Tag Archives: dollar

Business/Economics, International, U.S.

Gold nears $2,000 per ounce in overseas trading, U.S. dollar crashing, caused by fears the Federal Reserve will print billions more in worthless money

In Asian markets, gold went over $1,900 per ounce.  The U.S. dollar continues to fall against most Asian money.

Even in Burma the U.S. dollar hit a ten year low. Nobody wants the worthless money: “Despite the falling price, most of the customers are selling their dollars.”-a foreign exchange dealer in Tamwe Township in Rangoon.

The reason for the exploding gold prices, and crashing U.S. dollar, is because many international market players believe the Federal Reserve Bank will try to stimulate the U.S. economy, by making credit easy, and printing more worthless dollars.

Here’s a little lesson in the concept of value: The more there is of something, the less it’s worth.  So, if a country prints off money like there’s no tomorrow, and that money is already worthless, how do you think the world is going to react?

They’re going to react like they already are; buying gold and dumping U.S. dollars.

The Japanese central banks are trying to stop their yen from rising in value (which hurts their export economy), so they’ve been flooding their markets with cash.  But the U.S. dollar is so worthless that it continues to fall against the yen, which pushes up the value of the yen.

Even the Australian and New Zealand dollars are now worth more than the U.S. dollar.

 

Business/Economics, International, U.S.

Global Economic War: Iran makes first oil sale not based on U.S. dollar

August 19, the first shipment of Iranian crude oil has been sold on Iran’s Bourse Organization/Kish Commodity Exchange.  500,000 barrels of heavy crude oil were sold.

Iran’s Bourse was created in 2008 for the specific purpose of selling oil using any international currency, other than the U.S. dollar.  Up until now, the Bourse/Kish exchange was selling only oil-derived products, things like plastics and pharmaceutical supplies.

This is the real reason the United States wants to attack Iran, it was the real reason the United States invaded Iraq.  If you remember Saddam Hussein announced that Iraq was no longer going to accept the U.S. dollar for its oil sales. Suddenly the U.S. was claiming that Iraq was connected to the 9/11 attacks, and that they had weapons of mass destruction (all since proven to be lies).

 

 

Business/Economics, International, U.S.

Global Economic War: China sells record number of Yuan bonds, pushing to dominate bond market and influence the Yuan as the New World Currency

A record amount of Chinese government bonds have been issued in Hong Kong.  And investors are buying them up.

Several types of yuan based bonds, which mature between 2 and 10 years, were sold, totaling U.S.$3.1 billion, a record.

This was the third Chinese yuan bond issue in Hong Kong.

Demand was so high for this latest issue of yuan bonds that orders had to be stopped.  There were 4.6 times more demands to buy the yuan bonds than there were yuan bonds to sell!

Analysts said China plans to issue more yuan bonds, with the goal to help promote the yuan as the next world currency, replacing the U.S. dollar.

Business/Economics, International, U.S.

Global Economic War: World Bank says China’s Yuan would make a good replacment for the U.S. Dollar

“The Chinese policy mix includes a tool box of administrative measures … In general, one of the lessons that the United States and others can learn (from China) is that to have supervisory policies for bank regulatory systems can be a useful part of the tool set.”–Robert Zoellick, World Bank president

Zoellick gave a speech in Australia, August 14, and made it clear that China was a shining example of how economic policies should work.  In fact he said that China’s yuan may help the world pull through “a time of danger.”

Zoellick did warn that the current inflation situation, in China, might be tougher to control than Chinese officials think.

The World Bank president also hinted that China’s cooperation with the bank, creating a “catalyst for consensus”, would benefit China in the near future.

Business/Economics, International, U.S.

What Economic Recovery? Emergency World meeting over U.S. credit downgrade, China says no more U.S. dollar, Germany says finally the U.S. gets what it deserves

“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone.”-Chinese government/media commentary

The European Central Bank will hold an emergency meeting on Sunday, August 7.  The issue; the credit rating downgrade for the United States.

Finance ministers and central bankers from the Group of 7 major industrialized nations will meet by telephone on Sunday.  The broader Group of 20 were due to hold a conference call Saturday evening.

China and Japan are calling for coordinated action to avoid a new worldwide financial crisis.  One issue that’s being looked at is whether the world can continue to use the U.S. dollar as a reserve currency: “International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country.”-Chinese government/media commentary

Another issue to be discussed is the amount of secure debt versus risky debt: “It will weigh on secure assets. The bigger reaction will be on risky assets, including equities and on agencies and states backed directly by the federal government. U.S. Treasuries will remain a benchmark. This is a ship which takes a long time to turn around.”-Ciaran  O’Hagan, Societe Generale in Paris.

Germany, the economic powerhouse of Europe, says it’s about time the U.S. got what it deserves: “I’m not surprised about the U.S. rating downgrade, rather I am astonished that, for weeks, international rating agencies have focused their attention on the European debt situation but not the American one. For a while, there have been clear worries about America’s economic woes but also the fact the U.S. is heavily indebted.”-Norbert Barthle, a budget expert for German Chancellor Angela Merkel’s conservative party

 

 

Business/Economics, International, U.S.

