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Africa Just Says "Nein" To The US Dollar: Time To Go Short The USDZMK And USDGHC?

Tyler Durden's picture





 

Last week we presented the aftermath of the very much unannounced "Conference of Beijing" as a result of which Africa has been slowly but surely converting to a continent controlled almost exclusively by China. However, there was one thing missing: even as China has been virtually the sole source of infrastructure funding in Africa, the continent has long been a legacy dollar preserve, which obviously means renminbi penetration and replacement would be problematic to say the least. As it turns out, this too is rapidly changing: as the WSJ reports, Africa is increasingly just saying "nein" to the USD. "African countries are trying to shoo the U.S. dollar away, even if it means threatening to throw people who use greenbacks in jail. Starting next year, Angola will require oil and gas companies to pay tax revenue and local contracts in kwanza, its currency, rather than dollars. Mozambique wants companies to exchange half of their export earnings for meticais, hoping to pull more of the wealth in vast coal and natural-gas deposits into the domestic economy. And Ghana is seeking similar ways to reinforce "the primacy of the domestic currency," after the cedi plummeted more than 17% against the dollar in the first six months of this year. The sternest steps come from Zambia, a copper-rich country in southern Africa where the central bank has banned dollar-denominated transactions. Offenders who are "quoting, paying or demanding to be paid or receiving foreign currency" can face a maximum 10 years in prison, the central bank said in a two-page directive in May." Is it time to dump the EUR in hopes of a short covering rally that continues to be elusive (just as Germany wants) and buy Zambian Kwachas instead? We will wait for Tom Stolper to advise Goldman clients to sell the Zambian currency first, but at this rate the USDZMK may well be the most profitable currency pair of the next 3-6 months.

Why is Africa angry at the one allmighty Greenback?

The moves aim to strengthen thinly traded currencies and steer more capital into isolated financial markets. But the new rules are an abrupt change for foreign and local companies used to doing business in U.S. dollars.

In other words, Africa is finally pushing for its own capital markets, rudimentary as they may be. One wonders just who may be pulling the strings behind this very quiet but very crucial development. But one thing that is certain is that the traditional operations for legacy companies in Africa is about to change for good:

"There will be an adjustment period," said Mike Keenan, an African currencies analyst at Absa Capital, a South African subsidiary of Barclays PLC. "But the story with Africa and commodities has been one where the proceeds kind of circumvent the country. These authorities are trying to clamp down on that."

 

Zambia's central bank sees upside to a strong and liquid kwacha.

 

The move to promote the currency's use gives authorities leverage over monetary policy they lacked without control of the dominant market currency. The crackdown also could bring local banks new business in hedging instruments and foreign-exchange transactions.

 

"The kwacha is legal tender," said Caeser Siwale, chief executive in Zambia for Renaissance Capital, an investment bank. "There tends to be a different yardstick for us," with big companies expecting small economies like Zambia to live with a reliance on foreign currency that would never happen in Europe or China, he added.

 

In Zambia, the measures appear to be working. Heightened demand for kwacha pushed the currency to its highest level in more than a year in July, when it reached 4,640 to the dollar. It has slipped a bit since then.

So why go long the ZMK (and short the USD)? Here's why.

Fueling the demand were foreign-owned manufacturing and mining companies racing to acquire kwacha even as they asked the government to reconsider the policy. The companies complain it make operations more expensive and cumbersome.

 

"It might be hard to find kwacha when you need it," said Frederick Bantubonse, general manager of Zambia's Chamber of Mines. Mining companies also are worried about the cost of hedging their copper production against kwacha volatility. The group has appealed to government to limit the types of transactions affected by the move.

 

In the long run, strengthening the kwacha by decree will take less time than demonstrating political stability and a commitment to controlling inflation, said John K. Wakeman-Linn, mission chief for Zambia at the International Monetary Fund.

And while it is unlikely that the Kwacha has to fear becoming a carry currency, the short USDZMK may be at best a short-term trade. At least until China reveals its full plans.

In the long run, strengthening the kwacha by decree will take less time than demonstrating political stability and a commitment to controlling inflation, said John K. Wakeman-Linn, mission chief for Zambia at the International Monetary Fund.

