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Author Topic: De-Dollarisation.  (Read 24694 times)

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Offline Manny

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De-Dollarisation.
« on: August 12, 2015, 01:17:15 AM »
The penny is starting to drop even with Kerry.

<a href="http://www.youtube.com/watch?v=PCAFnCo6nyM" target="_blank">http://www.youtube.com/watch?v=PCAFnCo6nyM</a>

I wrote an article recently on de-dollarisation that can be read here in English and here in Russian.
I apologise.
And so he should.........

Online Markje

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Re: De-Dollarisation.
« Reply #1 on: August 12, 2015, 01:25:29 AM »
Rick Falkvinge (Political Pirate party leader sweden) also had a nice blog item about this:

https://falkvinge.net/2015/01/17/putins-unreported-genius-on-ukraine-currency-warfare/
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Online Steveboy

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Re: De-Dollarisation.
« Reply #2 on: August 12, 2015, 06:17:33 AM »
Next year you will no longer be able to pay using $ on any of my sites, I also want to contribute to De-Dollarisation  tiphat
I support no government anywhere, ever, never. No institution, No religion!!


Offline Manny

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Re: De-Dollarisation.
« Reply #3 on: August 12, 2015, 06:44:59 AM »
Next year you will no longer be able to pay using $ on any of my sites, I also want to contribute to De-Dollarisation  tiphat

I still take them, but make sure to get out of them fast. I am slowly getting the Chinese I deal with out of the habit of using them.

Wifey went to Russia recently, she took some ££'s to change of course, a few Euros to spend in Germany en route, and I said, "Do you want this couple of hundred dollars in my drawer too?". She said, "Be serious":ROFL:

The kids enjoy them in collages though......

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And so he should.........

Offline cufflinks

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Re: De-Dollarisation.
« Reply #4 on: August 12, 2015, 10:01:09 AM »
I hope you lot invest the same way you spout of such Anti Americanism you will get wiped out - My investment advisory newsletters all look at Global Trading opportunities since the USA now generates more than 50% of its global economic activity internationally:

Warning: Global Recession Now Imminent
By Dennis Slothower
Editor, Stealth Stocks Daily Alert

Stocks were absolutely smashed on Tuesday after China’s devalued its currency, signaling a growing concern of slow growth from one of the world’s biggest importers of raw materials. After moving sharply higher Monday, stocks completely reversed to the downside on Tuesday.
The major indexes climbed a bit off their worst levels going into the close but remained firmly in negative territory. The Dow tumbled 212 points (-1.2%) to 17,402, the Nasdaq plummeted 65 points (-1.3%) to 5,037 and the S&P 500 fell 20 points (-1.0%) to 2,084. The NYSE finished at -0.95% and the small cap Russell 2000 at -0.94%.
In overseas trading, stock markets across the Asia-Pacific region moved to the downside –Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index edged down by 0.1 percent.
The major European markets saw greater weakness. While the U.K.'s FTSE 100 Index dropped by 1.1 percent, the French CAC 40 Index plunged by 1.9 percent and the German DAX Index plummeted by 2.7 percent.

The sell-off came on the heels of news of the People's Bank of China's surprise move to devalue its currency. The bank set the value of the currency, known as the yuan or renminbi, at 6.2298 versus the U.S. dollar, 1.85 percent lower than Monday's official fixing rate.

The move raised concerns about the Chinese economy as well as the possibility that it could start a currency war.

China’s Dangerous Currency Decision
Following weak export and import data from China over the weekend, the communist nation once again sought to control its own currency by devaluing it in order to prop up its slowing economy. The Yuan posted its biggest one-day loss in two decades.

This set off a chain reaction of events.
1. It makes it more difficult for Janet Yellen and crew to raise interest rates in September now that China just cheapen its currencies and goods. Raising U.S. interest rates would strengthen the dollar and make our goods even less competitive. As a consequence, US government bonds rallied sharply Tuesday on the notion the government isn’t likely raise interest rates.
2. Crude oil prices fell to a six year low on the growing global weakness if China has to devaluate its currency like this.
3. This should set off a currency war as other countries seek to protect its markets. China could devalue its currency further.
4. It doesn’t bode well for U.S. companies that sell goods to the Chinese.
5. It argues that a global recession is imminent.

The Atlanta GDPNow model recently projects that lower inventory investment will subtract 1.7 percentage points from third quarter real GDP growth. There is a key reason why there is a lower inventory investment and that is because inventories are soaring to recessionary levels!

Goods are backing up. The key point to remember is that building inventories are subtracted from the GDP and we are now at similar levels as we saw in the recession of 2008 and 2000.
China sees a recession coming as well and may well be sacrificing something it has keenly wanted for a very long time – for the Yuan to be part of the IMF special drawing rights, “SPR” when this decision comes due in the fall.
One of the reasons why China was rejected in 2010 was its currency was not widely held by the world’s central banks because of their constant manipulating and devaluing of their currency. If you’re a central bank who wants to hold an unstable currency that is constantly being devaluated.

Tuesday’s devaluation hardly argues that China’s currency is stable. Perhaps China has given up on the idea the IMF will grant its currency SPR, with the U.S. having veto powers. On the other hand, U.S., Japan and Euro zone have all been devaluing their currencies over the last few years, as well.

Will IMF ruling crush U.S. dollar? (Expected Oct 20th)
Currency Expert: Watch what happens to U.S. Dollar after big announcement from the International Monetary Fund rumored for Oct. 20th. This announcement could start a domino effect, that will basically determine who in America gets rich in the years to come... and who struggles. This story is likely to explode in the months to come and initiate a transfer of wealth, unlike anything we've seen in more than three decades...

