This page has been archived and commenting is disabled.
Are Or Aren't France And China Plotting An Alternative To The Dollar?
A pair of very conflicting news articles over the weekend about secret currency talks caps yet another week full of central bank interventions in the FX arena (and, as Bruce Krasting points out, many more to come). Yesterday, the FT reported that France and China had been in secret talks over "heightened co-ordination of exchange rates" which is another way of saying finding alternatives to the rapidly debasing US Dollar. "The talks and their content have been kept secret, in an attempt to draw China into a discussion on global currency co-ordination, a subject that Beijing has been reluctant to countenance in the past. In an ambitious move reminiscent of the currency accords of the 1980s,
President Nicolas Sarkozy hopes to open a debate on the subject when
France takes over the presidency of the G20 group of leading nations in
November, according to people familiar with the matter." Yet China's desire to engage in a currency axis away from the US is no secret, and many have alleged that Beijing has approached both Russia and Germany in the past about a USD substitute. The timing of the latest escalation of the battle to the currency bottom is not surprising: "The move comes against the background of rising concern over
exchange-rate interventions by a host of countries, most notably China
but also Japan and South Korea, to prevent their currencies from rising
against the dollar." Perhaps China, which has been reticent in exposing its CNY domination plans in the past, was just waiting for the correct provocation to go public with its plans. And last week's move by Congress to retaliate against China and impose duties on imports because of undervaluation may be just that provocation.
Yet, in a response that was launched within minutes of the FT article appearing, France immediately issued a denial of any secret talks, confirming that the counter-USD axis will not hit the mainstream until it has the support and backing (and, most likely, raw material backstop) of all pro forma member countries. Bloomberg chimes in: "France has not held secret talks on currency coordination with China, a French government official familiar with the matter said, denying a report in today’s Financial Times."
Bloomberg also amusingly references the April 2009 G-20 meeting whose pledge has now been overturned by all member countries:
"The G-20 pledged in April 2009 in London to “refrain from competitive
devaluation” of their currencies, and the leaders said at their last
gathering in Toronto in June that “market- oriented exchange rates that
reflect underlying economic fundamentals contribute to global economic
stability."
One wonders what lies the G-20 meeting will pledge this year? Because if the daily interventions by pretty much every single central bank are indicative of anything, we would venture to guess it is precisely "competitive devaluation." Yet in the last days before the collapse of the "status quo", our fearless "developed" leaders can be forgiven for blatantly lying to the people. After all, it is more than obvious that they stand to lose not less than everything when their pet regime finally unravels.
»
- 11703 reads
- Printer-friendly version
- Send to friend
- advertisements -
Not a new paper currency, surely?
Nice writeup by Peter Schiff
poor guy still thinks economics and politics can be kept separate from each other.
Confidence lost Bitchez!
I'm French and this would surprise me. Sarkozy is the most perfect lackey of the USA you could ever find. And a great advocate of the Ponzinomics.
But it does explain why the MSM has turned on Sarkozy in recent days. He may be breaking ranks. As bankers say: If you are ever going to jump, jump first.
He was backing that 1% tax on all financial transactions by banks so they turned on him. I think IMF's Strauss was supposed to be his rival and would find himself in the position of defending his banksters in front of voters.
While refering to "USA" you are not refering to him being led by our constituional framework. Sarkozy works for his brother's friends, The Carlyle Group and other round table groups (RAND for example) and they are globalists who would love to kill (the dollar) bill and usher in a world currentsea.
He works for the current USA, of course. I know the difference between the America of the Founding Fathers and the America of Obamao.
Good so you know whats coming for you. Now go and eat cake! ;)
or this:
Bonomo Turkish Taffy: No Other Taffy Smacks, Cracks, or Tastes like It
http://www.vermontcountrystore.com/browse/Home/Food-Candy/Old-Fashioned-...
Is that a minaret on top of the letter b? I knew it! I knew they would find a back door into the US with "their" candy :-)
Well, maybe he wants to push for a Ponzinomics of his very own. Was already tried during Great Depression, you frog eaters did not have much luck back then...
http://www.marginalrevolution.com/marginalrevolution/2010/09/did-france-...
Ras le bol.
Like mobsters looking at hard time, they'll throw out all rules to save their respective asses. I wouldn't call it competitive devaluation at all. It's really competitive destruction.
So much for G-20 pledges. This motley grouping is as useless as the UN.
the truthfullness of this statement may not suprise you Rainman but it does surprise me. And just what IS the IMF doing exactly?
I does sound logic to me. In Europe we import from China and do the trades in dollars. And that is causing pretty high risks.
The Euro itself is pretty stable compaired to the dollar, so it would be a very good thing for European trade.
I'm pro for this.
And unless the FED start doing something to stabilize it's currency, it will come. Also notice that 10 years ago, the dollar was the prefered currency buy now they take dollars and Euro's.
For Europe, this could also be a good thing because as they are much more stable, they could become the next reserve currency and will bring new wealth to the union.
I can't imagine the Euro would become a reserve currency. It is still a fatally flawed currency. There's no way Ireland, Greece, and perhaps Spain and/or Portugal make it through their deficit troubles. A new global (resource-based?) currency would help both France and China (and Germany) extract themselves from BOTH the Euro and the Dollar at the same time. Kill two birds with one stone. Of course, a resource-based currency kills the Ponzi, so a fiat would be preferred by the governments.