 

"I don't think it's necessarily an adverse policy, but I don't see it providing a lot of additional long-term confidence in the kwacha, either," he said. "Regulation like this cannot substitute for policies that generate confidence in the market."

Those who are leery of going long just one African country can diversify their holdings. Into Ghanaian Cedis, aka GHS (1 year chart of USDGHC here).

Policy makers elsewhere in Africa are watching Zambia. Ghana, another fast-growing African economy with rich mineral deposits and a nascent consumer class, also is seeking to boost its currency's value.

 

Since May, Ghana's banks have had to keep all of their deposits at the central bank in cedi, rather than a mix of cedi and U.S. dollars. The switch encourages banks to seek deposits in cedi rather than foreign currency, according to Millison Narh, a deputy governor of the Bank of Ghana.

 

The central bank's pro-cedi policies aim to make life easier for people like Sterre Mkatini, who recently lugged a backpack filled with $8,000 worth of local currency to a nearby bank to pay one year's rent upfront. Many landlords demand such payments to sidestep high inflation.

Of course, there are risks:

Kwaku Asente Addo, a cashier at Penta Forex Bureau, isn't sure Ghana's government can or will do much to purge the greenback. "They can't do that; they're bluffing," he said.

Maybe they are. But if, indeed, China is pushing the strings, maybe they aren't.

Finally, here is the one currency to really watch:

A central bank ceiling on over-the-counter dollar transactions at banks has sent Ghana's class of China-bound traders into street-side foreign-exchange bureaus that normally cater to fanny-pack-clad tourists. Chinese importers often show up just before flights back to China desperate to buy $100,000.

How long until China will welcome all African transactions to settle in CNY?

Either way, keep a close eye on Africa. Things are heating up there quickly.

 


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Mon, 08/13/2012 - 10:21 | Link to Comment francis_sawyer
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Gold speaks many languages...

Mon, 08/13/2012 - 10:25 | Link to Comment Long-John-Silver
Long-John-Silver's picture

and GOLD is understood in all languages.

Mon, 08/13/2012 - 10:40 | Link to Comment Pladizow
Pladizow's picture

Jim Rickards Bitchez!

Mon, 08/13/2012 - 11:08 | Link to Comment Manthong
Manthong's picture

Zambia is not Haiti.

Mon, 08/13/2012 - 11:14 | Link to Comment camaro68ss
camaro68ss's picture

Operation enduring African freedom commencing in 3....2....1..... commence Kinetic carpet bombing  

Mon, 08/13/2012 - 10:41 | Link to Comment economics9698
economics9698's picture

The bankers whored out America, time to move on and steal another pot of gold.  Africa needs to watch their back.

Mon, 08/13/2012 - 10:34 | Link to Comment dereksatkinson
dereksatkinson's picture

Using gold for international settlement?  That's crazy!~ 

 

It's also the right thing to do.

Mon, 08/13/2012 - 10:36 | Link to Comment Peter Pan
Peter Pan's picture

Gold is the only Esperanto of history.

Mon, 08/13/2012 - 11:19 | Link to Comment Sisyphus
Sisyphus's picture

Gold just listens, never speaks.

Mon, 08/13/2012 - 13:35 | Link to Comment defencev
defencev's picture

This site continue to predict many years of depression and the end of US Dollar.

You cannot have both. The emphasis on currencies of resource reach countries in this article makes no sense: everybody knows that the only way to trade commodities during recent years was to lose money and if not QE rounds it would be one way street. That is the truth of deflationary environment (sorry Jim Rogers).

And as long as it lasts all these kwachis and kwanzas will remain what they are:

just worthless shit while the dollar continue to reign despite sudden emphasis (by this site) on idiotic actions of local central banks.

Mon, 08/13/2012 - 10:23 | Link to Comment malikai
malikai's picture

I wonder how much of this is due to local currency volatility in those countries(as opposed to China's influence or dislike of the U$D).

