 |
| Eurasia Trade |
This is one of the most intense plays in the history of the world. The biggest players are Russia and China moving on Europe and America within trade packs. In the West, we have the Pacific trade pack and Russia building on the Eurasia trade. All those crucial oil and gas pipelines crisscrossing Eurasia that make up the true circulatory system for the life of the region. Now, it looks like the ultimate Pipelineistan deal, worth $1 trillion and 10 years in the making, will be inked as well. In it, the giant, state-controlled Russian energy Gazprom will agree to supply the giant state-controlled China National Petroleum Corporation (CNPC) with 3.75 billion cubic feet of liquefied natural gas a day for no less than 30 years, starting in 2018. That’s the equivalent of a quarter of Russia’s massive gas exports to all of Europe. China’s current daily gas demand is around 16 billion cubic feet a day, and imports account for 31.6% of total consumption.
More BRICS cooperation meant to bypass the dollar is reflected in the “Gas-o-yuan,” as in natural gas bought and paid for in Chinese currency. Gazprom is even considering marketing bonds in yuan as part of the financial planning for its expansion. Yuan-backed bonds are already trading in Hong Kong, Singapore, London, and most recently Frankfurt.
Nothing could be more sensible for the new Pipelineistan deal than to have it settled in yuan. Beijing would pay Gazprom in that currency (convertible into rubles); Gazprom would accumulate the yuan; Russia would then buy myriad made-in-China goods and services in yuan convertible into rubles.
It’s common knowledge that banks in Hong Kong, from Standard Chartered to HSBC - as well as others closely linked to China via trade deals - have been diversifying into the yuan, which implies that it could become one of the de facto global reserve currencies even before it’s fully convertible. Beijing is unofficially working for a fully convertible yuan by 2018.
Birth of Eurasia
Meanwhile many expected progress to happen when US President Barack Obama himself went to Japan last month to discuss this, many were disappointed to learn that further talks are needed to come to a final agreement. The deadlock remains to be because of Japan’s refusal to give up tariffs on key products such as farming produce and automobiles, both the bread and butter of the Asian nation. This has affected widely the negotiations of the 12-nations included in the TPP as they wait for the final outcome of the talks between Japan and the U.S.
JDP
U.S. coming up short:
U.S. energy authorities have slashed by 96% the estimated amount of recoverable oil in California's Monterey Shale deposits, deflating its potential as a national "black gold mine" of petroleum, the LA Times reports. Just 600M barrels of oil can be extracted with existing technology, far below the 13.7B barrels once thought recoverable; the new estimate is expected to be released publicly next month. The Monterey Shale formation contains about two-thirds of U.S. shale oil reserves and had been seen as an enormous bonanza for California's economy and U.S. energy security.
Taxes:
Many Americans expecting to see their tax refunds in their bank accounts soon are waking up to a very different scenario: the government actively intercepting their checks in order to pay back debts they’re not responsible for.
According to a new report in the Washington Post, the federal government is seizing nearly $2 billion from hundreds of thousands of taxpayers this year in order to settle debts, some incurred by their parents, some dating back to more than a decade.
This process has been ongoing since 2011 when a revision in the farm bill passed by Congress removed the 10-tear statute of limitations on debts owed to the United States. Since that bill was passed, the government has collected $424 million on debts older than a decade. This year, however, has seen the Social Security Administration (SSA) alone claim that 400,000 Americans owe a total of $714 million in debts older than 10 years.
FATCA (Foreign Account Tax Compliance Act) was initially introduced to target those who evade paying U.S. taxes by hiding assets in undisclosed foreign bank accounts. With such a noble goal, and with the strong backing of the Administration, Congress quickly drafted the FATCA legislation and quietly slipped it into the HIRE (Hiring Incentives to Restore Employment) bill signed into law by President Obama in March 2010. Most members of Congress are unaware of the unintended negative consequences this legislation will have when fully implemented in 2014.
Starting July 1, 2014, FATCA will require FFIs to provide annual reports to the Internal Revenue Service (IRS) on the name and address of each U.S. client, as well as the largest account balance in the year and total debits and credits of any account owned by a U.S. person.
If an institution does not comply, the U.S. will impose a 30% withholding tax on all its transactions concerning U.S. securities, including the proceeds of a sale of securities.
ACA
Many overseas banks are not accepting American accounts and foreign investors have many new emerging markets in which to place their money and the new markets are looking at transparency and true growth. I mean really the U.S. government has known this all along but their broke now, losing allies, the citizens do not trust them and their big money pals are going to bail.
The Chess board does not look good for U.S. the bad move here if these guys do not go away quietly when the Yuan becomes the world currency will they launch?
So Max, can't we print our way out of this?
Planet Ponzi
Globe Backyard TV