What Economic Recovery? China blames the United States for creating runaway inflation, the dollar will continue to lose value despite debt limit deal, China looking for other currencies to do business with

“If the unemployment rate continues to rise, it will further damage investor confidence and force them to move away from U.S. Treasury securities, leaving the U.S. government no choice but to print money and depreciate its currency.”-Lu Zhengwei, Industrial Bank Co Ltd

Chinese officials say the U.S. Debt Limit Deal is not enough, mainly because it will not stop job loses, and it doesn’t cut enough government spending.

Zhu Baoliang, chief economist at the State Information Center, says U.S. government debt is too large to be resolved through normal measures such as tax increases and deficit reductions.  Also, it is highly unlikely the U.S. government will significantly reduce entitlements like Social Security and Medicare, or significantly draw down troops overseas.  All that means is at the very least the U.S. dollar will continue to lose value.

The Chinese are blaming their runaway inflation on the falling U.S. dollar.  In June inflation hit 6.4% in China.  The increase in costs is causing a drop in factory orders, which hits China where it hurts.

Chen Kexin, chief analyst at the Distribution Productivity Promotion Center of China Commerce, says no matter what happens now, inflation will pick up speed.  He predicts oil prices will go back up to more than $100.00 per barrel, and copper could hit $10,000 per ton.

According to the U.S. Department of the Treasury, China is the largest foreign holder of U.S. government debt (the overall largest holder of U.S. debt is…the U.S. taxpayer via the U.S. Treasury).  Many analysts in the United States think China has no choice but to keep buying U.S. debt, creating a false sense of security among U.S. leaders.  But one analysts admits China is cutting back: “Beijing is probably not buying Treasuries as intensely as it did last year.”-Derek Scissors, The Heritage Foundation

Chinese analysts are pushing for their government to diversify their U.S. debt holdings, because the debt limit deal won’t help: “The debt crisis may have a negative impact on the fiscal spending of the U.S. government, which may drag down the U.S. economy for the rest of the year.”-Hou Zhenhai, Investment bank China International Capital Corp

It’s not just U.S. government bonds China has, but something called foreign exchange reserves.  These bonds can come from corporations, like Fannie Mae and Freddie Mac.  The problem for China is most of its foreign exchange reserves are in U.S. dollars.  Chinese analysts are warning of the “all your eggs in one basket” scenario; they think China will be dragged down when the United States finally sinks.

In fact, one analysts thinks the situation is so bad that China should stop investing into all foreign operations: “Because of the lack of mature overseas investment projects, the scale of China’s overseas investment is not big enough to absorb massive foreign exchange reserves in the short term. Therefore, to invest overseas is not realistic.”-Zhang Yi, Institute of Foreign Economy, the National Development and Reform Commission

 

Business/Economics, International, U.S.

What Economic Recovery? Russia says the United States is to blame, Putin calls the U.S. a parasite, the world should stop using the U.S. dollar

“The country is living in debt. It is not living within its means, shifting the weight of responsibility on other countries and in a way acting as a parasite.”-Vladimir Putin, Russian Prime Minister

Russia says the United States is dragging the world down with it, because of its control over the world finance system, and because most of the world uses the U.S. dollar as a reserve currency.

If the U.S. dollar continues to lose value then it can bring down international trade.  Russia, and other countries like China, are pushing for a new form of reserve currency.


Business/Economics, International, Opinion, U.S.

China refuses to pay U.S. debt

“The U.S. wants China to pay its economic bills by raising the value of the yuan. This is preposterous!”-Zhang Yansheng, Institute of Foreign Economics

Officials from China and the United States are meeting this week to discuss, what else, economic issues.  Many U.S. officials want the Chinese to raise the value of their money, the yuan, in order to help the U.S. dollar.  But the Chinese say bullsh*t!

Ma Xiaoye, of the China Foundation for International & Strategic Studies, says U.S. leaders created the economic problems, so “How can the U.S. count on a foreign currency to solve them?” Zhang Yansheng added “The U.S. should take responsibility for its own policies, instead of asking China to pay for it.”

The U.S. wants China to raise the value of their money, against the U.S. dollar, to help fight inflation in the United States.

Chinese analysts say the problem is that every time the Federal Reserve implements a quantitative easing (QE) policy, it sends “hot money” into the world economy creating “market bubbles”, which is what China does not want.

Maybe if the Federal Reserve stops issuing money that really isn’t there, the Chinese might decide to raise the value of their money.

Business/Economics, International, U.S.

Chinese bankers say dump U.S. dollar, buy other currencies

Several banking officials in China, have stated that they Chinese government needs to “reduce” and “diversify” their foreign currency holdings.

Tang Shuangning, chairman of China Everbright Group said China must reduce its excessive foreign exchange reserves and further diversify its holdings.

Zhou Xiaochuan, governor of China’s central bank, said that China’s foreign exchange reserves “exceed our reasonable requirement”.

Xia Bin, a member of the monetary policy committee of the central bank, said China should further diversify its foreign exchange holdings.

According to western media reports, most of China’s foreign currency holdings are in U.S. dollars.  This is part of why the value of the U.S. dollar hasn’t dropped as far as it should have.  But if the Chinese government listens to its bankers, then the dollar could crash.

When the Chinese bankers say China must reduce its current foreign currency holdings they’re talking about U.S. dollars.  They’re saying the Chinese government has too many, based on how bad the U.S. economy is.

When the Chinese bankers say they want the Chinese government to diversify foreign currency holdings, they mean they want to get rid of U.S. dollars and buy money from countries that have good economies, like Russia, India, South Africa and several South American countries.