Reserve Currency

Tyler Durden's picture

The "Disappointing" Impact Of Euro Devaluation On European GDP





The divergent prospects for growth, interest rates and monetary policies between the euro zone and the United States has led to a completely normal depreciation of the euro against the dollar, despite this depreciation being limited by the euro zone’s external surplus. Most observers are exuberant about this depreciation of the euro, but Natixis asks, faced with imports that the euro zone cannot do without (commodities, components manufactured outside the euro zone due to the segmentation of production processes), is it certain that it has a positive effect on euro-zone growth? Given the sensitivity of the euro zone's foreign trade (in volume terms and in terms of prices) to the euro's exchange rate, and at the historical link between the relative growth of the euro zone and the euro’s exchange rate, Natixis (devastatingly for the recovery-enthusiasts) find that the effect of a depreciation of the euro on euro-zone growth is very minor at best and, at worst, zero.

 
Bruno de Landevoisin's picture

The Monetized New Millennium





You show me sustainable growth through monetization and I'll take my bat & ball and go home. Until then, you're blowing hot air up my backside.

 
GoldCore's picture

Gold Is “Universally Acceptable” and Why China Is Buying - Greenspan





The Council on Foreign Relations may be concerned about the ramifications of China accumulating larger gold reserves than those that the U.S. has and the People’s Bank of China (PBOC) giving the yuan some form of gold backing. This would pose serious challenges to the dollar as global reserve currency and thus to U.S. hegemony.

 
Tyler Durden's picture

Oil, Empire And Playing The Great Game





The game is many boards deep. Nobody has god-like powers, every player makes mistakes and miscalculations. The advantages and arrangements are all contingent and temporary; those with the most flexibility and the deepest spectrum of assets will eventually increase their influence at the expense of those with weaker hands and those who fail to respond promptly and decisively to new configurations on the multiple boards in play.

 
Tyler Durden's picture

Europe & China Start Direct Trading In Euros & Yuan As De-Dollarization Expands





De-dollarization has been an ongoing theme hidden just below the surface of the mainstream media for more than a year as Russia and China slowly but surely attempt to "isolate" the US Dollar. Until very recently, direct trade agreements with China (in other words, bypassing the US Dollar exchange in bilateral trade) had been with smaller trade partners. On the heels of Western pressure, Russia and China were forced closer together and de-dollarization accelerated from Turkey to Argentina as an increasing number of countries around the world realize the importance of this chart. However, things are about to get even more dramatic. As Bloomberg reports, China will start direct trading between the yuan and the euro tomorrow as the world’s second-largest economy seeks to spur global use of its currency in a "fresh step forward in China’s yuan internationalization." With civil unrest growing on every continent and wars (proxy or other) at tipping points, perhaps, just perhaps, the US really does want rid of the weight of the USD as a reserve currency after all (as championed here by Obama's former right hand economist)... now that would be an intriguing 'strategy'.

 
Tyler Durden's picture

Paul Craig Roberts: "A Rigged Gold Price Distorts Perception Of Economic Reality"





The US economy and financial system are in worse condition than the Fed and Treasury claim and the financial media reports. Gold serves as a warning for aware people that financial and economic trouble are brewing. In the 21st century, US debt and money creation has not been matched by an increase in real goods and services. The implication of this mismatch is inflation. Without the price-rigging by the bullion banks, gold and silver would be reflecting these inflation expectations.

 
Tyler Durden's picture

China Moves To Dominate Gold Market With Physical Exchange





China is slowly moving to dominate the global gold market and it is important to join the dots regarding a few key recent developments in China relating to gold. When the International Board of the Shanghai Gold Exchange (SGE) was launched last Thursday September 18 during an evening trading session, it was notable that the first transactions were put through by a diverse group comprising HSBC, MKS (Switzerland), and the Chinese banks,  ICBC, Bank of China and Bank of Communications.  One encouraging factor about the SGE and the SGE international platform is that there is a lot of physical gold flowing through the Exchange. Therefore, price discovery is not just based on an inverted pyramid of mostly unallocated gold as in London or mostly cash-traded futures paper gold as in New York.

