On March 24, economist Jim Rickards published an interesting analysis of something that may have taken place last month at the G20 Summit in Shanghai, China. According to evidence that Rickards and others pieced together, a secret conclave occurred between members tied to the IMF’s SDR basket of currencies, and appears to have ordered a hit on the dollar to devalue it at a time when the global economy is falling fast into heavy recession.
And judging by the dollar chart from February 26 (time of the summit) to one month later, something has occurred which has caused the dollar to experience its biggest decline since the middle of last year.
Based on the best information we’ve been able to obtain, it looks like the dollar has just been Shanghaied by the G-20 (the unelected, unaccountable group of 20 nations that collectively control the world monetary system).
This could be the most important financial development of 2016, with enormous implications for you and your portfolio.
Once again, the city of Shanghai is the center of attention. This new effort to knock out the dollar was contrived in a secret meeting in Shanghai on Feb. 26.
Who attended the meeting?
The list of names reads like a rogues’ gallery of central planners and currency manipulators. Janet Yellen from the Fed, Christine Lagarde from the IMF, Mario Draghi from the ECB and U.S. Secretary of the Treasury Jack Lew were all there, along with their central bank and finance ministry counterparts from Japan, China and the other BRICS.
The main meeting of the G-20 finance ministers and central bank governors was no secret. It was conducted with much fanfare and publicity. Thousands of reporters descended on Shanghai to cover the proceedings.
A side meeting of a core group consisting of the U.S., Europe, Japan, China and the IMF was a secret. This group really calls the shots.
The U.S., Europe, Japan and China together represent over 70% of global GDP. The IMF acts as a kind of facilitator for these secret meetings, and an “enforcer” for whatever agreements are reached behind closed doors.
The outcome of this secret side meeting was the biggest dollar take-down operation since the famous Plaza Accord of 1985. – Daily Reckoning
Indeed, a collaborative war on the dollar could also explain why the Fed backtracked earlier this month when they announced that not only would they not be raising interest rates in March, but that they are also cutting potential future rate hikes for the year down from four to possibly only two.
It will be interesting to see what the dollar does over the next few weeks, especially as analysts have been forecasting sharper declines for the currency even as nations dump their reserves at record rates ($57 billion in January alone). And perhaps even more importantly, it will fascinating to watch what what the consequences of dollar devaluation will have for other countries like the Eurozone, Japan, and China, who have also been purposely devaluing their own currencies for several years now.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.