Soon near you: Gold as Money and a New SWIFT System?

Image by Stuart Miles / / (1)

“Soon expect to see an Eastern SWIFT system”
“The entire trade settlement system on bank payments
is on the verge of a major schism,
a split away from the US-dominated methods.”

Jim Willie

“The implications of China paying for Iranian oil in gold
is the most important event
in the modern history of gold.”

Jim Sinclair

“What we are witnessing is a sea change
in which market forces are driving a de facto return
to the gold standard.”

Professor Lew Spellman, University of Texas

Extracted from: US Dollar VS Gold: Epic Money Battle
by  Jim Willie CB

April 25, 2012

(…) On June 28th, the SWIFT bank code law goes into force to obstruct transactions. The abuse of SWIFT codes against enemies and allies alike has taken the backfire into second gear. Big strategic mistakes are being made. The G20 nations have a brain trust in the BRICS core, which has decided to pursue an alternative method of trade settlement. They describe a method to satisfy trade obligations and payments. They describe a departure from exclusive US$ settlement. They actually are working on a rival SWIFT code system from Asia, without the name. It will soon match the Western SWIFT system stride for stride in rivalry. Bigger bank centers in Asia will arise, including perhaps maritime insurance, as crippled Lloyds pulls out. Soon expect to see an Eastern SWIFT system, that China hints might be gold-backed. The main body of trade to test the new system will be on crude oil sales. The entire trade settlement system on bank payments is on the verge of a major schism, a split away from the US-dominated methods.

The several bilateral Iranian oil deals pushed the movement toward a more organization system in a backfire against the United States. The USGovt has effectively accelerated the global response to replace the USDollar in trade settlement. The misguided SWIFT weapon usage encouraged several US allies to entertain the new Eastern alternative, so that at a later date it will be embraced and used more widely. The poor chess move by the USGovt on the table sacrifices the queen. (…)

(…) It is all coming together. The USGovt sanctions against Iran have pushed the pace of the process. With the Eastern SWIFT payment system among banks, the foundation has become more concrete suddenly. As it slams into place on the global financial landscape, the shock waves should deliver tremor episodes to the USDollar and its corrupted custodians. Witness the early birth pangs of Eurasia, which has not been a cohesive force since the Ottoman Empire. History is coming full circle. (…)

Jim Willie CB, editor of the “HAT TRICK LETTER”

home: Golden Jackass website             

Complete article here:

copyright ©2010 24hGold

The implications of China paying for Iranian oil in gold is the
most important event in the modern history of gold

Extracted from:

April 24, 2012

Harvey Organ: “Jim Sinclair and how gold will be used by China and others as they are threatened by exclusion of the SWIFT payment system: (courtesy Jim Sinclair)”

1. It is reasonable to assume that China has been threatened with
total or at least selective exclusion from the SWIFT system if it pays
in any currency for Iranian oil.

2. Gold has been by China’s elected as the means of making payment for
massive international purchases free of the SWIFT system.

3. Other Asian and Middle Eastern nations will now see the gold they
hold as money free of Western economic interference.

4. Gold now is not only money free of liability, but also free from
interference regarding settlement by the long arm of Western influence.

5. The SWIFT system is becoming ever more a weapon of Western
international political will.

6. In case of war anywhere it is now demonstrated for all to see that
only gold will buy the materials required. Paper currency are under
the SWIFT system’s control in settlement.

7. Far from being a Barbaric Relic gold is now clearly the Money of
State Survival in every sense.

8. It is reasonable and possible for the supply of physical gold to
fall far behind the size massive short positions as now common to
algorithm and hedge fund paper short making an effective cover at a
reasonable price as compared to a a certain days close impossible the
following day on an exogenous event.

9. It may not be possible to use TA of any nature to determine a price
of overvaluation for gold. Should the USA decide it wise to take on
China in full out economic war such as isolation from the SWIFT system
is with the physical market totally illiquid consider the price that
might result.

The Gold Standard Shuffle

by Dave in Denver
April 23, 2012

What we are witnessing is a sea change in which market forces are driving a de facto return to the gold standard. All that is missing for this to be a de jure gold standard is some regulatory and legal recognition and one has been proposed. The Basel Committee for Bank Supervision, the maker of global capital requirements is studying making gold a bank capital Tier 1 asset.    –  Professor Lew Spellman, University of Texas from The Spellman Report (link below).

The source of that quote is a must-read essay written by Lew Spellman, who is a professor of finance at the University of Texas of business school.  He has also served as Assistant to the Chairman of the President’s Council of Economic Advisors and as an economist at the Federal Reserve.  It is the latter two prestigious roles which make it both surprising that Professor Spellman would have written this essay and, yet at the same, thereby reinforces its validity.  You will not find this piece mentioned in ANY mainstream media news source in this country.

Spellman lays out the case for for the subtle, systemic manner in which gold is slowly creeping back into use by the banking system as an asset being used to back paper currencies and financing transactions. Those of us who study the precious metals markets on a daily basis, in the context of the overall global financial system, have been pointing to this dynamic for a while now.  For instance, Spellman links the announcement in which the Basel Committee is studying making gold a Tier 1 banking asset.  This was announced several months ago and remarked upon widely in the precious metals community.  I doubt anyone’s financial adviser called them up to point this out.

The market, along with the massive Central Bank accumulation of gold by China, Russia and several of China’s strategic allies – like the other BRIC countries – is starting to force this transformation.  I say “the market” because most of the collateral that has been pledged to secure paper financial transactions has been pledged/rehyopothecated (see MF Global, Lehman, Madoff).  This is especially true in the repo market where sovereign paper/Treasuries was historically the only asset to be used.  Now Central Banks have stretched the range of credibility and extended collateral status to everything except the Brooklyn Bridge (who knows how many times that’s been rehypothecated…).  The last man standing is gold and it is being forced by the market back into the system as a paper anchor by necessity.  Eventually gold will remain as the bastion of “flight to safety” because of its ultimate utility for that purpose.

Everyone needs to read this essay and make sure they understand what is happening and why.  Here’s the LINK  For me, this essay has “seminal” status because it was written by a former “insider” to elite circles – the elite circles which constantly denigrate and revile gold – and because it will likely expose a wider circle of market observers to a systemic dynamic that is taking place with little or no acknowledgement by 99.5% of all market participants.


Exter’s pyramid / (2)

* Image reference:
(1) Golden 3d Money Text by Stuart Miles

(2) Source:
Copyright ©2009-2012 Media, LTD.

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