Reserve Currency

Tyler Durden's picture

Deluded Currency Cultists Believe The Dollar Is Invincible





At the onset of the derivatives collapse in 2007/2008 it would have been easy to assume that most of America was receiving a valuable education in normalcy bias. As much as we are for people waking up to the nature of the crisis, there comes a point when those who are going to figure it out will figure it out, and the rest are essentially hopeless. The cultism surrounding the U.S. economy and the U.S. dollar is truly mind boggling, and by “cultism” we mean a blind faith in the fiat currency mechanism that goes beyond all logic, reason and evidence.

 
Tim Knight from Slope of Hope's picture

Globalists Gas Game Theory





I clearly have a very hard time reconciling a U.S. stock market making new all-time-highs almost daily, especially in the face of what most economists consider to be a weak domestic economy with negligible growth prospects.  Moreover, when you layover the thoroughly stalled and certainly weaker overall global economic picture, it’s even harder to rationalize.  Finally, throw into the mix the gravity of threatening geopolitical tensions between the U.S. and Russia, the two nations with the largest stockpiles of tactical nuclear weapons on earth, and the market actually welcomes it.  Something majorly does not add up, well, to this Idiot anyways.

 
GoldCore's picture

Putin Economic Adviser Warns Russia Will Sell U.S. Bonds And “Crash” Financial System





As newswires reported the comments from Putin’s senior aide Glazyev, the USD Index fell marginally to session lows and broke below 80.00 before recovering. If diplomacy does not prevail, then trade wars and currency wars will ensue with attendant consequences for the already vulnerable financial system and global economy.

 
Marc To Market's picture

Russia and its Dollar Reserves: Going Nowhere Fast





Dispassionate analysis of Russia/Crimea and the threat of Russia dumping its dollar holdings.  Much posturing.  Many point to US bluster have tough time identifying Russia's bluster.  Let me help.  

 
Tyler Durden's picture

Who Gets Thrown Under The Bus In The Next Financial Crisis?





The speculative excesses and political power of Wall Street pose a strategic threat to the Deep State, and as a result a showdown between the Deep State and the surface machinery of governance that has been captured by Wall Street is looming. Put another way: we've reached Peak Wall Street and it's all downhill from here. This crisis is simple to summarize: the paper claims on wealth so far exceed actual wealth that something's gotta give. Simply put, the vast majority of these claims will have to be zeroed out, i.e. these phantom-claim "assets" will be voided and declared worthless. This leads to the key question: who will the Deep State throw under the bus to preserve itself and the nation-state?

 
Asia Confidential's picture

Emerging Market Banking Crises Are Next





Yuan volatility is part of a major rebalancing of global trade. The next phase of EM turmoil will involve banking crises in several countries including China. 

 
Tyler Durden's picture

Guest Post: The Dollar And The Deep State





What others describe as the Deep State we term the National Security State which enables the American Empire, a vast structure that incorporates hard and soft power--military, diplomatic, intelligence, finance, commercial, energy, media, higher education--in a system of global domination and influence. One key feature of the Deep State is that it makes decisions behind closed doors and the surface government simply ratifies or approves the decisions. A second key feature is that the Deep State decision-makers have access to an entire world of secret intelligence. What would best serve the Deep State is a dollar that increases in purchasing power and extends the Deep State's power.

 
GoldCore's picture

Celente Warns On Dollar and Euro - “Which One Is Going To Go First?”





Celente again warned of the economic parallels with the 1930’s and said that we are again seeing recession and depressions, currency wars, trade wars and that this would lead to actual wars. His free webinar and Q & A tomorrow will look at ways to protect yourself from these risks in 2014 and beyond.

 
Tyler Durden's picture

Certainty, Complex Systems, And Unintended Consequences





When it comes to complex systems and unintended consequences, the key phrase is "be careful what you wish for." A lot of people are remarkably certain that their understanding of how systems will respond in the future is correct. Alan Greenspan was certain there was no housing bubble in 2007, for example (or he did a great job acting certain). Some are certain the U.S. stock market is going to crash this year, while others are equally certain that stocks will continue lofting higher on central bank tailwinds. Being wrong about the way systems responded in the past doesn't seem to deter people from being certain about the future. Complex systems don't act in the linear way our minds tend to work.

 
Tyler Durden's picture

Cisco's Disastrous New Normal





Disaster.

 
Tim Knight from Slope of Hope's picture

The Likeness of God is to Create not Consume





The Likeness of God is to Create not Consume.  Ingenuity and innovation are hallmarks of our human creativity. Curiously, those marvelous characteristics unique to mankind, which have delivered the most astoundingly advanced technological productivity gains ever conceived, are now fast displacing a multitude of relatively menial jobs previously attended to by human beings, who having been anchored to unsatisfying and unfulfilling laborious routines, were less able to enjoy the free time and space certainly required to become more creative enlightened beings themselves.

 
Tyler Durden's picture

Triffin's Dilemma: The 2014 Edition





Triffin’s Dilemma is that the country that issues the world’s reserve currency will have to choose between:

1 ) running a trade deficit in perpetuity - risking of a loss of confidence in its currency and solvency while the rest of the world enjoys an adequate supply of USDs.

or

2) running a trade surplus and enjoying an appreciation in the value of the dollar while the rest of the world suffers from a lack of liquidity and collateral.

Either way, there are negative implications for world growth. In the first example – in which the US runs a trade deficit in perpetuity – the US continues to add to its debt and risks undermining its ability to pay off that debt. In the second example – in which the US runs a trade surplus – emerging market currencies are put under pressure by the USD potentially leading to capital outflows, a higher cost of debt, and global financial instability.

 
Pivotfarm's picture

Death of the Dollar





We’ve all done it, haven’t we? Chucked something in the wash and turned it on too high, only to see it pop out at the end of the cycle and it ends up the size of your hamster. Well, Obama has been doing the same. Except this time it’s not your winter woollies that he’s shrinking, it’s the greenback.

 
Tyler Durden's picture

The Two Biggest Fears





There are two major concerns that everyone should be concerned about that we see taking this sell-off further and faster than anyone else expects...

 
Tyler Durden's picture

Guest Post: From PetroDollar To PetroYuan – The Coming Proxy Wars





Why would the central bank of Nigeria decide to sell dollars and buy Yuan? At first glance it might not seem the most interesting or pressing question for you to consider. But we think it is one of those little loose threads that if pulled upon carefully begins to unravel the hints and traces of a much larger story.

 
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