Ask yourself this question:
Why else would the chinese buy the Greek bonds?
It's their way to say : We support the Euro and make sacrifices for it if needed.
Another question:
Why would the Chinese want a deal to build Greek ships?
Maybe to subsidize expansion of their ship building infrastructure to decrease unit costs on enlarging their navy as would be necessary for any hope of maintaining either commodity imports or exports of goods should the US attempt to shut them down?
There are many reasons for the Chinese to buy Greek bonds: imperialism, increased cooperation in order to assure access to raw materials, in order to receive an order for ships, etc.
But in the end, China needs the global Ponzi to continue at least for a little bit longer. Why NOT buy Greek bonds? They already have Euros. In some remote sense, the default risk on Greek bonds is the same as the default risk in Bunds - if Greek bonds collapse, the EU banking system collapses (the domino effect of Ireland, Portugal, etc.). Why not get 11% instead of 3%? And it all gets recycled back as ship orders (employment for a time).
I'm not exclusively Euro-bashing. Our states/muni's are in the same trouble as Greece, and our dollar arguably has the same fundamental flaws or at least others.
Next step to globalise Yuan
After bilateral swap ties with russia and Brazil, EU is the next step for bilateral currency swap deals in euro-Yuan
Doeller is being phased out.
TJ:
"I'm not exclusively Euro-bashing. Our states/muni's are in the same trouble as Greece, and our dollar arguably has the same fundamental flaws or at least others. "
this is long euro -short $ stuff....chinese are saying they will support greek basket cases but not us (states/munis)
there is definitely a northern european 'hard' currency coming.............................
Don't go all Diarrhea yet, their was talk about the EURO not making it this morning HERE.( and not by US MSM fruitcakes).
You are FAR from out of the woods, and in fact are worse shape than we are........IF that's possible as a currency.
Problem with the EURO, is it's trying to be a common currency for many nations, that used to war w/each other regularly.
All speak different lingo, and all have different interests, and most do not like a common currency to begin with,(and who can blame them!).
The USD on the other hand is, has always been American.
The Euro evolved from political union not economical...
Wrong.
Ok...care to elaborate
The European Coal and Steel Community (ECSC) was a six-nation international organisation serving to unify Western Europe during the Cold War and create the foundation for the modern-day developments of the European Union. The ECSC was the first organisation to be based on the principles of supranationalism.[2] The ECSC was first proposed by French foreign minister Robert Schuman on 9 May 1950 as a way to prevent further war between France and Germany.
He declared his aim was to 'make war not only unthinkable but materially impossible.' The means to do so, Europe's first supranational community, was formally established by the Treaty of Paris (1951), signed not only by France and West Germany, but also by Italy and the three Benelux states: Belgium, Luxembourg and the Netherlands. Between these states the ECSC would create a common market for coal and steel. The ECSC was governed by a 'High Authority', checked by bodies representing governments, MPs and an independent judiciary. The ECSC was joined by two other similar communities in 1957, with whom it shared its membership and some institutions.
In 1967 all its institutions were merged with that of the European Economic Community (EEC, which later became part of the European Union), but it retained its own independent identity. However in 2002 the Treaty of Paris expired, and with no desire to renew the treaty, all the ECSC activities and resources were absorbed by the European Community. During its existence, the ECSC had succeeded in creating a common market but could not prevent the decline of the coal and steel industries. It did however set the ground for the future European Union.
Source: http://en.wikipedia.org/wiki/European_Coal_and_Steel_Community
He is right; it was Economy not Politics.
Thanks for the intel Cheeky. I stand corrected and maybe my point should have been that the Euro could never be a viable economic solution because of the political diversity & nationalistic interests...as witnessed of late.
Good to see you posting...
fuck you, then. plus, the top of my unicorn horn busted off.
mmm...did I miss something?
cheeky why can't it be like, OOOOHHHHHHHH say last May (2010). when you were writing about your travels and arguing with others, and i was sending you my naked yoga poses pictures? why did it have to stop? it was just fun wasn't it? why don't you continue to interact with others on ZH? understand you don't really care for my kind, but you are revered here, and people secretively really really adore you and your persona. i try not to swoon all over you when you post, but why are you like this?
Thank you for making my POINT.
No way those nations will ever unite politically.Maybe for a while, times about up,now.
Germany has a gut full now..............Sarkozy is a whore, and would sell his MoMo for a Quarter.
Nationalisme means trashing other nationalities to justify your own way of living.
You just proved it.
By takeing the shit in your mouth, you just show me where the diarrhea goes into.
Nationalism?...........you bet.
I would rather be dead than be a part of a Global Cabal of PC assholes.The reason this WORLD is fucked up now, is the Political melding, and the attempts to become one Economically.
Used to be, when we had Nationalism, one nation got a recession,recovered, and life went on..now, one get's pnuemonia, and we all go into the shitter.
You call that PROGRESS.
I call it A World Clusterfoxtrot.............And we all get screwed.
Nationalism?...........you bet.
I woud rather be dead than be a part of a Global Cabal of PC assholes.
Enough with the competition between the euro and dollar. Both are exactly equally fucked down to the last gram, grain, ounce however you want to measure it.
yep.
Problem is, that if you have a common money, you must end having a common balance sheet.
In the US as well there are many languages (Spanish anybody?) and many differences among single states (see N.Dakota Vs. Ohio or California), but it all end in the (broken) federal balance.
