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Asian tigers roar back at US Dollar
Asian tigers roar back at US Dollar
by Project Mayhem
Overnight, we have learned that multiple Asian central banks intervened to prevent rapid appreciation of their own currencies against the US Dollar. Could we be witnessing the beginning of a currency crisis, or is this simply more water under the bridge?
Igor Panarin, the cagey Russian , who predicts dollar fail in November 2009
There has been minimal talk in the mainstream media regarding the latest problems in the US Dollar. Earlier this week, there was the Robert Fisk article, which was accompanied by strong denials by various governments around the world, despite the rapid price appreciation of gold over a matter of days. My latest discussions with my sources indicate gold may actually be in stealth backwardation, which would help explain the intensity of the moves, even in the absense of formal statistical backwardation. Regardless, the question remains, what is going on? Who are we to believe? What is happening in the global financial system?
Hungry for exports!
The UN repeated their calls once again this week for a new world currency to replace the US Dollar. Sources close to the G20 indicate that the IMF was annointed global central bank during this meeting, with the IMF SDR as the mechanism by which a global currency will be introduced. Overnight , we witnessed intervention by multiple Asian Tigers to prevent appreciation of their own currencies against the US Dollar. Could this be the beginning of larger currency problems? Or is this simply a head-fake prior to a collapse in US equities, where hot money is chased back into bonds and cash, causing rapid appreciation of the maligned global reserve currency?
It is impossible to tell. No one can predict the future -- unless you control it. However, we do know plans may have been on the table for some time to remove the pillars of support from under the United States. The writing is on the wall. Foreign creditors grow weary of the stewardship by an incredibly corrupt group of white collar criminals which occupy tall office buildings on Wall St. Russian FSB strategist Igor Panarin has claimed foreign revolt against the United States would occur as soon as November 2009. Panarin claimed this would start with serious problems in the US Dollar and insolvent banking system. Jim Sinclair has claimed a currency event is coming by the end of October 2009. The web bots, although notoriously inaccurate, have indicated similar events on the horizon centered around October 25th 2009.
Overnight, we witnessed intervention by various Asian central banks to suppress their own currencies against the Dollar. The banks of South Korea, Taiwan, the Philippines and Thailand all intervened to prevent appreciation of their currencies. The Bank of Korea bought $1billion. The Bank of Indonesia bought $350 million. The Phillipines' central bank bought $100 million. The Hong Kong monetary authority sold $3.88 billion Hong Kong Dollars to support its dollar-peg. The Yen is at 88.24, but there was no intervention by the BOJ, at least none that we could confirm.
These are serious moves. Why is this not front page news? It is difficult to tell whether these are simply more dramatic fluctations on the world markets, or the start of a new phase in the crisis. What will be imperative is to pay close attention to the actions of global central banks in the days ahead. Currency is key. The next four weeks should be quite interesting indeed.
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93649
+100
I think that China's actions in recent months show that China has already prepared itself well enough to be more vocal about the obvious need to move away from the very diluted USD. I see allot of posts about how China wouldn't want to cause a USD crisis because China would be hurt, that their reserves would be worth less. I ask what good are reserves if you can't effectively spend? China tried unsucessfully to start to diversify their reserves and purchase some US companies and properties in 2005-2006. The Chinese offshore oil producer CNOOC tried to buy Unical unsucessfully and said that the US political influence in the deal was "Calling U.S. political opposition "unprecedented," CNOOC termed it "regrettable and unjustified."-www.businessweek.com-aug2005. They were snubbed several times and then they started to buy up commodity producers, port investments and industrial capacity in other countries. Recently they have stepped up measures by creating currency swaps, sellign yuan denominated bonds, encouraging domestic gold and silver investments, and instituting stop-loss on OTC derivateves
The Chinese felt slighted, not very respectfull behavior when dealing with your largest creditor. Now we will learn some difficult economic lessons, Sun Tzu style.
I am 100 percent into charmin ultra soft you will be beggin me for a soft wipe!
RE: #93671
If you had three or four million US dollars like I do, wtf would you do with them?
I can't tell you what to do with them, but I can tell you what not to do with them ... put them all in one basket.
25% US Currency
25% Foreign Currency (25% European, 25% Russian, 25% Middle Eastern, 25% Asian)
25% Equities (50% US, 50% Foreign)
25% Hard Assets (40% Silver, 40% Gold, 20% PGMs)
My monthly indicator for the USD is still giving bullish warnings.
Will the USD rally when DOW bear market rally ends ?