Mon, 08/13/2012 - 10:33 | Link to Comment dereksatkinson
dereksatkinson's picture

all the emerging markets have been volatile because of the dollar.  It's NOT a domestic issue. 

Mon, 08/13/2012 - 10:39 | Link to Comment malikai
malikai's picture

I'm sure local/regional politics plays a big role in their currencies. But WRT the dollar cross on any of those currencies, the volatility(and spreads) are horrendous. Promoting local/regional exchange is just good business sense, provided they can keep political stability.

Mon, 08/13/2012 - 10:25 | Link to Comment Blopper
Blopper's picture

No dollar allowed.

Toilet paper is exempted.

Mon, 08/13/2012 - 10:27 | Link to Comment Long-John-Silver
Mon, 08/13/2012 - 10:39 | Link to Comment Peter Pan
Peter Pan's picture

Well said Blopper. Toilet paper truly is the only fiat currency of any enduring value.

Wed, 08/15/2012 - 18:51 | Link to Comment mkkby
mkkby's picture

I predict a renewed interest in handing out dollar-denominated foreign aid.  Spread around by CIA (no, I meant NGOs and missionaries).

Watch your back Africa.  Rebel armies have been supported for much less.

Mon, 08/13/2012 - 10:26 | Link to Comment Hype Alert
Hype Alert's picture

They've seen this movie in the Zimbabwe fiasco.

Mon, 08/13/2012 - 10:27 | Link to Comment buzzsaw99
buzzsaw99's picture

5000-1? Oh yeah, gimme some of those kwachas baybee! :snark:

Mon, 08/13/2012 - 12:19 | Link to Comment digitalhermit
digitalhermit's picture
USDZMK and USDGHC? No thanks, I think I'll stick with short the USDBTC cross. http://usd.cer24.com/btc/chart/?q=180
Mon, 08/13/2012 - 10:27 | Link to Comment Stuck on Zero
Stuck on Zero's picture

We are not Uganda.

 

Mon, 08/13/2012 - 10:29 | Link to Comment Long-John-Silver
Long-John-Silver's picture

but Uganda can come to you.

Mon, 08/13/2012 - 14:26 | Link to Comment Zwelgje
Zwelgje's picture

You mean Kenya?

Mon, 08/13/2012 - 10:27 | Link to Comment LongBalls
LongBalls's picture

It's time to short everything. Get out.

Mon, 08/13/2012 - 10:28 | Link to Comment Zola
Zola's picture

Knowing that Bernanke gets his inspiration from the African money printers such as Gideon Gono, i'd be a bit careful about going long any of these currencies. Gold probably much better

Mon, 08/13/2012 - 10:43 | Link to Comment buzzsaw99
buzzsaw99's picture

If that were true then people would be able to pay off their debts. The bernank only cares about his friends in high finance. Permanent debt slavery is what they want for everyone else.

Mon, 08/13/2012 - 11:19 | Link to Comment j0nx
j0nx's picture

That's why I laugh when people say hyperinflation. No mechanism for wage increases in the US due to global wage arbitrage and no way the banksters allow you to pay off your debts with your new found hyperinflated currency. Not gonna happen until the country is doomed and then it won't matter anyway since debts will be the least of your worries with the FSA knocking down your door asking for 'dey gimmedats'. Nope, sorry suckers, you get hyperbiflation and you'll like it.

Mon, 08/13/2012 - 11:38 | Link to Comment Jack Burton
Jack Burton's picture

Agreed! Hyperinflation is not the game, it is deflation. No mechanism for wages to rise in the west. Hell, on average they are going down. Sure the 1% have made big gains, but they are not going to drive inflation!

Mon, 08/13/2012 - 17:04 | Link to Comment Nels
Nels's picture

What, no room in your dichotomy for stagflation?

The folks who can drive inflation are the central bankers, and I'm pretty sure they all fit within the 1%.

Mon, 08/13/2012 - 22:27 | Link to Comment HurricaneSeason
HurricaneSeason's picture

Since very little in the stores is made in america, it's unlikely that american wage increases or decreases will be the only factor in inflation. China's wages are increasing and once they have enough dollars stockpiled and enough Chinese employed, prices should take off.

