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SocGen: US is "daring the rest of the world to sell the dollar"

Daily Collateral's picture




 

Société Générale head of foreign exchange research Kit Juckes on the US dollar dynamic, QE 3, 4, and 5, "even lower rates for even longer than you thought," and the Bank of Japan slowly learning to match policies with the Fed:

In the US meanwhile, the economy is growing, albeit slowly, and the 'fiscal cliff' looms on the political horizon. The fact that we talk about the fiscal cliff at all, tells us something about US politics and policy options.

 

The Treasury issues debt at obscenely low cost and in as much quantity as it wants to the world's fearful investors. The exorbitant privilege of owning the world's dominant reserve currency has never been more in evidence. Yet party politics means that increasing the debt ceiling will be tortuous, significant fiscal tightening, simply as a result of temporary accommodation rolling out, a real risk.

 

This is a risk politicians can afford to take because they think the Bernanke Fed will bail them out. QE 3, 4 and 5 are in the pipe. And that is why the dollar is a structurally weak currency. Issuing vast amounts of debt at negative real yields and daring the rest of the world to sell the dollar is the chosen policy. Because Europe will be another drag on global growth and a support for the dollar, the upshot is even lower rates for even longer than you thought.

 

US policy determines the dominant capital flow driving currency markets - yield-hungry money flows out of dollars, returning sporadically as investors fear that their principle is at risk in a dangerous global economy. Faced with this, emerging markets lurch from rally to correction, but will continue over time to see more rallies than corrections.

 

The yen remains stronger than anyone thinks is good for it, but weakness relies on the BOJ and MOF matching Fed policies and this is something they are only learning to do very slowly. And the euro can only fall when the crisis enveloping it is at its most intense. To get from 1.32 to 1.24 in a month we needed record speculative shorts, talk of shifts out of euros by central bank reserve managers, and the threat of banking crisis in Spain and political chaos in Greece.


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Sat, 06/09/2012 - 22:30 | 2511444 Elmer Fudd
Elmer Fudd's picture

Still lots of non-USA folk with lots of dollars in their banks and mattresses.  Someday they will become bagholders, but it ain't happened yet and who knows if that herd of sheeple will ever rock the boat. 

Sat, 06/09/2012 - 17:44 | 2511019 blindman
blindman's picture

knowing that the overlay, conceptual monetary,
is a ponzi fraud designed to consolidate power
through the mechanics of private fiat money one might recognize that a "bad bank" is needed to unload the fraud and debris of the global correlations or conspiracy
and thereby convert dog shit into whip cream, but
only for the chosen few dog owners.
that would be the process and dynamic of modern
economics and politics bludgeoning the populace
today thanks to our least concerned journalist
with nothing better to do other than obey. we always hear that phrase, "..of last resort". insert lender, or sucker,
or buyer or spender. last resort? why do we need
anything of "last resort"? who's resort? re-sort?
what is all this systemic required sorting that must take
place or the system fails? it is the fragile face
of corrupt assumption of power into places that this
power has no business or rightful place, no place.
.
the assumption of power or dominion by virtue of
a total lack of coherency and integrity has not proven
to be an historic winning combination, this moment will
likely be no different.
when the fed res fails so do legal tender laws and
the irs, also the defense department and the urban economies. so... what won't be done to wash the wool
that hangs over the eyes? already, people are being
exterminated, have been for decades, to further the
cause of stupidity, influence and fraudulent paper
debt obligations and protection/s.
links to think about.
http://geraldcelentechannel.blogspot.com/2012/06/gerald-celente-on-rand-...
"
Saturday, June 9, 2012
Gerald Celente on Rand Paul Flip Flopping
Gerald Celente - Alex Jones Nightly Infowars 08 June 2012 : " ...by Rand Paul selling out Rand Paul supporters , this is the reason why we need a new third party and break the chains from this control that we have ...." says Gerald Celente " there is no freedom party anymore there is no constitutional party anymore it's gone , and all this election is going to be again it is going to be a corporate media election .."
.
http://www.democracynow.org/2012/6/8/part_2_acclaimed_new_film_5
Friday, June 8, 2012Full Show
Part 2: Acclaimed New Film "5 Broken Cameras" Captures Palestinian Village’s Nonviolent Resistance
.

