like currencies in other nations and times. This time is different (famous last words, I know .)

I'm saying that the Dollar collapses in two phases, which may take several decades to play out.

• In the first phase, happening in slow motion right now, the Dollar loses its global reserve status, subjugated to a new global reserve meta-currency backed by the BIS, along with tightened bank regulations. This will have some nasty affects on the American economy, especially the FIRE economy.
• In the second phase, perhaps decades later, the Dollar, as just another national/regional currency, blows up like so many currencies have for so many centuries.

Eventually the new world reserve meta-currency will fail as well, but that is beyond the reach of my crystal ball to understand, and likely will be beyond my personal life expectancy to experience.

I expect brief periods when physical gold goes ballistic, such as when GLD and COMEX gold futures collapse, or perhaps when this new world reserve meta-currency is formed, if it has some partial gold basis. However the only way back to wide spread use of hard currency is following a major collapse of human civilization. That I hope does not happen.

Rather, when the new world reserve meta-currency fails in yet another few decades, I hope that those alive then will be able to construct yet another functioning world monetary system.

There may be historical precedent for my claiming that "this time is different." The British Pound Sterling lost it's dominance (and gold backing) around World War I (with an attempt to restore its gold backing in the 1920's.) It was not until the 1960's and 1970's (see for example Papers on the 1976 Sterling crisis and IMF loan) that the British Pound encountered a major currency crisis.

I'm saying that a world dominant currency doesn't crash overnight, especially when backed by a major economy and dominant military. It loses it's dominance, and then later on is susceptible to the same risk of currency crisis as other ordinary currencies.

OK, it is tempting to "time the market" or project the present into the future for a bit much too long. It turns out that figuring out the "time" and "scale" of a crisis is an impossible task, and you indeed could be "fooled by the randomness". However, we do know that an avalanche is coming, and the more it is postponed the more severe of the scale when it occurs.

In this dangerous times, I believe the financial system has entered into a "critical state". I would think at present time, you could never prepared too much and too early. If you are a back country skier, would you wait until you hear the noise of a thunder to escape the mountain range? It always amazes me that every year, in the snow covered BC interior of Canada, many lives will be buried under carpets of snow after avalanches. They all were experienced skiers/local residents, yet the "this won't happen to me"/"I know better" mentality brought themselves unfortunate disasters.

So what happens in our game? "... after the pile evolves into a critical state, many grains rest just on the verge of tumbling, and these grains link up into 'fingers of instability' of all possible lengths. While many are short, others slice through the pile from one end to the other. So the chain reaction triggered by a single grain might lead to an avalanche of any size whatsoever, depending on whether that grain fell on a short, intermediate or long finger of instability."

Now, we come to a critical point in our discussion of the critical state. Again, read this with the markets in mind (again, emphasis mine):

"In this simplified setting of the sandpile, the power law also points to something else: the surprising conclusion that even the greatest of events have no special or exceptional causes. After all, every avalanche large or small starts out the same way, when a single grain falls and makes the pile just slightly too steep at one point. What makes one avalanche much larger than another has nothing to do with its original cause, and nothing to do with some special situation in the pile just before it starts. Rather, it has to do with the perpetually unstable organization of the critical state, which makes it always possible for the next grain to trigger an avalanche of any size."

Another Finger of Instability by John Mauldin

[jtabeb]

Re: Secret summit of top bankers

In this dangerous times, I believe the financial system has entered into a "critical state". I would think at present time, you could never prepared too much and too early:

Words I've lived by for the last 7 years (made some money while I was at it, too)

[ThePythonicCow]

Re: Secret summit of top bankers

OK, it is tempting to "time the market" or project the present into the future for a bit much too long. It turns out that figuring out the "time" and "scale" of a crisis is an impossible task, and you indeed could be "fooled by the randomness". However, we do know that an avalanche is coming, and the more it is postponed the more severe of the scale when it occurs.

Perhaps it is not I who is timing the market, but yourself.

We both agree that the "final avalanche" is coming. Are you presuming that it will come in your investing lifetime? I am suggesting it might come later, and that there might be an interim period that is still characterized by a world paper reserve currency, just not the Dollar. This interim period might outlast any of us old enough to read iTulip.com, or it might sputter and collapse forthwith into a gold and silver backed monetary system.

I'm recommending you don't put all your eggs in the gold and silver basket. I have some in each of gold and silver, some dollars, my "bunker" and the tools of living, and my physical, mental and financial resilience.

Yes, it is unwise to travel in snow country assuming the avalanche will never happen right here, right now. But it is equally unwise to bet one's entire stash that it will happen right here, right now (unless you're a big enough bad boy with a truck load of dynamite and have chosen to make it happen so.)