Germany is permitting China to take a hold in Greece because nobody wants to pay for the Greek deficit (or the Irish one) but if you take the financial state of the Euro-States as a whole, the Euro-area as a whole is far sounder than... ehem... "others". In this sense the Euro is just as good as the sum of the countries adopting it. If there were a stronger political merge as well, the total could be higher than the sum of the addends (or worse, it all depends if the actual european beurocrats could possibly evolve into good politicians, which i doubt in the moment)
what's that saying about official denials. . .?
done deal, the PR guys are writting the press releases as we speak :)
There is no way the Euro ends up on top of this mess - The only thing standing when this is all said and done will be silver and gold .
" He lied like a Finance Minister on the Eve of Devaluation "
That Dollar skepticism is on the rise in the world is becoming increasingly hard to hide. Moves toward alternative swap agreements have already been formalized since the crisis between China and certain trading partners. Malaysia has proposed a gold-based currency alternative. IMF language has suggested that SDRs stand at the ready. The Dollar's days as sole reserve currency of the world are numbered.
What remains is the question: will transition to new international currency accords be orderly or chaotic? How bad will it get and how long will it drag? As these realizations grow gold will shine as the only way to assure a smooth transition through the messy in-between, the unpredictability of the currency calculus and what things will look like on the other side. No matter how badly the politicians muck it up, gold will protect wealth, savings and be welcome in return for any local paper money anywhere.
Look at the Euro, it took 15 years to finally launch the currency and after that it took another 4 to adopt it all over Europe.
Also look at England, they still refuse to do so.
So a second reserve currency will take much longuer. Maybe 20 years.
Agree.. And there'll be winners and losers too.
Don't think so..........
Get the Yuan, the Swissie,and Germany to go back to Marks......you have the NEW reserve there.
Throw in the AUD and Real and I think we would be real close to a winner, as a basket at least.
Yeah, a bunch of exporters are going to give up monetary control to a SDR committee.
Won't happen, ever.
I was thinking the parties have been in direct talks. Why would they necessarily have to go through the IMF? Hell, I would think it wise to be avoided, since it is largely US. But who knows--this is just alot of fanciful speculation.
That's a pretty artificial construct.
Switzerland have throughout history made it a point to stay neutral, whatever happens. The Germans have a lot invested in the Euro. The Chinese rely on favourably low exchange rates, and they're halfway across the world from the European nations.
Besides, you want a nation with a GDP of $315bn to provide the reserve currency? I'm sure the Swiss would be delighted, but back in the real world, it won't happen.
Yes, and Germany wants out also.WHY should they stay in a system guaranteed to ultimately bring them down.
No reason............they can do very well on their own.Who wants to pay for another countries FREE crap, and Socialism, at the expense of their own economy, and peoples suffering..........
The Brits at least had a brain.
The German people think they want out, the German political class, not so much. If they leave, the economic impact on Germany's exporting companies would be devastating, as a reintroduced Mark would explode upwards. I don't see the Euro blowing up just yet, even if it should do.
As for the Brits, not signing up has allowed us to devalue and stay alive a while longer. I can tell you though, that the average man on the street does not understand what has happened to his wallet, and is more interested in the same trivial rubbish that plagues the US. Sheep are sheep everywhere.
This is a rather general question, DS, and not specifically addressing your point above, but can you tell me why there is always this narrow, blinkered and neo-mercantilist focus on how the value of a currency does or will affect exports only, and not imports as well? I find it ludicrous if not outright insane that so many seem to feel that a currency FALLING in value is somehow a good thing, ignoring as it does what such a falling currency does to savers and investors (screws them), as well as it what it does for the prices of ALL imported goods (raises them).
In my perhaps idealistic and naive view, I would have imagined that it would be in a nation's best interests to have a STRONGER currency, not a weaker one! I mean, do we constantly try to weaken our armed forces, or strengthen them?
You make a good point.
1) An increase in the yuan will result in an immediate decline in Chinese exports to the US, nor will it result in an immediate increase in US jobs. It took 30+ years to de-industrialize the US and many product inputs are no longer made in the US.
Think of products as emerging from an "ecosystem" of sub-manufacturers and specialized producers of various inputs. It is not just a "factory" that has beed offhsored to China it is an entire industrial ecosystem. It is not coming back overnight, if ever.
2) Any increase in Chinese export prices will hurt the pocketbooks of both the Walmart crowd and Wall Street. Wall street will face a margin squeeze and the Walmart shoppers will take a hit to the pocketbook. Add in the fact that a drop in the USD will see an offsetting rise in the price of oil imports which will feed through to all US input costs and what you are looking at is a rise in US prices. Bernanke may succeed in killing nascent US deflation but will likely replace that with stagflation.
"The Brits at least had a brain"
Are you including Gordon Brown?
interesting. always remember as every currency trader does "anything can happen at any time." there are no fundamentals in the craft save for "here's your paycheck" and "here's your walking papers." in short "if i'm gettin' paid for this then that's the trade that works."
What remains is the question: will transition to new international currency accords be orderly or chaotic?
I think we know the answer to that. Legal tender laws and men with guns will try their best to make it orderly. By so doing they will make the sides labeled "Winners" and "Losers" just that much more obvious, and that's when the chaos starts.
The name of the game is to diversify out of the US dollar as covertly as possible.