Sat, 06/09/2012 - 16:25 | 2510878 WhiteNight123129
WhiteNight123129's picture

SHORT THE 30 YEARS (BORROW AT RECORD YIELD FROM THE GOV, FINANCED BY THE AMERICAN PEOPLE) BUY TOBACCO COMPANIES. DON´T WATCH THE VOLATILITY, PAY BACK THE MISLY INTEREST TO UNCLE SAM EVERY YEAR AND RE-INVEST THE YIELD DIFFERENTIAL INTO MORE TOBACCO SHARES. BE VERY PATIENT AND WATCH THE FIREWORKS OF EITHER GOV DEFAULT OR WONDERFUL INFLATION ON TOBACCO EARNINGS.

Sat, 06/09/2012 - 17:02 | 2510947 The Monkey
The Monkey's picture

"This is the chosen policy", well, until it's not the chosen policy.

Don't put all your eggs in the Bernanke basket.

Sat, 06/09/2012 - 17:24 | 2510984 AldousHuxley
AldousHuxley's picture

Gadhaffi tried to sell it for pan-African gold backed currency for trading their oil.

He got killed off.

Same with Iraq.

Plans in place for Iran.

 

The dare come with consequences as US military has shown.

 

Dollar's power does not come from creditability in wall st /US Treasury in managing it, but from fear of retaliation from US military might.

 

Once you join a gang or cult, there are often fatal consequences for attempts to leave them.

Sorry, world, US Empire is a global gang united by common currency.

Sat, 06/09/2012 - 11:31 | 2510175 DosZap
Sat, 06/09/2012 - 11:05 | 2510136 Sutton
Sutton's picture

The Academic is in so deep, he can't stop or adjust or change.  He's committed so many atrocites he knows he can't surrender.  He's in a bunker surrounded by lackeys who also can't repent and turn back.  They have bankrupted the greatest nation ever seen, a continent sized country, filled with every resource, with a weak neighbor on top and a retarded neighbor below.

We are all handcuffed to the Chairman of the Committee, and will have to go down with him.

Let's at least make noise if action is too much to ask for.

Sat, 06/09/2012 - 19:06 | 2511100 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

.deleted

Sat, 06/09/2012 - 10:06 | 2510016 tiger
tiger's picture

Peoples are the key. Waiting for Greeks/Spanish to make the right move (or will it be in France?) and that they don't have time to initiate the "More Europe" move.

Sat, 06/09/2012 - 07:32 | 2509908 Everybodys All ...
Everybodys All American's picture

The Japanese have taught the Fed how to monetize debt. If Bernanke continues the path he is on he will go down in history as the fed chairman who destroyed the US dollar and economy. I would not want that title.

Sat, 06/09/2012 - 10:28 | 2510056 Uchtdorf
Uchtdorf's picture

Nah, Japanese elites, being allowed into the Trilateral Commission, are just doing their masters' bidding. Same as it ever was.

Sat, 06/09/2012 - 08:19 | 2509944 bank guy in Brussels
bank guy in Brussels's picture

The 'Day the Dollar Die', prophetic 1979 reggae song by Peter Tosh, on his album Mystic Man:

« The day the dollar die, Things are gonna be better

The day the dollar die, No more corruption

The day the dollar die, People will respect each other

Finance ministers groaning, Unemployment is rising, And I hear my people crying ...

The day the dollar die, It's gonna be nice ...

The day this here dollar die, There be no more inflation

The day the dollar die ... We will love each other ... »

http://www.youtube.com/watch?v=EtwmjcsQi1E

Sat, 06/09/2012 - 14:51 | 2510644 tiger
tiger's picture

brilliant! now have a new earworm

Sat, 06/09/2012 - 11:53 | 2510174 disabledvet
disabledvet's picture

I'm with ya on this brother. Still..."this day is also on my mind": http://www.youtube.com/watch?v=nqFn_pM5QxU as a consequence as much as i would like to see the dollar get its comeuppance (ah, the 70's. wonderful time!) i just don't see it happening here. beyond what has already happened of course.