Mon, 08/13/2012 - 13:01 | Link to Comment Totentänzerlied
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"Not gonna happen until the country is doomed"

Define "doomed"...

Mon, 08/13/2012 - 11:55 | Link to Comment AnAnonymous
AnAnonymous's picture

Knowing that Bernanke gets his inspiration from the African money printers such as Gideon Gono,

________________________

That is the reverse. They got their inspiration from US citizen economics.

Mon, 08/13/2012 - 14:34 | Link to Comment Zwelgje
Zwelgje's picture

And 'US citizens' got their inspiration from the Chinese. 

 

The Yuan dynasty (1271-1368) printed vast amounts of money leaving the little people weary of paper money ever since.

Mon, 08/13/2012 - 17:04 | Link to Comment OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Chinese are not in a hurry to make the yuan fully two-way convertible. Last thing they need is loads of sweaty little fuckers arriving with a pile of kwanza at the airport, who then want to buy yuan for the trip back home. They want the US to be the bag holder of the "reserve currency" scam. On the other way, though, they recently relaxed exchange control laws to allow people to use yuan to buy foreign currencies.

Mon, 08/13/2012 - 10:29 | Link to Comment robobbob
robobbob's picture

silly peasants

how long before "informed sources" discover that al CIAUDA is really behind these moves and launches a peace keeping effort to bring freedom and democracy to their central banks?

everyone up for a serengeti spring?

Mon, 08/13/2012 - 10:30 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Long PM's then.  Oh wait, have been for 20+ years, physical that is.

TPTB won't like this, listen for the drums of war to beat louder.

Mon, 08/13/2012 - 10:42 | Link to Comment malikai
malikai's picture

When we hear that Nigeria has decided to form it's own bourse, we'll know for sure that it's time to go long war again.

Mon, 08/13/2012 - 14:31 | Link to Comment Urban Redneck
Urban Redneck's picture

uh, they've got one already,
the've even got their own SEC
http://www.sec.gov.ng/

Mon, 08/13/2012 - 10:32 | Link to Comment smlbizman
smlbizman's picture

the fed is going to have to contact klinger to get fresh excuses on why we are invading africa now...wmds, nukes, democracy, save the whale...cant wait for this one...

Mon, 08/13/2012 - 10:57 | Link to Comment A Lunatic
A Lunatic's picture

There is evidence of machetes of mass destruction..........

Mon, 08/13/2012 - 10:33 | Link to Comment yogibear
yogibear's picture

Time for all responsible countries to dump the US dollar. Bernanke and the Fed believe they have ability and right to print to infinity.

Will Bernanke and the fed defend the US dollar? Looks like no. 

If the US dollar broke the lows Bernanke and the fed would look for other countries to shore-up and buy the US dollar. What a game.

Mon, 08/13/2012 - 10:45 | Link to Comment Winston Churchill
Winston Churchill's picture

Only whem they are ready with their alternate SWIFT system.

Watch this space................

Mon, 08/13/2012 - 10:33 | Link to Comment pods
pods's picture

Lots of Al CIA duh in Africa at the moment.  I read on the internet that Al CIA duh has set up several franchises all over the continent.

Just a coincidence that they set up shop in the countries that are less than favorable to being flooded with FRNs.

pods

Mon, 08/13/2012 - 10:35 | Link to Comment Scalaris
Scalaris's picture

 

 

Just wait for the Renminbi to become the defacto panafrican currency instead of bying Angolan & Ghanaian candidates of hyperinflationary paper.

In the interim, I'm guessing the UN would be reviewing its actions for some more "democracy spreading / rebel assisting / dictator chasing" throughout the continent.

Mon, 08/13/2012 - 10:39 | Link to Comment Temporalist
Temporalist's picture

Hello.  My name is Kntuwee and I am a prince of Zuckaire.  I have created this Falsebook to accept transfers of money totaling $24,000,000,000 of which I have the privelege to reimburse you 10,000:1 for you time and generosity, because my finance minister has suspended some accounts due to over-pricing on transaction fees.

 

The transefer is risk free on both sides as GS and JPM represent us.