Once everyone catches on to the fact that everyone is playing out the same strategy, the race to kick the dollar to the wayside will intensify.
So long as everyone thinks they are being sneaky, however, the decline will continue at a slow pace.
"A military operation involves deception. Even though you are competent, appear to be incompetent. Though effective, appear to be ineffective." - Sun Tzu, The Art of War
World governments are really nailling that one!
Almost conspicuously so.
Some time back there were rumors of Germany and Russia developing a common currency or accepting each others currency in trade, avoiding the dollar. China has already began avoiding the dollar in trades with some BRICs and other trading partners.
Anyone heard more on this?
Let's also not forget that the Middle east countries are also trying to launch their E-Dinar currency. The only problem for them is that they are valueing that currency way to high and are linking it to much to the Koran.
https://www.e-dinar.com/html/1_2.html
Finally something which is useful from ZH.
You are absolutely right on the alternative to the dollar. It has been in the making for over 7years now. Trust me on this as I know a few details with folks at BIS. Dollar is being taken out of the picture and the currency to replace it is the EURO. The plan is already in place with BIS fully supportive of this grand occasion. It will be a similar event to the Gold re pricing in 1935/40 and will be in response to forex imbalances. The plan is to keep China happy while brining euro in global circulation and the resultant EURO will eliminate forex imbalances while helping China to gain excess to the massive EU market.. I cannot give all the details of the plan but the phase out is coming and only 1% of folks will make money on this move, and Gold bugs will not be in the 1% as they will be waiting for the end of fiat system which will never happen.
The biggest loser in the whole transaction will be the American middle class, courtesy FED policy.
Akak, can you please correct all the grammatical errors in the above comment so that you can read it and probably spruce it with your grand posts concerning how currencies will race to bottom.
What the BIS may be "planning" and what actually comes to pass, will be very different things. The whole fiat system is moribund and the BIS attempting to switch one corpse for another isn't going to miraculously resurrect the fiat system.
So true. Take the Euro again for example. Before the Euro, they tried to launch the Ecu.
http://en.wikipedia.org/wiki/European_Currency_Unit
And also something fun to know:
The Ecu used to be a French currency in the 15th and 16th century backed by gold and silver.
Wrong. They didn't try and launch the Ecu. In layman' s terms the Ecu could be likened to the SDR, as you say an accounting unit. Its not like there were a bunch of unwanted Ecu notes printed.
They made a lot of Ecu coins that had a printed Ecu value and the value of the currency of country.
This was a attempt to use a single currency and keep the local currencies. they failled bigtime.
But with a Ecu, you could pay in all the countries in Europe. In theory, because nobody wanted them.
AND they where all made out of gold or silver.
Wrong (or better, some coins might have been produced, but they never circulated).
ECU was a basket of single european currencies, the composition of which could vary according to certain parameters such as the %age of a given country's GDP in relation to the total GDP of the EEC-Zone. The ECU was used for reference for all the european States to link their currency to it (it was then called the "european monetary snake") Every State agreed on keeping the fluctuation of it's own currency on a pre-determined band around the nominal value of ECU expressed in its own currency. This was a sort of "training for the EURO-to-be and it fed some of the harschest speculations against moneys in the end of the '80ies, beginning of the '90ies (see the "attack on Lira" in '92 IIRC, charged on Soros).
ZH always has useful things. It's you and me "going off the handle" that "cause distress among the Team." And to think I once had a girlfriend named Marla.
How does the Euro stay intact with problems such as the PIIGS? I see the Chinese are trying to keep their export market intact and garner political influence in the "debate" over the Yuan by buying Euro toxic debt but I see no fix as austerity bites and the revolts get bigger.
I'll keep my gold.
Agreed. As the real crisis gets nearer and nearer expect the desinformatsia campaign to go into hyperactive.
How can the Dollar stay intact with such problems as the continuous printing and the balance sheets of most of the States of the Union?
And replace the one confidence game with another?
IF this hapens, GOLD and PM's will SKYROCKET.
Out of fear.
I don't understand why you got junked. The Euro, for all of its problems, has gold as a percentage of its reserve. The EU can easily join with gold rich China and replace the dollar with the Renminbi as a reserve for the Euro. Since they trade with China more than with the US, it would be painless (for them) to announce that they are replacing the dollar with the Reniminbi and the Chinese announce that they are backing their currency with gold. Add to that the vast Chinese oil contracts in Iraq and Afghanistan, raw material contracts with African countries and the indirect buying of Greek ports and shipyards, it makes perfect sense. The Europeans get to continue the Ponzie scheme and become the new consumers for Chinese crap, backed by Chinese currency and the US is the man out once the music stops.
What does the ECB do with its gold position quarterly?
And why do you presume that the Chinese and the emerging bloc will be so easily bought off with a bloc that is easily 2x worse off demographically, perhaps more, if you engage Russia? The IMF jockeying about board votes and the American veto are all about trying to defend the incumbant structure with its implicit veto. The US strategy of re-entering Asia - note the recent rhetoric re the disputed islands in the South/east China sea via the State Department (and Vietnam/South Korea embrace) - is as much about currency as it is about controlling shipping lanes. Why do you presume that one Axel Weber is so eager to prolong the ponzi in lieu of an ABS solution perhaps via China/Russia. The Europeans are a decade ahead of the US with 1/2 the resources and 1/6 of the military (that size not effectiveness). Sounds like solid credentials for a clearing house notwithstanding the long standing BIS affection with gold. Read a little about the creation of the Euro and Duisenberg. You might surprise yourself. In the meantime take your pedantic professorial acadamia back to the ivory circle jerk.
http://en.wikipedia.org/wiki/Wim_Duisenberg
(Aside: the plaza accord was an epic fail for the Yen and may actually have been the final nail in the coffin putting aside the few extra innings earned)
China will peg its Yuan to gold. Thats why citizens of China have been encouraged to "get some" . No links, just my intuition and a little bit of reason
>the currency to replace it is the EURO.
