Now China and the IMF are in talks to include the Chinese Yuan as the Next RESERVE CURRENCY.

Are you familiar with the SDR’s (Special Drawing Rights) !?
The International Currency issued by the IMF held as reserves in central banks globally.

SDRs are international foreign exchange reserve assets. Allocated to nations by the IMF, an SDR represents a claim to foreign currencies for which it may be exchanged in times of need. Originally created by the IMF in 1969 for m
embers and prescribed holders to use their SDR holdings to conduct transactions with the IMF.

The nominal value of an SDR is derived from a basket of currencies, with, specifically, a fixed amount of Japanese Yen, US Dollars, British Pounds and Euro’s, without RMB.

A senior Chinese central bank official said Thursday that the country is “actively communicating” with the IMF on the possibility of including the yuan, or RMB, in the basket of the Special Drawing Rights (SDRs).

From Wikipedia: Special drawing rights (XDR aka SDR) are supplementary foreign exchange reserve assets

From the IMF: SDR Allocations and Holdings for all members as of February 28, 2015

How will CHINA’s move one step closer to becoming an OFFICIAL RESERVE CURRENCY effect your portfolio !?

Yuan

China is pushing for the International Monetary Fund to endorse the Chinese Yuan as a global reserve currency alongside the dollar and Euro.

A senior Chinese central bank official said Thursday that the country is “actively communicating” with the IMF on the possibility of including the Yuan, or RMB, in the basket of the Special Drawing Rights (SDRs).

Including the Yuan in the SDR system would allow the IMF to recognize the ascent of the world’s second-biggest economy while aiding China’s attempts to diminish the dollar’s dominance in global trade and finance.

“We hope the IMF can fully take into account the progress of RMB internationalization, to include RMB into the basket underlining the SDR in foreseeable, near future,” said Yi Gang, vice governor of the People’s Bank of China.

The Yuan became the world’s No. 2 currency for trade finance globally in 2013, and overtook the Canadian and Australian dollars to enter the top five world payment currencies in 2014, according to global transaction services organization SWIFT.

China said the Yuan has also been used as a reserve currency in some countries and regions.

LINK TO STORY: China-IMF talks under way to endorse Yuan as global reserve currency

What Happened Last Week !?

FINANCIAL REPRESSION for Dummies…

Currency Wars: A Race to the Bottom

currency-wars-devaluation

Currency Wars: A Race to the Bottom

“Printing dollars at home means higher inflation in China, higher food prices in Egypt and stock bubbles in Brazil. Printing money means that U.S. debt is devalued so foreign creditors get paid back in cheaper dollars. The devaluation means higher unemployment in developing economies as their exports become more expensive for Americans. The resulting inflation also means higher prices for inputs needed in developing economies like copper, corn, oil and wheat. Foreign countries have begun to fight back against U.S.-caused inflation through subsidies, tariffs and capital controls; the currency war is expanding fast.”Jim Rickards, Currency Wars

Many consider deliberate currency devaluation to be a tool that can help jump start a nation’s economy. The aim of such a practice is to increase exports while encouraging domestic purchases by making goods outside of the country relatively more expensive.

However, like any good prisoner’s dilemma, this might be the case if only one country acted in isolation. The reality is that many major countries engage in the same policy, and the end result – as the infographic details – is a race to the bottom.

So far the “winner” in the race is Japan.
The BoJ has been rolling with the Abenomics plan for almost two years now and the results are in…

yen

The BoJ’s balance sheet has since exploded in size and they also have the highest public sector debt in the world.

japan public debt.png

Original infographic from: Saxo Markets UK

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  • Hedging currency risk and exchange rates

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Unreported foreign accounts face penalties of 50% of the historical high balance of the account!

“If you have an unreported foreign account, time is quickly running out to comply. There are amnesty options available but only for those who act quickly. Do nothing and you could face penalties of 50% of the historical high balance of the account.”

Hong Kong Signs FATCA Pact

china-flag fatca

The U.S. Treasury Department has confirmed that Hong Kong has signed an agreement to report certain financial account information directly to the IRS. Under the 2010 FATCA law (Foreign Account Tax Compliance Act), foreign banks must review their accounts and report any accounts with ties to the United States. Banks that fail to comply are subject to high withholding taxes and may find it difficult to continue to do business in global markets.

Over 40 countries have signed formal FATCA agreements with dozens more under negotiation. Hong Kong’s agreement, however, is a bit unusual. Most countries have crafted agreements that require the financial institution to report information to that institution’s domestic tax authority, which in turn sends it to the IRS. Many foreign countries are reluctant to have banks providing information directly to the United States.

Hong Kong has elected to join Bermuda, Austria, Japan, Switzerland and Chile as the countries that will require their banks to report directly to the IRS…

Hong Kong Signs FATCA Pact

Financial repression

UK Debates Money Creation £ !!

For the first time in 170 years, the British Parliament is going to debate how money is created.

The debate will be broadcast live on Thursday, November 20th starting between 12.30 & 1.00PM GMT, or 07.30 EST on the Parliament TV Channel;  Link to the UK Parliament Channel

From Bill Still, director, narrator, and producer of the documentary films The Money Masters and The Secret of Oz, both of which critique the system of monetary control by the U.S. Federal Reserve System.