 

If you find this proposal acceptable, we shall require the following documents:

(a) your banker's name, telephone, account and fax numbers.

(b) your private telephone and fax numbers —for confidentiality and easy communication.

(c) your letter-headed paper stamped and signed.

Mon, 08/13/2012 - 10:42 | Link to Comment OhBaldOne
OhBaldOne's picture

It all makes sense why the US is strengthening its AFRICOM positions - if the "Savages" in Africa dump the buck, it'll be time to re-bomb them back to the ultra-dark ages. And if gold is used for any transactions in the oil-rich countries, you can expect regime change, more drone activity, boots-on-the-ground, and yet another Libya-like NATO excuse to invade, overthrow and seize the oil fields.

Mon, 08/13/2012 - 10:58 | Link to Comment Miss Expectations
Miss Expectations's picture

They are clearly listening to the Ghost of Moammar; gone but not forgot.

Mon, 08/13/2012 - 11:12 | Link to Comment Offthebeach
Offthebeach's picture

Brussels/EU will go along in their dark hearts of we give them back the Congo...er...Zaire.

Mon, 08/13/2012 - 10:43 | Link to Comment Quinvarius
Quinvarius's picture

Just time to get gold, not African paper. 

Mon, 08/13/2012 - 10:46 | Link to Comment the 300000000th...
the 300000000th percent's picture

I guess gold isnt just for pre WW2 jews and central banks

Mon, 08/13/2012 - 10:51 | Link to Comment Dr. Engali
Dr. Engali's picture

That's a pretty sad statement when Africa starts dropping the dollar. We are running out of countries to export our inflation to.

Mon, 08/13/2012 - 10:53 | Link to Comment Venerability
Venerability's picture

Bravo for an actually interesting and informative post, Tyler!

Some seem to forget, by the way, that the S in BRICS is South Africa. And that South Africa has joined China, Russia, and Brazil - India is still problematic - in doing most of their commodity deals in their own currencies, without Emperor Dollah interfering.

Mon, 08/13/2012 - 10:57 | Link to Comment ebworthen
ebworthen's picture

China is taking over Africa.

Third world foothold for the Renminbi (Yuan).

Mon, 08/13/2012 - 15:36 | Link to Comment ebworthen
ebworthen's picture

Who doesn't realize that China is colonizing Africa?

Mon, 08/13/2012 - 22:40 | Link to Comment HurricaneSeason
HurricaneSeason's picture

They were doing well with Moammar until the bombings.

Mon, 08/13/2012 - 11:03 | Link to Comment supermaxedout
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Africa Just Says "Nein" To The US Dollar

Im wondering that the Africans are speaking German. 

Ok,Ok in South Africa the language overthere is "Africans,"  whichs is a mix of Dutch German and South African speak, Besides that you may find in Namibia a few left over German speakers from the colonial time. But thats it more or less.

Ah, now I got the message, the Afrikaner and the Germans are in a similar position. Both are not following orders from Washington anymore as they should do according to their role as minor important figures in the big game.  Blacks and Germans hand in hand against the self appointed rulers of the world. Just like in Germany after WWII when the Black American soldiers fraternized immediately with the Germans for the reason, that black soldiers were treated by their white commanders only a tiny bit better than the surviving German nazi bastards.  So the Black soldiers were the first to treat Germans after WWII as humans again and formed an alliance in the black market in Germany during that time. Much to the dislike of the Army since after all, the Germans were white people while the black US soldiers acording to the laws in US at that time more something like half human only.

 

Mon, 08/13/2012 - 12:00 | Link to Comment AnAnonymous
AnAnonymous's picture

Just like in Germany after WWII when the Black American soldiers fraternized immediately with the Germans for the reason, that black soldiers were treated by their white commanders only a tiny bit better than the surviving German nazi bastards.

__________________________________

Actually, US army treated their enlisted negroes worse than the common german prisoners.

Very often, in their propaganda, the US army claimed that they did not hang any of their soldiers during WW2. Which is true, the US citizen way, that is once the hanged people are removed and the hanged people were negroes.