LOL, how is that better? Thanks, but no thanks!
Besides I don't believe this Euro stuff at all. Does anyone think that the likes of China, Russia and others (such as the USA and Japan) would support such arrangement?
Why doesn't the BIS issue a proxy currency? It would seem rather logical, it would allow the BIS to centralize its role in the world economy and something that has been mentioned by Jaime Caruana.
interesting.
"Why doesn't the BIS issue a proxy currency? "
BINGO!
So the Central Banks can Fractional Reserve Ponzi up to the next level!
Hey Ben... Your balance sheet is maxed out. No problem.
The BIS is here to help you out! Let the BLS just create some money for you Ben to keep the Fed going ad infinitum!
So what if all those BIS gold swaps were not physical gold?
Just paper transactions? Then by LBMA fractional reserve selling of physical gold standards... the BIS has tons more phony gold to suppress the market with...
Do you trust the BIS anymore than the Fed?
If the BIS floated a fiat or claimed it was backed with some gold (phony gold)... do you think it would be any different than Bennie Bernank-ster or more of the same but exponentially ponzi-er?
I think Akrunner is right... All CB's are bust and it will be masked by ponzi-ing up to the next level... BIS.
Dollar denominated debt bitchez. The thurst for dollars continues unabaded ...
and this is a "toe in the water" move. Plenty of dollars floating out there with nowhere to go but low yield US t-bills. They can issue new debt, at much attractive yields, giving the dollar a place to go. Eventually the dollar defaults and all those debts either get converted to a different currency, or paid in hyper-inflated dollars.
one word: default
At this point, going long dollar-denominated debt is really just shorting the dollar, isn't it?
Gee, is there a pair trade that comes to mind here?
I wonder how much time this will buy us?
Maybe, but just maybe, they are all feeling that the USD is coming nearer to the tipping point where a Weimar-like inflationary burst will materialize?
In this case all these debts denominated in USD will be very easy to redeem at nearly no cost... just a thought
Great post. The dollar amounts are suprisingly small, aren't they? Needless to say "some of the interest rates are of staggeringly high yield." As I've said many times "that Death Star is fully operational." We shall see what the blowback from our invasion of Pakistan is. They are the only country in the world to have welcomed those that have killed our citizens en masse. Needless to say "God has responded."
That's odd, as there are so many Paki's here.
O Man, Pakistan is one shit h@#. The country should be completely banned and isolated from outside contact what with every Paki in the world being a potential bomb. In fact hats off to the French and Dutch with going ahead with the burqa ban. Will be even greater if we can have full paki ban so that all pakis are fully closed in Pakistan and pose no danger to the world.
Frisbee, you forgot to put commas between "outside contact" and "what with", and between "In fact" and "hats off". You also used only two placeholder symbols in "shit h@#" instead of three, and have a missing subject in the last sentence.
Just trying to be of help.
i hate you guys
The only citizens that "they" have killed are those who have invaded their part of the world under false pretenses.
Those who have killed US citizens en masse are actually other US citizens.
Is that what you are talking about--or are you talking about the ensuing invasion of Afghanistan with the occasional killings of Pakistanis?
Either way-thats a whole lot of killing and for some reason, God is letting it all pass....
So dolittle, please clarify yourself.
China-Russia and Europe - coming together (?)
China supports the euro (since they know that the dollar is hyperinflating and the euro is not hyperinflating, not at the "same pace" anyway)
Europe supports China - this is from a month ago:
"Lagarde says French G20 to discuss wider use of SDR"
http://www.xe.com/news/2010-09-01%2014:06:00.0/1368345.htm
China and Russia want the SDR as a -temporary maybe?- replacement of the dollar. Europe helps them out
Sorry for my bad English by the way, i am Greek and i am also in a hurry
China's protectionism has begun to bloom. If China had never been messing with the dollar exchange rate in the first place, everyone would not be scrambling to counter the effects of their changes now.
"A blast from the past":
http://video.google.com/videoplay?docid=5064665078176641728&hl=en#
It's a long video (54 min), but well worth it. Sir James Goldsmith discussing GATT (and...derivatives!) with Charlie Rose back in 1994.
It's better than 99% (if not all) of all todays "analysts"...
I want a global currency that I could use along with my current one and pay with it everywhere. It should be solely electronic, only for human use (no treasuries, corporations, lawyer admin accounts), inflation-less, speculation-less. No debt could be incurred in it, no taxes would be paid on transactions. We already have an infrastructure built for it, because sending money is a lot like sending data.
Corporations killed nation states. OK we get it, they deserve to go bankrupt. Just don't let us, people become eternal debt slaves like they are. You should get right to live for being a Human and the only way you can enforce this right lately is through spending money. I respect the social order but we should get rid of some of the artificial inefficiency causing cancer and pay more attention to developing the Earth so we cater for the bottom 80%. There is more of us so it is the democratic way.