VIX index also continues to give bullish warnings (bearish for stocks)
I warned of an impending stockmarket crash back in early *2007*
www.zerohedge.com/forum/market-outlook-0
#93419:interesting that you mentioned rumors here and there about raising interest. Here is the big guy himself spreading that rumor(lol)http://www.bloomberg.com/apps/news?pid=20601087&sid=aB7MNBaU3bxk
But in a couple of days the traders would want a proof.
Sooooo. After lurking on this site for the last four months and getting a first class education thanks to all of you, I'm still confused.
If you had three or four million US dollars like I do, wtf would you do with them?
This is serious shit. Stop talking the issues around in circles and make a specific call.
"We dance round in a circle and suppose, but the secret sits in the middle and knows."
Right or wrong, tell me what you think the secret is.
If I had 3-4 million, I'd put about 50% into physical gold bullion, 25% into euros, and 25% into dollars.
I made a specific call about a month ago for gold at $1200 by the end of a year. It's hard to say where the dollar goes , but gold is definitely going much higher intermediate-term (18month timeframe )
Thanks PM (and Anon below) for your thoughts.
I've bought physical bullion for the past ten years,
always anonymously, and I'm just now beginning to see
the beauty of an asset that produces no income.
Not only can the authorities not find my gold, they can't tax it away from me either.
As Will Rogers said, I am now more concerned with the
return OF my money than with the return ON my money.
Worker Drones need you Project Mayhem. Please keep
enlightening us with your wisdom.
It seems Cramer read your article PM... His guest shows an interesting chart debunking a "jobless recovery" too, They actually acknowledge U6 as "Real Unemployment"...
What no pom pom's Cramer?
I believe that the dollar will be force into a strength position by the end of the year. I doubt the EUR/USD will break the high of 1.55. At that level Europe will be forced into a recession. Not only that but the Europe recovery is much weaker than they want to admit and a Baltic country collapse will trigger a need to devalue the EUR. With China, Japan, and Europe all jumping to devalue their currencies, I see only upward pressure on the USD. Of course this will also bring a crash in equities and gold prices, though with gold I think China will put in a floor (by buying lots at this price) around $850.
IMO, the FED and China are conspiring to collapse the worlds financial markets. Don't be distracted by the China bluff on US dollar devaluation or reserve currency status. This article just confirms that further. Look at how they have them scrambling for more dollars.
"This is the age for a new stage of fiend
Watch how the junkies scream for their crack..."
De LA Soul "Say no go"
MSM motto of lies - Distract , detract , divide , detain, disabilitate .
Kill Mr. HOpe, and the dollar dies (never to resurrect). Then Key Master Gates (of Hell), illuminates the path with napalm. We're DOA anyway, so WTF?
I would think that it shouldn't be too hard for "them" to knock gold and silver from here for a day or two. A rumour here or there that US interest rates could go up a tad or something similar to prove that the dollar is sound and well managed would flush out a bunch of the new buyers if the market dropped under $ 1,000. I am hoping that will be the launch pad for silver - December delivery on both gold and silver should be interesting.
The only thing worse for banks than deflation is hyperinflation. No one would do business with the US. It's self-defeating for the FED to destroy the currency totally. BUT, it's a thead-the-needle act. Bernanke and his big fat ego could lose control of either situation and create another deleveraging event disaster or a currency crisis. The DXY WAS 72 at it's lows-we are not near that and we have been at 76 before.
I think Bernanke knows that deflation is the real issue here-with loss of so much private credit we can't as a government come even close to blowing up money supply like the credit system did. Stimulus is a waste obviously. It has done jack shit for the consumer. Unless you have a control economy CB, the private dirtbags at Goldman and JP just take that stimulus and try to recapitalize on the fly at the craps tables. Conversely, public stimulus just goes to plug up holes in the books and to keep paying overpaid Union employees ridiculous salaries and benefits.
Is the Fed going to end this?
http://www.ny.frb.org/markets/mbs/index.html
No? The forget about any talk of them "saving" the USD. How can you save something and then print $20B a week? Not gonna happen.
Death of Petro-Dollar, Told Ya So
http://financialsense.com/fsu/editorials/willie/2009/1008.html
My long term target is a big fat ZERO, but we shall see.
Soon Peter Schiff can put a notch on his belt for his call on decoupling.
The Fed will continue doing everything in its power to kill the dollar. While it is possible to park assets on Fed balance sheets indefinitely, the US economy must increase exports to utilize its 10-15% industrial overcapacity, and they need the comparative advantage of a cheap dollar to realize that goal. If the Fed fails in its attempt to kill the dollar, there will likely be no recovery.
