Yuan Added to IMF SDR

For those that have been following any reliable source of economic news, inevitably there has been multiple mentions of the Chinese Yuan being added to the SDR (Special Drawing Rights) basket of so called “world reserve” currencies. Up until the IMF’s decision to add the Yuan, the SDR basket was comprised of the US Dollar, UK’s Pound Sterling, Japaneese Yen, Canadian Dollar, and the Swiss Franc. What we will say is that admission to the SDR “world reserve currency club” is largely symbolic (if anything) based upon Evolution 4.0 research. We would ask our readers to realize that all five of the existing world reserve currencies have something in common: They are not asset backed. Same can be said for the Yuan… for now. Additional information on the “for now” caveat later in this article.

Having done quite a bit of research on the Yuan’s rise to “world reserve status” in terms of the IMF’s SDR: The addition of the Chinese currency was not so much a “choice” by the IMF, rather than capitulation to inevitability. China as a global economy is effectively the poster child of “emerging market success”. Keep in mind it was not more than a decade ago when china was largely looked at as an “emerging market”. A decade later, suffice to say, that market has emerged as one of if not the most powerful economy on the planet, complete with tremendous influence over the global banking industry. However, what the IMF may have invariably done is let in the “Trojan Yuan”. (Credit to V the Guerrilla economist for that tagline). Once again, not that there was much of a “choice” involved, but the IMF has opened the door for the Chineese to “obsolete” the other five currencies in the SDR basket in one fell swoop. That one fell swoop can be the complete or even partial metals (gold and silver) backing of the Yuan. It does not take a study of economics to realize that if one of the six so called world reserve currencies has real asset backing and is then by definition not a “fiat” currency, then logic dictates: Which one of those six is the most desirable to conduct any form of transactionary business with.

Now adhering to a popular colloquialism of “go big or go home”… we suspect that based upon recent economic activity, the Chinese are going to “go big”. Big being the fact that they may “absorb” other currencies (the rouble, the rupee, etc) into what effectively has been referred to previously as a “Eurasian trade zone dollar”. “Huge” would be consolidating the majority or perhaps all of the BRICS (125+ nations currencies) into a merger with the Yuan. The means (infrastructure in which to do exactly that) is likely built into or being built within the AIIB (Asian International Infrastructure Bank). Note: The AIIB is effectively the Bank of Settlement for all BRICS / BRICS Affiliated nations. Evolution 4.0 information indicates the chances of this happening are about 85% or higher. In fact, over the past two years, parity moves of major BRICS nations currency in relation to the Chinese Yuan have been seen. The Chineese Yuan would then be the first metals backed currency giving it something of an unspoken seniority in the grander hierarchy of global exchange currencies. Also, the Yuan becomes something of a trend setter that would likely lead to additional consolidation of global currencies based upon metals backing. Based upon Evolution 4.0 research, the metals backing of the Yuan could in theory provide the answer (or a very accurate benchmark of) “what is the purchasing power of metals after the global economic rest”. While based upon our research we realize that there is quite a bit more information to consider when one talks about the “global economic reset”, there is no question that economics is perhaps the most critical component. As such we have actually begun calling the “global economic reset” simply the “global reset” predicated upon the fact that while yes, economics will be a major component, there are many other socio-anthropological paradigm shifts taking place simultaneously.

We will be posting additional information on the Yuan/Metals effect both in our commentary section as well as in future editions of Wirehaus. For those who are currently investing in, or are considering investing in metals we do encourage you to visit the Grant Street Notes page to pre-order (released December 20th 2015) a copy of the GSN Metals Investing Guide 2016. The GSN Metals Guide features Evolution 4.0 systemic forecast information as well as analysis on countless global economic / metals related topics.

Note: We will be posting a piece soon on gold “claims” vs actual available supply. Another key catalyst in the likely astronomical rise of metals spot valuations.