Posts Tagged ‘money’

China launches global yuan payment system

October 13, 2015

The Central Bank of China’s has launched a global payment scheme which will provide facilities for settlig cross-border trades in yuan. The China International Payment System (CIPS) signalled its intention to internationalize the yuan and challenge the domination of world trade by the US dollar several years ago.

China is backed in this project by Russia and by emerging economies such as Btazil, India and Nigeria and oil exporting states such as Venezuela whose trade had been restricted by American manipulation of currency and commodity markets.

“The establishment of CIPS is an important step in yuan internationalization, providing the infrastructure that will connect global yuan users through one single system,” Helen Wong, greater China CEO for HSBC, was cited as saying by the Financial Times. The move comes less than a year after China launched its Asian Investment Bank, AIIB to rival the World bank and IMF as a financier of infrastructure projects.

CIPS will accept payments in cross-border trade, direct investments, financing and personal remittances. The system is open for operations 11 hours a day. The first CIPS transaction was completed by Standard Chartered Bank for Sweden’s IKEA. Nineteen banks have been authorized to use CIPS; eight of them are Chinese subsidiaries of foreign banks, including Citi, Deutsche Bank, HSBC and ANZ.

Prior to launching CIPS international, transfers in Chinese currency could only be carried out through offshore clearing banks in Hong Kong, Singapore or London. While the procedure was slow and costly, the new system is expected to significantly reduce the cost and time for money transfers.

China is also trying to reduce its reliance on the global transaction services organization SWIFT.

Read More: Russia today >>>

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Terry Pratchett’s Hydraulic Computer Wasn’t A Joke After All

November 30, 2014
In Terry Pratchett’s Discworld novel Making Money which is a satirical story of the creation of a fractional reserve banking system on the Discworld, the Wizards of the Unseen University* help to develop a water driven computer to model the economy of the city state of Ankh Morpork and predict future trends.

MONIAC – the water computer, now a museum piece (source)

 The computer is no more successful that the modern, digital supercomputers used by banks and governments but the book is very funny, it’s central character has the irresistible name of Moist Von Lipwig and while providing plenty of laughs it makes some very sound points about the flaws in the global financial system.

Now since reading the book I have thought the hydraulic computer was a creation of Terry Pratchett’s abundant imagination. I was wrong it seems, there was once, not all that long ago, a hydraulic financial modelling computer named MONIAC – Monetary National Income Analogue Computer. And it was no less successful (i.e. they’re all totally hopeless) at predicting economic trends than the supercomputers used by banks, government agencies and universities that failed to predict the 2008 financial crisis. I’ve linked an article from Zero Hedge below.

Water clocks are a kind of computer of course and have been around from pre Roman times. The earliest documented by contemporary witness accounts was the one in Alexandria, Egypt, in the reign of Nero (1st Cetury AD). There are several examples of medieval water clocks still telling the time in Germany, Netherlands, Belgium, Austria and The Czech Republic.

*you have to be sharp to pick up all Pratchett’s jokes, did you know for instance that Britain’s foremost scientific association, The Royal Society, was in former times nicknamed The Unseen College for the way it steered research.
from Zero Hedge

Presenting The 70 Year Old Hydraulic Computer Used By Central Planners To Visualize Economy

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America’s GDP Surges 4% in Quarter 2 – Jonathan Creek Shows How The Trick Is Done

July 30, 2014

Magic sleuth Jonathan CreekMagic sleuth Jonathan Creek exposes tricksters – economic sleuth Boggart Blog exposes statisticksters

This morning the US Bureau of Economic Analysis, an agency of the Commerce department revealed Q2 GDP statistics which blew made nonesense of estimates, showing year on year growth for the second quarter at 4.0%. This was explained as the result of a surge in Inventories and Fixed Investment, while exports added only 1.23% to the GDP number. The full breakdown by component is shown below.

The BEA noted, “The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the second quarter, based on more complete data, will be released on August 28, 2014.”

Hmmmm – several notes of caution there, and let’s not forget that the corresponding figure (the headline grabber) for the first quarter said GDP had grown by 1.6% for the quarter. This was later revised to -2.9% with the long cold winter (Warmageddonists please note) blamed for the contraction.

See a detailed breakdown of figures as the BEA web site.

What does this mean for the global economy? Nothing really, the economic recovery being puffed by Obama in the USA is as illusory as the one George Osborne is raving about in the UK. And don’t let any economically illiterate idiots tell you everything would be hunky dory if Labour were in power. Remember Osborne’s recovery illusion is employing the same trickery as the Brown Balls Boom of 2001 – 2007.

The real problem is that GDP, the statistic used by most governments as a measure of their economic success, is not a meaningful measure of economic performance. It only measures the amount of money churning through the economy. So ship in a million immigrants, give them £200 a week in benefits and you have grown the economy by £200million a week. Then if you fund that by raising £100million in taxes and borrowing £100million, you have ‘grown’ GPD by £400million a week.

Simples.

Do not trust a word government (of any political party) says. It is the responsibility of the electorate to hold the buggers to account.

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