China and Russia will soon settle the trades between them using either Yuan or Rubble starting in 4th quarter. That means the role played by dollars in trade between China and Russia is now defunct.
I guess China wants to enter the same settlement agreement with Euro similar to that agreement reached with Russia and many other countries, i.e., Europe exporters will be paid in Yuan,while Chinese exporters will be paid in Euros, which will then be settled by central banks of China and Europe to swap the currency.
Dollar used to be used as a main trade currency. The dilemma faced by Benover is that: He is powerless in printing any currency other than dollars. If exporters to the USA won't accept dollar as payment and other central bank won't accept dollar as swap, then Game over.
>Europe exporters will be paid in Yuan,while Chinese exporters will be paid in Euros, which will then be settled by central banks of China and Europe to swap the currency.
In the meantime what is China supposed to do with their dollar-denominated US T-bills? Sit on them till they become worthless?
While I am with you helping the poor, you can keep your Democracy, here we call it what is it, Mobocracy.
Our system is now screwed because of certain people..........we hope to eliminate that problem one way or another.
Nothing personal towards you brother.......(>;
Sep 23 2010
Qatar Islamic Bank SAQ plans to sell its first dollar sukuk and will start meeting investors in the Middle East, Asia and Europe from tomorrow, according to a statement from the Gulf state’s biggest Shariah-compliant lender.
“The sukuk is expected to be launched, subject to market conditions” and Credit Suisse Group AG, HSBC Holdings Plc and Qatari investment bank QInvest have been hired to manage the issuance, said the statement posted on the Qatar Exchange website today. Chief Executive Officer Salah Mohammed Jaidah said on May 19 the company may issue up to $750 million of the notes that comply with the religion’s ban on interest.
Sales of Islamic bonds are picking up in the Persian Gulf after Dubai World reached an agreement with 99 percent of its creditors this month to change terms on $24.9 billion of debt. Banks and companies in the Middle East may sell $5.5 billion of sukuk in the fourth quarter, the most since the three months ended September 2007, according to data compiled by Bloomberg.
“There will be huge support” for the debt, Hang Tuah Amin Tajudin, assistant vice president at OCBC Bank Malaysia Bhd.’s Global Treasury Division, said in an interview from Kuala Lumpur today. “Market sentiment has improved and the restructuring in the Gulf region will help create more certainty.”
One the one hand I am sympathetic to the reasons why the dollar should get flushed. However, next time France and Germany decide to go at each other, I hope the Chinese will do a good job cleaning up the mess.
Unlikely, since they'll be fighting the Japanese again
Do these idiotic fucking Euros think they're gonna LIKE what the hell they get from China? China is a WANTON currency printer, they will buy the euro to the moon to cannibalize all of Europe's heavy industry. There is no way that the protectionism of the EU and the protectionism of China can be reconciled.
Trade with China only works so long as the CCP permits you to export to them. Once they've stolen your IP and start counterfeiting your products, they will slam the door. The EU will NEVER get yuan appreciation against the Euro. China is not in the business of appreciating their currency to normalize trade flows.
"China is a WANTON currency printer,"
WANTON or WONTON?
Can I get the sweet and sour sauce with that?
Hey, so you can eat Yuan! I'm selling my gold for Yuan right now!
It is remarkable that EU is going for it, isn't it? I noted with interest how patents had been on an upsurge in China. I am thinking that turnabout is fair play.
http://www.economist.com/node/17151211
France or Sarko got what he wanted and the most that will ever come out of this story...............a Headline in the paper. He needs to be the man with G20 coming up and and still hates the fact that the Eurozone doesn't do more to manipulate the Euro to suit select memebers. There will be total politcial union in Europe before it ever hits reserve currency status. I would buy the german currency if it ever comes back, fiat or not, those guys would keep it in check.
The USD project is over ;-)...California first state to leave (kicked-out?)
Remember May 2010? The "Euro is dead" argument was the fad of the day than...now its time for the USD? Its pathetic....everyone is getting DP:ed. USD is gong to be there as a reseve currency for the foreseable eternity together with the EUR and RMB and Yen and....
France or Sarko got what he wanted and the most that will ever come out of this story...............a Headline in the paper. He needs to be the man with G20 coming up and and still hates the fact that the Eurozone doesn't do more to manipulate the Euro to suit select memebers. There will be total politcial union in Europe before it ever hits reserve currency status. I would buy the german currency if it ever comes back, fiat or not, those guys would keep it in check.
@twotraps: Euro allready a reserve currency!
The train left the station years ago...you are late
I am asking the Fed if I can rub my USD's on Bernake's baldy head for luck...
How about getting some knowledgable guy to write an article for ZH on what it would take to change the reserve currency from USD to something else? For this purpose it would not be appropriate to get bogged down as to what the replacement would be, but more importantly, keep the focus on how it could be done?
I mean getting answers to some of the real obvious questions like:
- how long would it take?
- what would be the mechanism?
- what social changes would take place?
- and of course, what affect it would have on Amerika.
If you folks know of something like this already in print, I would appreciate it if you could let me know.
The U.S. is what France wanted to become - a superpower. So it is no surprise the French grasp at every opportunity to increase their status as "almost a world leader". Sarkozy, especially, is so insecure he'll be negotiating with Raoul Castro and Hugo Chavez next. http://images.huffingtonpost.com/gen/75986/original.jpg
Yes, the dollar is dead, but so is the euro.