Sat, 06/09/2012 - 08:49 | 2509970 kentmills
kentmills's picture

Awesome song. I am afraid the only way out of this mess is to dissolve the union and get out of our arrangements with the fed, EPA, affordable care act, IMF obligations etc. If I had any hope for America, Rand Paul managed to kill it yesterday.

Sat, 06/09/2012 - 10:30 | 2510063 nevadan
nevadan's picture

There is a way other than dissolving the Union.  It is the use of nullification via the tenth amendment.  The Founders left it as a failsafe as the last amendment in the Bill of Rights.  Using nullification to stop unconstitutional actions by the federal government is the only way that central planning can be stopped.  It is a legitamate tool advocated by Jefferson and Madison to limit Washinton to the enumerated powers that are the contraints established by the Constitution.  Any action of the government outside of the few and specific enumerated powers are by definition unconstitutional.  The Founders envisioned the states as sovereign entities subject to the federal government in only those few areas, with all other decisions left to the states or the people.  It is left to the people in the states to decide what they want as government and nullification is simply saying NO! to federal overreach.  This is an idea that has been dormant since Appamattox but is slowly being re-instituted.  Study up on this at the link below.

http://tenthamendmentcenter.com/

Sat, 06/09/2012 - 18:30 | 2511086 kentmills
kentmills's picture

You are assuming that the American constitution still holds sway.  I see very little hope that TPTB will stand for much 10th ammendment dissent, anymore than I see adherence to the gold standard, the 4th ammendment, etc. 

There are SO MANY things that need to be nullified, the states congresses would be doing nothing but nullifying Federal edicts.  For example, just nullifying Agenda 21 initiatives alone would occupy 100% of a state congress' time.  Agenda 21 projects are often state and local projects that are funded at the Federal level.  How do you nullify Federally funded tyrany without dissolving the Federal government?

Sat, 06/09/2012 - 20:33 | 2511249 nevadan
nevadan's picture

Your point is well taken KM.  It is true that most of what the federal government has done going all the way back to the Civil War is unconstitutional.  Lincoln kicked the shit out of the South to make the point crystal clear that the Union would be preserved by any possible means.  He set the stage for central planning.  Since then states rights received lip service only and are associated with pro-slavery, anarchists, and any other unpatriotic sentiments that statists could conjure up.  Over time the populace has been conditioned to unquestioningly accept federal supremacy as the norm.  It is not however what the Framers wanted for the country. 

The 10th amendment is still a part of the Constitution and as such is still a part of the supreme law of the land, even though most of that document is totally disregarded today.  The average American sleepwalks through life without giving much thought to governance or what we started out as, much less where we are today and where we may be going as a nation.  Even with this sad state of affairs though if one asks the question "Do you believe in the Constitution?" and the ideas that still get that lip service regarding freedom of the press, peaceable assembly, free speech etc. nearly all will reply in the affirmative.  The problem is few seem to have any idea what those ideas really mean and how the Constitution came into existence or what it might take to reclaim our heritage as self-governing people.  The problem is ignorance of our history.  It follows then that the solution is education. 

It is not possible to reverse all the accumulated adulterations of 100+ years instantly and who can say how long it might take to get the average voter to consider the idea that self reliance is directly correllated with individual liberty.  Politicians have seduced the people with promises and programs for so long that it is unthinkable for most that life without a government teat is even possible.  Be that as it may, should we just lay down and accept our fate?  In my view the latent belief in freedom that is in most Americans can be awakened, and if it is TPTB are vastly outnumbered.  They still can be bent to the will of the people if there are sufficient numbers of voters who come to understand the true nature of things.  In that respect Obama may be the best thing to have happened.  More and more people are coming to the realization that what we have been doing can not continue.  To coin a tired cliche, the frog has had the heat turned up too quickly and is now aware that the water will be boiling soon.  The question is, which way will he jump? 

I firmly believe that Washington is broken beyond repair and no relief can be expected from that front.  Asking them to police themselves is ludicrous.  The only way out of this mess is to re-institute states as sovereign entities in all matters not given to the feds by the Constitution.  State governors and legislators along with local law enforcement must lead the way, starting with resolutions notifying Washington of that right.  They of course can not do that without the support (prodding) of the people. 