100 Swiss Banks Get Ultimatum: Hand Over Americans Or Face U.S. Prosecution

Since 2009, the U.S. has had unprecedented success with ferreting out offshore accounts. It started in 2008 with key court victories against UBS. In 2009, UBS paid $780 million to the IRS and upended Swiss banking forever by handing over Americans. Many other banks followed suit, and the costs keep rising. Recently, Credit Suisse plead guilty and paid a $2.6 billion fine.

Now, from its position of dominance, the Justice Department has made it clear what it wants from the hundred Swiss banks that hurriedly grabbed the DOJ’s settlement deal before January 1, 2014. The U.S. seeks ‘total cooperation’, and that truly means total. Any American names, details, and more. The Justice Department intends to get it all.

The consequences of the Swiss not complying? You guessed it: prosecution. There were 14 Swiss banks under criminal investigation that were therefore ineligible for the deal. Such Swiss banks remain under the dark cloud of a U.S. investigation, including Julius Baer, and Pictet & Cie. Approximately 100 banks took the Justice Department settlement deal before the December 31, 2013 deadline.
image But the terms of the non-prosecution agreement were not available until now, 10 months after these 100 banks signed on.There seemed to be little choice about taking the deal, given what was happening to any Swiss bank that even tried to resist. The U.S. settlement deal broke Swiss banks into several categories, with more serious penalties for the worst offenders.

A key group is the category two banks. They have reason to believe they may have committed tax offences, and they can escape prosecution by detailing their wrongdoing with U.S. clients and paying fines. The draft non-prosecution agreement does not involve guilty pleas or criminal penalties.

However, all banks must report to U.S. authorities any information or knowledge of activity relating to U.S. tax. They must reveal all cross-border activities and close the accounts of Americans evading taxes. The 3 tiers of penalties are vastly better than a full-blown U.S. investigation with potential tax evasion charges. Participating banks are required to provide details on American accounts.

They must also inform on the banks that transferred money into secret accounts or that accepted money when secret accounts were closed. See Signed Joint Statement and Program. Banks that held accounts as of August 1, 2008, must pay a fine equal to 20% of the top dollar value of all non-disclosed accounts. That goes up to 30% for secret accounts opened after August 1, 2008, but before March 2009.

The highest tier of penalties is 50% for accounts opened after that. The 3-tier penalty punishes more recent violators most harshly. Of course, American account holders also remain in the cross-hairs. The U.S. settlement program for banks should not be confused with the IRS programs for Americans seeking to avoid prosecution.

Clearly, U.S. account holders who have not already resolved their issues with the IRS should not waste any time determining which IRS offshore amnesty program is right for them. After all, disclosure is now virtually inevitable, and the banks will presumably bend over backwards to comply. If a banks fails to follow any of the terms of the agreement, it would be void. That means the bank could risk U.S. prosecution.

There is little reason to believe that the U.S. authorities are not deadly serious about this. For depositors and banks alike, disclosure and penalties are vastly better than the alternative. And depositors should beware, since closing foreign accounts is not an alternative to coming clean with the IRS. For Americans who fail to step forward, the IRS and Department of Justice warn of their vast resources.

See original source here for more links to this Forbes article.

Money Market Funds: New Exit Suspensions & Exit Fees!

SEC Approves Tighter Money-Fund Rules
Plan Allows Funds to Temporarily Block Withdrawals in Times of Stress

SECMoney market funds new rules have been passed by the Securities and Exchange Commission;

Money market funds can impose a liquidity fee on redemptions if the fund’s weekly liquidity falls below the level required by regulations.

Redemptions may also be suspended temporarily. The SEC calls them redemption “gates.”

Institutional prime money market funds are required to float the net asset value, or NAV, rather than keeping share prices fixed at $1.

See link: SEC Adopts Money Market Fund Rules

Note: An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.

Google – The New Bank – Rollover BitCoin & Banks – Its the Internet Revolution

The trend to pay attention to is Google Wallet,
which is targeting the traditional banks
.

image

Google has launched in the US market its electronic purse known as the Google Wallet. This form of electronic money enables users to pay for the internet as well as a rising number of stores like Starbucks. However, Google Wallet also allows you to send and receive money. In Europe, the search engine already has a banking license and could start at any time. Because Google’s Android operating system runs on many smartphones, the company has the ready market globally.

Google Wallet has the best conditions to establish their electronic money in Europe including Germany and Switzerland than any other system. The younger the generation, the greater the market share Google already has in place. Extending their business into banking will be much easier than anyone anticipates. Google is poised to emerge as a bank that nobody seems to quite appreciate at this time.

Apple’ latest iPhone is also equipped with a fingerprint sensor. The strategy in product development is clear. With this technology, your cell phone can become the most secure credit card because it will require your fingerprint to function. Apple is using this technology in its music platform iTunes that again is used in a greater proportion as you move down the age group..

Facebook is also applying for a banking license in Ireland. They intend to offer banking using its vast worldwide online network throughout Europe. We are looking at a younger generation moving rapidly to electronic money much faster than the older generations even think is possible.

See link for full article:
Posted by Martin Armstrong at Armstrong Economics