Many of you read the CBO reports, and are aware military spending is increasing. Washington will tell you it's because of the troop levels in Afghanistan, blah blah blah. But can you imagine the slack in the economy if the United States wasn't at war? And how about all those brave troops returning to the States? The current economy cannot even accommodate the existing labor pool. This country needs to gear up, and regardless of whether we build bulldozers and cranes or tanks and bombs, Washington HAS to make that happen.
it appears you actually believe the propaganda delivered by the state. I suggest you read the WSJ srticle because it refutes some of the exact assumptions you believe.
"But can you imagine the slack in the economy if the United States wasn't at war? And how about all those brave troops returning to the States? The current economy cannot accommodate the existing labor pool. "
At least the soldiers would be re-investing/spending the money within our borders, and paying sales tax here. And that's on top of us not spending excess money on energy/supplies/caskets. Also, a lot of contracters that work there get incentives like tax-free salaries. An acquaintance of mine who is a Satellite engineer went to work in Bagdad's green-zone for: ($120,000 + $80,000tax free)/year.
I'm afraid that in the short term, history does not agree.
http://www.whitehouse.gov/omb/budget/Historicals/
Total US Receipts in constant (2000) dollars (billion)
1974 $857
1975 $824
1976 $818
1946 $366
1947 $331
1948 $326
1953 $508 (Korean Conflict ended in July, 1953)
1954 $494
1955 $449
"gold may actually be in stealth backwardation"
I'm not really sure this is the case yet, when backwardation really occured last year, even before prices really rose, you could hardly find any gold to buy anywhere, and if you did, the premiums were huge. Right now, US mint aside, you can easily buy it, especially if you look at sites like apmex, where you can get it in more forms than ever and the premiums go as low as the 20's instead of over 60 that we were seeing on the same site last year.
I think what is really happening is more that the people that already have it are unwilling to let go at lower prices vs. there really being a huge increase in demand. Basically those that are already in the inflation camp are only having their beliefs strengthened, while there's not as many new recruits as there were last year.
The stealth backwardation I have been informed of is in the LBMA good-delivery market (1000oz bars), not in coins. But I suspect that if it is real rather than rumors, it will eventually creep into the futures markets and retail markets once again. I think we'll have a clearer picture of what's going on within a few weeks.
Ah yes, you are correct , I meant 400oz LBMA bar. I am a silver bug myself so sometimes I get confused. I am just going by what Rob Kirby told me, which was that multiple individuals were offered up to 25% cash premium to settle gold contracts in cash , rather than physical metal -- which implies stealth backwardation. I think we're just going to have to wait and see what happens with this, to see whether these are isolated cases , or whether they represent something systemic. If gold continues rising during equity declines, I think this will help confirm a serious breakout.
If that's the case then there might be more clout to it this time than last. From what I remember last time it was easier to buy larger quantities than smaller, so it meant it was the smaller investors being bullish, vs larger, now it's the opposite, hence possibly smarter money... As you said, this uncertainty won't be long lived, we'll see how it all unfurles in a few weeks,
And yet, companies like "Cash for Gold" appear to be doing well. Who are these chumps that are selling their jewelry 1/10 below spot of bullion??
Its the chumps who think gold has topped, the chumps who also take payday loans for 20%, and the people doing anything they can to stay afloat.
"There's a sucker born every minute" is just as true today as it was then.
"we do know plans may have been on the table for some time to remove the pillars of support from under the United States"
What major world economy can survive a disorderly collapse of the USD? I don't buy it.
All the same, the dollar really tanked today. Wonder if it would have been worse without the Asian CB interventions?
It's not front page news because people like GS and JPM need to bulltrap the suckers in a parabolic rise of gold,oil and commodities before the FED has to jump in and stabilize the US Dollar. The Bond Vigilantes are getting hacked off at the dollar devaluation. So, if you know what the USG and IMF are going to do, and can frontrun it-what would you do? International currency sounds even worse than the greenback.
I smell bulltrap, too. Just a hunch, not trading it, no portfolio changes. Still long and holding for the long term.
Why is this not front page news?
Indeed. Thanks P. Mayhem!
I can tell you why this is not front page news.
News management by the master of all, supreme leader and caudillo of the US.
The public is being transfixed by left hand of healthcare, only to be whacked from behind the head with a sandbag in the right hand.
You could've just said Kansas City Shuffle.
+1
"to prevent appreciation of the US Dollar."
You mean appreciation of their own currencies against the US Dollar?
Thx for this BTW.
Thanks, fixed. No problem!
Good post PM: Here's a video link to another relevant ZH posting on the dollar. Both Celente and Malpass make good points:
http://www.zerohedge.com/article/some-additional-opinions-dollars-imminent-demise
Policy makers in Washington have a "window of opportunity" to begin putting in place meaningful changes for our economy and dollar. Who knows if they are bright enough to seize it however. The U.S. needs leadership, not more bullshit. Time is running out. Are you listening President Obama?