A speech made by IMF Managing Director Christine Lagarde to The National Press Club in January 2014 created a stir later that year amidst speculation on its meaning.
Bullion.Directory precious metals analysis 28 March, 2015
By Terry Kinder
Investor, Technical Analyst
Lagarde’s use of the number seven, magic seven and numbers related to seven caused many to question if there was a hidden numerological aspect relating to the replacement of the U.S. Dollar as the reserve currency. While any hidden meaning behind her speech is an interesting topic, a much simpler and elegant explanation has been proposed by JC Collins at philosophyofmetrics. In The Real Reason the Swiss Peg Ended Collins outlines not only another seven not discussed related to Lagarde’s speech at The National Press Club, but manages to tie it back in not only to the U.S. Dollar’s role as reserve currency, but also to the Chinese Yuan, the Special Drawing Rights (SDR) and gold.
The Lagarde Magic 7 Speech
To put both the magic number 7 buzz and Lagarde’s speech in context it’s best to watch it in its entirety. Some of the shorter clips of the speech may take things out of context or make assertions which may or may not be true.
Hidden Message?
If you watched the entire speech there is something odd about it. Even setting aside speculation about numerology, there is what appears to be a deliberate emphasis on the number seven.
Christine Lagarde, Managing Director of the IMF, created a stir with her “Magic 7” speech Image: Wikimedia
Personally, I don’t doubt that some speeches given by public figures have both a public message and any number of subtexts and / or hidden messages that won’t be picked up on by most people who listen to them. It’s one of the things that made the Lagarde speech so intriguing to me.
JC Collins’ Interpretation of the Lagarde
Collins’ interpretation of the Lagarde speech largely discounts any occult interpretation and points to a more practical, nuts and bolts explanation of what exactly she meant when referring to the magic number 7. Collins sees an expansion of the SDR to expand to the following seven currencies:
- United States Dollar
- European Union Euro
- Japanese Yen
- Great British Pound
- Swiss Franc
- Canadian Dollar
- Chinese Yuan
And that, for those of you playing along at home, adds up to the magic number 7.
James Anderson’s Take on SDRs, the Renminbi (Chinese Yuan), and Gold Revaluation
James Anderson of JM Bullion in the excellent video below outlines the possibility of the Yuan becoming part of the SDR basket, upcoming changes to the global monetary system and the potential revaluation of the gold price.
Anderson also points to this intriguing meeting, co-hosted by the World Gold Council, entitled Gold, the renminbi and the multicurrency reserve system
Conclusion
Certainly the Lagarde video and her reference to the “magic 7” created a stir. In some ways the buzz was warranted. In other ways it was exaggerated.
While it appears the monetary system will undergo significant changes, the U.S. Dollar will stay play a prominent, albeit not dominant role.
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