The US were duped by the multinationals.
It was "globalisation" which resulted in a labour switch to China, but China were clever enough to maintain a fixed currency to the US. They ignore patent laws and have since climbed up the supply chain.
The US shouldn't allow their ear to be bent so easily by the multinationals. They have no interest in "the good olde USA." Their only interest is profit.
The US (and Europe) will continue their demise against China until their politicians realise that they must do what is in the best interest of their Nations, not their listed companies.
And the biggest stick that the multinationals continue to use against the sovereigns is that they will continue to threaten to re-domicile and thus withdraw a nation's tax base.
Stop "Globalisation" and you will save your precious US.
There is no way to stop the process thru legislation, save abolishing the corporate "person" all together.
When 51 ouf of the top 100 largest and most powerful economic units on earth are corporations, and these corporations have the same rights as natural persons, then the aggregated power of these institutions will remain all pervasive. Economies will ALWAYS morph into monopolies controlled from the top down.
Sitting atop this foodchain will ALWAYS be banks because, having the power to create credit with the flick of a pen, it will they who wield the most influence, and they who profit most at the expense of the taxpayers.
Corporations, if they are to exist at all, should have charters which limit them. The process of the relocalization of society must begin there.
Memo: Do not believe a midget in politics - Sarkozy. He is vile and a coward.
Sarko is an uber Zionist. Israel knows it's future lies with China. Once the US is a dead husk, the Zionist will finally show they have no allegiance except to themselves.
I am junking you for your posting of junk (and name calling).
>the (whoever) will finally show they have no allegiance except to themselves.
Who is supposed to have allegiance to anyone but himself/herself?
WARNING: THE BULLION BANKS ARE LOSING CONTROL OF SILVER & GOLD!!!
http://www.youtube.com/watch?v=iPvBQ1qscpg&feature=player_embedded#!
Here's an opinion: China needs the dollar to remain the world's reserve currency for the foreseeable future, and every action they are taking supports this.
The US still represents 175% of China's trade surplus. An economy still wedded more than any other major nation to export-led growth cannot yet afford to kill the goose laying the golden egg.
China has been the driving force behind the yen's rise for the past year, and (Tyler can do this) calling any major bank FX trading desk will corroborate that fact. China is bidding for size every time the BOJ tries to intervene.
China's move to shore up the euro via its "vote of confidence in Greek bonds" is not quite that. Yes, that (former) Yugoslavian market is so terribly inviting that the Chinese are licking their chops at the prospect of taking over the striking dockworkers at Pireus, but the larger goal is to prevent the immediate collapse of the eurozone, and with it the euro. (Sorry, Leo, the Chinese couldn't care less if the Greeks cease to exist so long as their demise does not take down the euro.)
Why all this? Because driving up the yen and euro makes it easier for the Chinese to acquiesce to Geithner and Congress' "demands" that they let the yuan rise, while still keeping their major export market intact.
China runs a trade deficit with Germany and Japan. Is this because those two countries are just so much better at marketing than the US? Or is it because they can more easily peg to a weaker currency and they get to reverse engineer whatever they buy from those two nations. Note that as part of the quid pro quo for letting the yuan go, China has asked the US to relax restrictions of high tech exports. That is their underlying motivation.
China does not play by WTO rules now, and has no intention of doing so in the future. The CP wants to survive, and they have determined that their survival depends on keeping their 1.3 billion person non-voting constituency happy, which means employed.
Some might argue that China gets an advantage in commodity purchases by having a strong currency. This is true, but it is meaningless if it means they lose their major market. That kind of dislocation would give them employment problems.
Instead of a strong currency, China has tried to gain the commodity advantage by securing long term mining rights in places where the leaders are easily bought, or in the case of Australia, where a housing bubble needs a constant supply of fuel.
Regarding talk that China will create a gold-backed reserve currency, the US has about four times the gold of China, and despite constant claims on this site that average Chinese are loading up on gold, this is simply not the case. Loading up on property, BMW's, real and knock-off designer clothes, Tiffany Blue Boxes, Piaget watches, real and counterfeit French wines...yes.
Opinion finished.
i really r e a l llllllllly really hate you.
Then punch your computer.
http://www.youtube.com/watch?v=ztfk8dq9gMA
.
China isn't loading up on gold because they know it would stampede the markets and they'd have to pay much, much more for it. Alternatively, they are smartly buying up foreign gold mines instead. Mainland China is already the worlds #1 gold producer and they're keeping it all.
Moreover, their people are not "hoarding" gold but were recently and publicly encouraged by the government to start buying gold as an optional (currency) savings method. The Chinese already have a high savings rate of about 30%. If just 1 of 3 Chinese buys 5 grams of gold per year jewelry, China would suddenly be the largest consumer of gold on the planet and that would greatly move the market as well (increasing the value of their gold mines, etc). All of this puts immense pressure on Western fiat currrencies.
The Chinese also pulled their reserve buillon from the LBMA in the last 12 months and established their own Ft Knox type facility for Asian gold storage in Hong Kong, and an Asian buillon market to rival the LBMA. While they have low gold reserve tonnage, they are putting all the pieces in place and it's clear to see where this is all going.
China is a big net creditor nation so they're not the ones in immediate need of having gold on hand for collateral. They don't need gold, they already own ours.
+1.
I'm not sure what you mean by that.