As to fraternizing between Germans and US army negroes, that is a good one. Would make laugh quite a lot of Germans.

One could wonder where US citizens get their history.

Mon, 08/13/2012 - 11:10 | Link to Comment bigwavedave
bigwavedave's picture

Can we please have a chart of the Ghanian Gotcha? Thanks

Mon, 08/13/2012 - 14:11 | Link to Comment Oldrepublic
Oldrepublic's picture

http://www.xe.com/currencycharts/?from=USD&to=GHS&view=1Y

http://www.xe.com/currencycharts/?from=GHS&to=USD&view=1Y

Cedi to USD and vv

history of Ghana's currency since independence does not inspire much confidence, from old Ghanian pound to 1st 2nd and 3th cedi.

USD may be weak but not compared to those West African currencies

https://en.wikipedia.org/wiki/Ghana_cedi

video of illegal gold mining in Ghana from AL Jazeera

http://www.youtube.com/watch?feature=player_embedded&v=ye3Bs7D_i98#!

Mon, 08/13/2012 - 11:13 | Link to Comment Joe A
Joe A's picture

Africa, beware of strangers bearing gifts (whether American, European or Chinese) and watch out for them free lunches.

Mon, 08/13/2012 - 11:17 | Link to Comment orangegeek
orangegeek's picture

Converting to communist China's currency.  That makes sense.  History tells us that communist countries are bastians of stability and endless prosperity - just like it says in their manifesto.

Mon, 08/13/2012 - 12:58 | Link to Comment Totentänzerlied
Totentänzerlied's picture

Compared to the currencies Africa has seen in the past 110 years? Yes.

Mon, 08/13/2012 - 11:31 | Link to Comment atomicwasted
atomicwasted's picture

This may be the true black swan that no one, even those who expect the collapse of the dollar, actually saw coming.  It will be amusing if it's Africa that finally killed the dollar. 

Mon, 08/13/2012 - 11:33 | Link to Comment Quaderratic Probing
Quaderratic Probing's picture

Zambian Kwachas.... can't wait to fill my wallet with those babies.

http://www.google.ca/search?q=zambian+kwachas&hl=en&prmd=imvns&tbm=isch&...

2012 RebasementOn January 23rd, 2012, Finance Minister Alexander Chikwanda announced that Zambia would rebase the kwacha currency by lopping off three zeros, a move that should make it easier for foreign investors to participate in the economy.( from WIKI )

Inflation is defeated by chopping off zeros.......press the easy button. This is why Ben only worries about de-flation

Mon, 08/13/2012 - 11:36 | Link to Comment Jack Burton
Jack Burton's picture

Now we know why the US military is positioning large naval and air forces back to the Pacific. Western Pacific to be exact.

"King Dollar" is what allows the whole American power game to continue. I feel a threat against "King Dollar" is perhaps worse that a threat against any other type of US asset other than our nuke stockpile.

Chinese have become smart capitalists, they know how to bend their economic power to suit the nation agenda. Did old Dick Nixion ever invision what he would create when he went to China to get them to accept capitalism? Boy did he fuck up! When I was a kid, China was a no man's land of poverty and brutality run by some clown called Mao who was the worst economic manger on earth. It was so bad they turned to the basket case Soviet Union for aid and help!

Mon, 08/13/2012 - 11:58 | Link to Comment dwdollar
dwdollar's picture

Nixon continues to fuck us long after his death. Crook doesn't fully describe what he is/was.

Mon, 08/13/2012 - 14:49 | Link to Comment reader2010
reader2010's picture

The Pentagon's war in Africa has already been carrying out quietly for some time. 

http://www.thenation.com/article/168898/militarys-new-lily-pad-strategy#

Mon, 08/13/2012 - 11:50 | Link to Comment Divine Wind
Divine Wind's picture

 

 

I lived in Liberia, West Africa for a big chunk of 2010 helping establish a gold mining operation deep in the interior.

I can tell you from first hand experience that the Chinese were everywhere. I learned to speak Mandarin several years ago living in a different part of the world and was blown away when I found so many Chinese in W. Africa. Not only are they funding infrastructure development, but they are often also importing the labor for these projects. Thousands of workers. Reminded me of colonies of driver ants.

