It has become a disconcerting trend that as geopolitical events intensify and keep a majority of people engaged in the latest outbreak of political theatre, the words of central bankers fall on increasingly deaf ears.
QUESTION: Marty; There is talk that Britain will join NAFTA rather than the EU. Does that make sense? What do you think? Continue reading
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The euro’s considerable rise against the British pound signals trouble to come for U.S. markets, according to Evercore ISI technical analyst Rich Ross.The euro and the pound fell against the dollar after the U.K. voters opted to leave the EU, but sterling fell further, hitting three-decade lows against the dollar. According to Ross, the relative weakness in the British currency mirrors the euro’s huge rally against the British pound from 2007 to 2009.
Debate continues as some analysts predict $1.20-$1.30 could hold for sterling this year
Investors should prepare for the British pound to hit parity with the U.S. dollar by the end of the year or early in 2017, said at least one analyst — and should parity happen, it’ll be a first.
After last week’s surprise U.K. vote to exit the European Union trading bloc, sterling fell more than 12% against the dollar on Friday before trimming some of its unprecedented drop late in the U.S. trading day. But bears regained the upper hand on Monday, sending the currency to a fresh 30-year low at $1.3121. Continue reading
Soros is a man intimately familiar with currency crises
Not long after billionaire George Soros forecast a so-called hard landing for the Chinese economy, Beijing fired back by calling out the high-profile investor, warning him of betting against its currency, according to media reports Tuesday.
“Soros’ challenge against the renminbi and Hong Kong dollar is unlikely to succeed, there is no doubt about that,” said a government official in an opinion piece widely cited by several media outlets.
Chinese Yuan Enters Reserve Currency Status with the IMF
If World War 3 is cyber-economic (and it is), the yesterday we just saw one of our most important weapons given away. Yesterday was a huge day for China. Christine Largade, managing Director of the International Monetary Fund announced that the Yuan has just taken its place alongside the dollar, Euro, British pound, and Japanese yen as an official reserve currency. The move has been expected for a while but was delayed in August.
Russia has branded foundations run by the financier George Soros a threat to the country’s constitutional order, and banned them from disbursing grants to Russian partners.
The Open Society Foundation and the Open Society Institute’s Assistance Foundation, both financed by Soros, are the latest additions to a list of “undesirable organisations”, a list the government says is necessary to stop foreign governments from interfering in Russia’s internal affairs. The two are accused of posing a threat to Russia’s constitutional order and national security.
Remember this photo from March?
The IMF yuan reserve currency approval ensures that the days of the dominance of the U.S. dollar are coming to an end.
“China’s [yuan] is ultimately destined to replace the U.S. dollar as the world’s primary reserve currency, while China’s central government bond market will become the world’s primary reference market for fixed income,” Jan Dehn, head of research at Ashmore Group, wrote in a research note. Continue reading
The Central Bank of Russia has included the Chinese yuan in its reserve currency basket, TASS reports. The move is expected to boost the yuan’s presence in the Russian financial market.
As of December 31, 2014, the latest data available, the US dollar was still dominating Russia’s forex basket at 44 percent. The second most-used foreign currency was the euro with 42 percent. The British pound made up 9.5 percent. Continue reading
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China is promoting greater use of the yuan in global trade, investment and as a reserve currency
China’s currency, the yuan, ascended to a higher global status in 2014, with the value of cross-border payments by the currency accounting for 23.6 percent of total cross-border payments, according to a report on the globalization of the yuan released by the People’s Bank of China, the country’s central bank, on June 11.
Data from the Society for Worldwide Interbank Financial Telecommunication shows that the yuan became the second most used currency in trade finance—letters of credit and collections, the fifth most popular payment currency and the sixth most used foreign exchange currency in the world in December 2014. Continue reading
China is in talks with the International Monetary Fund to include the yuan in the institution’s basket of reserve currencies, according to a central bank official.
“We are evaluating this and are actively in talks with the fund,” People’s Bank of China Deputy Governor Yi Gang said at a press conference in Beijing Thursday. “We hope it can fully consider the progress of yuan internationalization, allowing the yuan to be part of the SDR basket in the foreseeable future.” Continue reading
(Bloomberg) — The minutes from the Federal Reserve’s meeting last month have foreign-exchange traders wondering whether Janet Yellen has joined the currency wars.
Central bankers from Europe to Australia have engaged this year in bouts of rate-cutting oneupmanship, leaving the U.S., and possibly Britain, as the only developed nations seen as likely to raise borrowing costs in 2015. The dollar climbed to its strongest in more than a decade as a result, prompting billionaire Warren Buffett and Goldman Sachs Group Inc. President Gary Cohn to question whether the Fed can now increase rates without damaging the U.S. economy. Continue reading
The eventual death of the U.S. Dollar is a given and not up for debate. This will, however, sound alien and come as a shock to most living in the west who continue to go on living while turning a blind eye to current events.
Willem Middelkoop and Terence van der Hout of the Netherlands-based Commodity Discovery Fund believe that when the world’s reserve currency is reset away from the U.S. dollar in the next decade, gold prices will rise and mining equities will follow. Van der Hout and Middelkoop tell The Gold Report that by focusing on producers, near-producers ,and turnaround stories, they plan to capitalize on the opportunities in North America, Africa and beyond.
The Gold Report: Willem, your first book predicted the collapse of the global financial system a year before the 2008 fall of Lehman Bros. In your new book “The Big Reset: War on Gold and the Financial Endgame,” you’re predicting the demise of the dollar as the reserve currency by 2020. You said it can occur as a carefully planned event or as the result of a crisis. What would these two scenarios look like?
Willem Middelkoop: Authorities always prefer to act within a well-planned scenario. The U.S. and the International Monetary Fund (IMF) understand that the U.S. dollar has to be replaced one day. It could be 2020. It could be 2018. It could be 2023. It has to be replaced by another anchor to support the worldwide monetary system. Continue reading
The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.
“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.” Continue reading
Europe’s brief respite from political and financial turmoil has come to an abrupt halt in the wake of a nerve-rattling Italian election, Britain’s loss of its cherished triple-A credit rating and troubling developments on other fronts.
On Monday, the euro fell to its lowest level against the U.S. dollar in six weeks, but strengthened slightly against the British pound, which was shaken by the credit downgrade announced late Friday by Moody’s Investors Service. The Standard & Poor’s 500 index lost more ground in a single session that at any time since November. Italian bonds plunged and German bonds and U.S. Treasuries rallied, as nervous investors once again looked for safer harbours.
Two unlikely political hotheads – loudmouth comedian Beppe Grillo and Silvio Berlusconi, the aging schmoozer who never says die – turned the Italian election on its head, virtually guaranteeing that the country faces a period of political chaos. Continue reading