 
Tyler Durden's picture

The PetroYuan Cometh: China Docks Navy Destroyer In Iran's Strait Of Hormuz Port





Since China fired its first 'official' shot across the Petrodollar bow a year ago, there has been an increasing groundswell of de-dollarization across the world's energy trade (despite Washington's exclamations of 'isolated' non-dollar transactors). The rise of the PetroYuan has not been far from our headlines in the last year, with China increasingly leveraging its rise as an economic power and as the most important incremental market for hydrocarbon exporters, in the Persian Gulf and the former Soviet Union, to circumscribe dollar dominance in global energy - with potentially profound ramifications for America’s strategic position. And now, as AP reports, for the first time in history, China has docked a Navy Destroyer in the Southern Iranian port of Bandar-Abbas - right across the Straits of Hormuz from 'US stronghold-for-now' Bahrain and UAE.

 
Bruno de Landevoisin's picture

Dear Janet





Dear Janet; If I may be so forward, as a concerned citizen of the Constitutional Republic of the United States, it is with great consternation that I feel compelled to write you this distressing note.


 
Tyler Durden's picture

Russia FinMin Calls For Shift Away From US Treasurys Into BRIC Bonds, Settlement In Non-Dollar Currencies





it was Russia's finance minister Anton Siluanov who was the designated "bad guy", and as the WSJ reported, Russia is considering diversifying its debt portfolio away from countries that have imposed sanctions on Moscow and into the papers of its BRICS partners. Speaking on the sidelines of an annual investment forum in the Black Sea town of Sochi, Mr. Siluanov said the Finance Ministry wants to diversify its investment basket, and is looking for higher yields without too much risks. He said the ministry will consider buying papers issued by Brazil, India, China and South Africa, which along with Russia are known collectively as the Brics countries. "[We would like to] walk away from investing in papers of the countries that impose sanctions against us," Mr. Siluanov said, adding that the reshuffle would be carried out gradually. He didn't elaborate on when the first purchases of Brics debt may take place.

 
Bruno de Landevoisin's picture

Beware of Int’l Financiers and Global Dirigisme





Our degenerate Central Bankers have tossed up yet another asset air-ball into the debt financed Bubblenomics Millennium. The only remaining question is why?

 
Tyler Durden's picture

When War Erupts Patriots Will Be Accused Of Aiding "The Enemy"





In modern times, war is never what it seems. Mainstream historians preach endlessly about grand conflicts over territory, resources, political impasse, and revenge, but the cold hard reality is that all of these “motivations” are actually secondary, if they are relevant at all. If you really want to understand the past, or the intricacies of war, you will be lost unless you accept that most conflicts are designed; they are not random or natural. They are not the product of too much national sovereignty or individual liberty. No; traditional war is a tool for the organized ruling class. It always has been and always will be.

 
Tyler Durden's picture

An Appalling Practice Used In Only Two Nations, Of Which The US Is One





Eritrea - a tiny, mostly unheard-of country in East Africa - taxes its citizens who live abroad. Nearly every other country in the world bases its tax system on residency rather than citizenship. This practice has been condemned as “extortion” and a "repressive" measure by an 'authoritarian' government by the media. In Resolution 2023, the UN Security Council condemned Eritrea for "using extortion, threats of violence, fraud and other illicit means to collect taxes outside of Eritrea from its nationals." You may be thinking, "What's the controversy? Eritrea is getting criticized, and rightly so.” But there's another country that does the same...

 
Tyler Durden's picture

Can The Petrodollar Survive Low Interest Rates?





The Fed consistently managed the Fed Funds rates to keep oil prices steady, even when it required mid-teens interest rates and back-to-back recessions in 1980-1982. Since US Fed Funds rates were managed to preserve US creditors’ and oil exporters’ purchasing power in oil terms, the system proved acceptable to most nations. While the Petrodollar arrangement worked well for nearly thirty years, the arrangement began to wobble beginning around 2002-04...

 
Syndicate content
Do NOT follow this link or you will be banned from the site!