Why?

Because few of the local men actually wanted to do the work, and of those that did, few had any of the necessary trade skills. One of the consequences of long, drawn out civil wars is that lots of men die, and along with them, the skilled workers like carpenters, masons, welders, etc... Illiteracy is also above 50%. Mortality rate of ~30% by age 2. Most of former child combatants are now fucked up adults. (How the hell you recover from something like this is beyond me).

Another interesting trend to note is that the Chinese are also leasing vast tracts of land across sections of Africa simply to grow rice and other sturdy ag products to ship straight back home. They import everything except for the dirt, including workers.

This is on top of their incredible appetite for iron, rubber, offshore drilling rights, etc...

China has definitely made some powerful strategic plays on the Dark Continent.

For those that have never been, your money is well spent traveling over there for a look see.

Your perspective on the world, and the enormous blessings poured out on us here in the U.S., will be forever changed.

 

 

 

 

 

Mon, 08/13/2012 - 12:35 | Link to Comment Oldrepublic
Oldrepublic's picture

Thanks Divine Wind for your comments on Liberia. Our made in USA Charles Taylor chopped off a lot of hands there during the civil war, hard on future carpenters!

Were the Chinese learning local languages? Do you think that they were planning on staying there a long time?

Mon, 08/13/2012 - 13:30 | Link to Comment Divine Wind
Divine Wind's picture

 

 

"Our made in USA Charles Taylor chopped off a lot of

hands there during the civil war, hard on future carpenters!"

"Were the Chinese learning local languages? Do you think
that they were planning on staying there a long time?"

 

Yes, Charles Taylor was one evil SOB and not only in Liberia. Certainly not America's finest export.

Regarding languages, Liberia would be a strange case as the dominant local language is English. There is a local language spoken by about half the population called Liberian Kpelle (the 'K' is silent), but it is a tough language, both spoken and written.

Regarding the Chinese plans to stay, I would have to say that for some, yes.

The Chinese are investing in these infrastructure projects because it is buying access to strategic resources needed by their country.

As long as those resources are available and a welcome mat remains at the Port of Monrovia, the Chinese will be there, not only going after those resources, but also with their hotels, shops selling everything from groceries, building materials, etc..

But so will the U.S.

America now has very strong defense, humanitarian and business ties with Liberia. We are actively training their military and police force, helping stand up their crime lab, building hospitals and schools, etc..

Personally, I actually enjoyed myself there. Monrovia sucks, looks like a recovering war zone and is still terribly depressing, but if you like being in dense jungle, as I do, this is the place. Some of the densest jungle on the planet is right there.

 

 

 

 

Mon, 08/13/2012 - 13:44 | Link to Comment reader2010
reader2010's picture

Here is a short video made for tourists.

http://youtu.be/OMwI5unlK9M

Mon, 08/13/2012 - 14:04 | Link to Comment Divine Wind
Divine Wind's picture

 

 

 

Yup. West Africa can be a pretty evil place.

 

Anthony Bourdain did a piece for the Travel Channel on Liberia. Pretty strange also.

http://www.travelchannel.com/tv-shows/anthony-bourdain/episodes/liberia

 

Mon, 08/13/2012 - 12:03 | Link to Comment AnAnonymous
AnAnonymous's picture

They are so small economies. Very easy to destabilize.

All of these countries will keep needing USD to pay back their debt.

Africa is to remain 'American' turf for some time, as long as there is some wealth to extract.

After that, extorter treatment applied to extorted who are no longer a revenue producing asset.

Mon, 08/13/2012 - 12:10 | Link to Comment Monedas
Monedas's picture

EBOR .... The Ebola Breakout Rally gets a boost from union dispute at SA platinum mine !  A new twist on "necklacing" .... slash the victim with machetes while he burns rubber ! What sweet people ?     I am so fucking prescient .... even when I'm wrong .... I'm right ! (borrowed from Rush)          Mugabwe, Zimbabwe .... Coming soon in South Africa !          Monedas     1929         Thank you God for my stilleto powers of observation and my laissez libertaire !      Fuck socialism into the dirt from which it came !