So to answer your question, federally funded tyranny can be ended by putting the central government is its proper place as an agent of the States, which it was originally intended to be.  State Sovereignty is the answer.  Getting that requires educating the population in the true history of the republic and what the Framers created in the Founding Documents.  Those brief documents; the Declaration of Independence, the Constitution, and the Bill of Rights, are our heritage.  It is no accident that they begin and end with the clause "the people".  If We the People want limited government and maximum freedom it is up to us to retain/reclaim it.

 

http://sheriffmack.com/

http://constitutionalsheriffs.com/

A couple of links of interest

Sat, 06/09/2012 - 19:17 | 2511141 Nadaclue
Nadaclue's picture

Actually, Alabama has just nullified Agenda 21's land grab, so it is possible. The question becomes; "Will Alabamians fight to keep this right, should it come to that."

 

http://news.investors.com/article/614173/201206071903/alabama-fights-un-...

Sat, 06/09/2012 - 20:04 | 2511208 kentmills
kentmills's picture

When Texas tried to tell the the TSA to take a hike, the TSA told them "Fine, but your planes will all be grounded."  When Alabama or other states realize what a gravy train they cut off when they go against TPTB, it's hard to tell your debt-junkie citizens that they can't have their Federal sugar daddy anymore. (At least, it's hard to tell them that - and still get reelected.)  I imagine that Alabama will have to cancel a lot of projects that are currently in the works if they follow their anti-Agenda 21 plan.  All those new parks and walking trails that were promised but now won't be built just won't seem fair to the green squaeky wheels.  I would love to think that principle will win, and states will nullify bad Federal policies.

I LOVE the 10th ammendment.  I just hope that nullification works out better for states than the TSA battle did in Texas.  I also hope that state governments are willing to extend their congressional sessions to 12 months - because it will take a full time effort to unwind the Federal tentacles that currently ensnare us.

Sat, 06/09/2012 - 11:49 | 2510205 oldman
oldman's picture

@nevadan

Thank you and congratulations for putting the lyrics that are running through the minds of many serious thinkers.

Many do not comprehend that , in spite of the 'propaganda press' and their slanting of the European problem to the pols needs for re-election material and distraction from real issues, this is really what is being said by the Europeans. The Germans want a strong federal union of Europe, and the rest just want to get on with their lives without being under the press of the Germans. Of course, history has given them reason for this.

In any event, we do not seem to be able to just say, 'enough!' to TPTB and abandon a union that is no longer 'perfect', but severely faulted in favor of the few AGAINST the majority. The Civil War has begun in the US and this time, hopefully, we will not be swayed towards our individual enslavement to these new 'carpetbaggers' who believe they are the masters of the universe. 

For this oldman, sovereignity and individual freedom are requisites for a way of living together in peace. In other cultures this is known simply as: respect.

Thanks, Nevadan-----------------om

Sat, 06/09/2012 - 11:58 | 2510203 disabledvet
disabledvet's picture

we did have a...ahem.."debate"...on this issue actually. here it is: http://en.wikipedia.org/wiki/Nullification_Crisis_aw here's how it was resolved: http://www.youtube.com/watch?v=dSraOEtrhWY i am a big fan of South Carolina of course. So is most of the "industrial world" as there is a wonderful economy down there. Here's one of America's great hero's: http://en.wikipedia.org/wiki/John_C._Calhoun From South Carolina of course. and here his "doing his job": http://www.youtube.com/watch?v=oWXsb4mfqVo at that time of course. I'm not sure if this is accurate. "Rumor has it" of course. He died before "the matter of the time was decided."

Sat, 06/09/2012 - 08:31 | 2509961 falak pema
falak pema's picture

Mystic river of no return...the day the dollar die, is still a lie...lay lady lay...becomes lie banksta lie...

Sat, 06/09/2012 - 11:38 | 2510188 Manthong
Manthong's picture

Just gotta love it..  

The Jamaican School of Economics?    : D

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