Right: Greece used to trade with Yugoslavia but countries like Germany were (and are) more significant than former Yugoslavia's exports to Greece. Right now I can't find historic stats to prove my point but I guess (former) Yugoslavia wasn't among their top three EXIM partners. And in 2009 Germany and Italy were top sources of Greek imports.
Germany 13.73%, Italy 12.71%, China 7.08%, France 6.1%, Netherlands 6.02%, South Korea 5.68%, Belgium 4.34%, Spain 4.08% (top exporters to Greece in 2009)
Wrong: Greece wasn't a market within (former) Yugoslavia.
"the US has about four times the gold of China"
If this were true the US would not balk at allowing an inventory of US gold. Not only do we not know if we have any gold but we don't know if we have any unencumbered gold.
"despite constant claims on this site that average Chinese are loading up on gold, this is simply not the case"
I see no link to back this claim.
"quid pro quo for letting the yuan go"
China will never 'let the yuan go' because they have seen the devastation to countries that have taken this step. US bankers/hedgies would sweep in with trillions of fiat dollars and destroy the Chinese economy. The US in not pushing China to revalue the Yuan for the sake of American consumers, but for the sake of fraudsters that would profit immensely from such a foolish move by Chinese leadership.
"The US still represents 175% of China's trade surplus."
I don't know where you got the 175%.
Here is a list of China's largest trading partners as of 2008 from Wiki: http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_People%27s_Republic_of_China
United States 333.74 81.36 252.38 Japan 266.73 150.60 116.13 Hong Kong 203.64 12.92 190.73 South Korea 186.07 112.14 73.93 Taiwan 129.21 103.34 25.88 Germany 115.00 55.79 59.21 Australia 59.68 37.44 22.25 Russia 56.91 23.83 33.08 Malaysia 53.56 32.10 21.46 Singapore 52.48 20.17 32.31 United States 333.74 81.36 252.38 Japan 266.73 150.60 116.13 Hong Kong 203.64 12.92 190.73 South Korea 186.07 112.14 73.93 Taiwan 129.21 103.34 25.88 Germany 115.00 55.79 59.21 Australia 59.68 37.44 22.25 Russia 56.91 23.83 33.08 Malaysia 53.56 32.10 21.46 Singapore 52.48 20.17 32.31 United States 333.74 81.36 252.38 Japan 266.73 150.60 116.13 Hong Kong 203.64 12.92 190.73 South Korea 186.07 112.14 73.93 Taiwan 129.21 103.34 25.88 Germany 115.00 55.79 59.21 Australia 59.68 37.44 22.25 Russia 56.91 23.83 33.08 Malaysia 53.56 32.10 21.46 Singapore 52.48 20.17 32.31 United States 333.74 81.36 252.38 Japan 266.73 150.60 116.13 Hong Kong 203.64 12.92 190.73 South Korea 186.07 112.14 73.93 Taiwan 129.21 103.34 25.88 Germany 115.00 55.79 59.21 Australia 59.68 37.44 22.25 Russia 56.91 23.83 33.08 Malaysia 53.56 32.10 21.46 Singapore 52.48 20.17 32.31 United States 333.74 81.36 252.38 Japan 266.73 150.60 116.13 Hong Kong 203.64 12.92 190.73 South Korea 186.07 112.14 73.93 Taiwan 129.21 103.34 25.88 Germany 115.00 55.79 59.21 Australia 59.68 37.44 22.25 Russia 56.91 23.83 33.08 Malaysia 53.56 32.10 21.46 Singapore 52.48 20.17I have no doubt China is moving to establish alternative international trade currencies. SDR's aren't going to cut it forever.
Jim Rickards said if Russia and China agreed to collude to form a reserve currencey backed by gold it would be a done deal and game over for the dollar very quickly.
But France? What, backed by bottles of wine?
You are correct and so is Jim Rickards.
Why is the SCO never mentioned in these discussions?
Wiki link to SCO: http://en.wikipedia.org/wiki/Shanghai_Cooperation_Organisation
And if that should come to pass, you can be DAMNED sure that the holding of gold by Americans will be considered "dangerous to national economic security", and illegalized under the "Trading with the Enemy" concept and executive orders.
Updated GOLD monthly chart:
http://stockmarket618.wordpress.com
Adding to my comment above, while I cannot prove it, I would guess that even at the current exchange rate, most purely Chinese companies do not make a profit from ongoing operations. From sidelines in RE speculation, perhaps, but from their core business, I doubt many do. I doubt any SOE's do. China's purely Chinese controlled export machine is still largely in the t-shirt and carnival prize stage. Foreign firms manufacturing or tightly controlling their sourcing, on the other hand, are more likely to turn a profit on what they do there, as high margin firms like Apple are so good at doing.
Given this (possible) reality, China needs its ongoing surplus with the US in order to provide the funding for the continued expansion of its RE bubble. This is quite similar to what Japan did back in the 80's; firms didn't make money exporting widgets, but rather speculating in domestic RE, golf courses, etc.
chindit13 - Thanks for the insights. I always learn from your posts.
I wonder if Chinese golf is pegged to US golf: 1 US stroke = 6.6895 Chinese strokes.
s t r o k e play, bitchez
@gwar5
"China is a big net creditor nation so they're not the ones in immediate need of having gold on hand for collateral. They don't need gold, they already own ours."
Nail. Head. Hit.