Mon, 08/13/2012 - 12:15 | Link to Comment runlevel
runlevel's picture

Wouldnt it be neet if we transacted in Christmas' instead of dollars?

Mon, 08/13/2012 - 12:37 | Link to Comment Totentänzerlied
Totentänzerlied's picture

Couldn't have happened to a more deserving currency.

Mon, 08/13/2012 - 12:42 | Link to Comment Yen Cross
Yen Cross's picture

 Good luck finding a reputable FX dealer/broker that has a market in usd/zmk. I wonder what the spread in that stick of dynamite is?

update: http://www.forexpros.com/currencies/usd-zmk

Mon, 08/13/2012 - 14:39 | Link to Comment Urban Redneck
Urban Redneck's picture

The previous Stratfor piece was pure garbage, even after making allowances for Stratfor's continued demonstrations of incompetence.  The Beijing conference was "kiss the ring" theater, of course the diplomats were "enthusiastic", but I haven't encountered a single Head of State or Cabinet Minister who doesn't look at the Chinese as neo-colonial devils attempting to strike a bargain (for their own benefit).

 

Moving domestic transactions away from USD denomination and settlement is a more complex issue, it addresses reducing the imported inflation, reduces gray/black market transaction ease, and most importantly, facilitates State control of the domestic currency's valuation.  In simplest terms- the Banana Republics have come to the conclusion that, if the keepers of "global reserve currency" are going to devolve into a Banana Republic and simply debase their current reserve currency into a foreign version of their own banana bucks, they might as well cut the middle man (and his share).  If someone is interested is Africa's migration away from the dollar, then there two institutions to watch, and neither is in Africa- the PBOC (and its bilateral swaps) and Banque de France (which controls the CFA Franc). 

 

The misinformed (read STUPID) conclusion that someone might infer from these articles with is that the USD isn't welcome in Africa anymore, when in fact they LOVE foreign direct investment denominated in USD, even more so then in the denominations of their former colonial powers, or heaven forbid, that toxic Chicom toilet paper.  There is even a clear preference in Africa for American exported goods, over both European and Chinese goods.  "Peace Dividend" loving FUCKTARDS who ignored the new cold war that sprung up before the dust had even settled on the Berlin Wall collapse, probably missed the whole competitive Africa gangbang starring China, Japan, and South Korea, which the last credit crisis turned from a gangbang to a one-on-one, with Barack Obama playing the part of the impotent cuckold in the corner.  The last four years of idiotic US foreign policy towards Africa have been particularly expensive from the standpoint of competitive positioning vis-à-vis the Chinese, but the trend isn't new and spans the partisan and ideological divides of both Pennsylvania Ave and Foggy Bottom.

 

I've been toying with idea of starting a dedicated Bank, or at least a Fund, to eliminate the seemingly endless parade of incompetent US and Eurotrash shylock middlemen that are necessary to close deals in Africa.  The are some unique structural impediments, in addition to the basic cultural divide, and the usual issues with project and venture finance in undeveloped economies. (Goldman's bench must be getting pretty shallow if they haven't coined a new term for Sub Saharan Africa yet...)

Mon, 08/13/2012 - 17:14 | Link to Comment OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Nice post. Don't forget the recent StanChart takedown. Kicking StanChart out of NYC would make their dollar clearing business in Africa that much more difficult. Hard to tell whether it's just "regulatory theatre" right now; or a crack between London and NY; or what. But interesting nonetheless.

Mon, 08/13/2012 - 21:52 | Link to Comment earleflorida
earleflorida's picture

'Demarcation and the Revival for Independence Forever Haunting Africa's Continent?'

"Africa's International Borders as Potential Sources of Conflict and Future Threats to Peace and Security"  __  Dr. Francis Nguendi *{ Institute for Security Studies [ISS] White Paper 233 __ www.iss.co.za/uploads/Paper_233.pdf } Ref:

Note: Lots of Good stuff... but, must [?] be google`d

Thankyou Tyler

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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