Get all the facts about this announcement – including the surprising country behind it all – right here.

Now we see a possible reason why President Obama set up the Pacific Rim trade agreement – to stop having to be so dependent on trading with China. Let’s give the jobs to illegal immigrants coming to America rather giving jobs to enrich China.

This devaluation helped to boost the U.S. dollar and it sent crude oil prices down sharply by $1.88 to close at $43.08 and making an intraday low of $42.69. Oil should find support at the winter lows at $42.03. This is key test. If we breach this support, next support levels are back down to the lows of December 2008 at $32 a barrel.

WTF $32 a barrel oil what does that do to Russia's 5 and 10 year economic plans - with Oil the Chinese Stock market and Yuan collapsing the Chinese reneged on a $25 Billion USD payment to Russia to kick off their $400 Billion pipelines and oil and natgaz fields joint exploration projects.  So that's it for Putin's pivot towards the east.  Putin's Grand Master status on the Global Geopolitical chessboard of life is now seriously in doubt.  Can you say MEGAlomaniac FAIL?

Once again, the investment bankers kept the S&P 500 index above its 200-day moving average defending this support level while they can, while the broad market is clearly breaking down through key long-term supports.

Offline Manny

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Re: De-Dollarisation.
« Reply #5 on: August 12, 2015, 11:35:45 AM »
It isn't "anti-American" to point out the damage the US and the dollar have done to the world. Or why your economy needs continual war to stay afloat. Or to discuss why the world must de-dollarise.

I'm sure Andrew can explain this better than me Cuffy, but my understanding is that China choosing to devalue their currency also brings down the dollar.

Also, as they don't borrow externally, and have so much less exposure as their own currency isn't yet as widely used abroad (which is rapidly changing), it doesn't really hurt them. It simply makes their exports more competitive.

A reduced oil price means the shale operations in the US go bankrupt. Which will hit the economy there, along with all those previously exported dollars coming home to roost.

Remember, China and Russia are de-dollarising. Add to that Iran. India, South Africa, Kazakhstan and today Kyrgyzstan. Heck, even Nigeria is de-dollarising.

I'd vote Trump if I were you. Let a businessman run the country so you can once again make stuff and export it instead of just printing money, selling each other services and starting wars. If you did that, you wouldn't need to try to rule the world with the dollar and your continual wars. Try exporting something other than death and dollars.
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Re: De-Dollarisation.
« Reply #6 on: August 12, 2015, 01:00:28 PM »
A reduced oil price means the shale operations in the US go bankrupt. Which will hit the economy there, along with all those previously exported dollars coming home to roost.

They won't go bankrupt.  The wells will be capped and production will wind down, but the asset will still be there waiting to be harvested when the world prices rise again. 







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Offline Manny

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Re: De-Dollarisation.
« Reply #7 on: August 12, 2015, 01:27:30 PM »
A reduced oil price means the shale operations in the US go bankrupt. Which will hit the economy there, along with all those previously exported dollars coming home to roost.

They won't go bankrupt.  The wells will be capped and production will wind down, but the asset will still be there waiting to be harvested when the world prices rise again.

Doesn't it cost money to mothball a project like that? Which impacts machinery and equipment suppliers. And men must be laid off, which impacts not only them, but all the businesses down the line that feed the workers with products and services. The very mechanism that allows money to flow down the chain through business and families. Stop the money flow and it affects many. The US manipulating the oil price down to hurt Russia, as with sanctions in the EU, actually hurts the instigator just as much.

Own goal.
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Re: De-Dollarisation.
« Reply #8 on: August 12, 2015, 01:37:50 PM »
Yes, it is not as easy as some unknowing thought leaders have propagandised.
Loans need to be serviced from cash flows (there are no profits in most cases).
Drilling sites have leases that can not be walked away from.
Large numbers of trained and skilled staff are now being 'deactivated' many will be lost if there is an uptick but even if they can be reactivated there will be a lag between uptick and their productive deployment.
There are technical issues with closing wells down.
The industry is an ecosystem with dependent parts; closure will be at least a semi-permanent choice. Bearing in mind that the 'boom' /bubble only existed due to the availability of almost cost free capital where will that capital come from when risk is correctly priced in a normal interest rate environment?
If capital is not available at a price the market will bear who will reemploy the workers, hire the equipment, renegotiate the leases, reopen the wells?
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Re: De-Dollarisation.
« Reply #9 on: August 12, 2015, 01:58:45 PM »
Doesn't it cost money to mothball a project like that? Which impacts machinery and equipment suppliers. And men must be laid off, which impacts not only them, but all the businesses down the line that feed the workers with products and services. The very mechanism that allows money to flow down the chain through business and families. Stop the money flow and it affects many. The US manipulating the oil price down to hurt Russia, as with sanctions in the EU, actually hurts the instigator just as much.

True that. 

Obama doesn't like the shale oil industry very much so he looks at it as "killing two birds with one stone".

As the owner of a shale lease myself (on the old family farm) their are contingencies put in place for such marketing changes.  The leases and up front payments are calculated to benefit the oil companies.  If the lease expires the owner can renew it again for a very small payment.   
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Re: De-Dollarisation.
« Reply #10 on: August 12, 2015, 02:03:40 PM »
Are you people smokin' something good?

Exactly WHICH currency is going to replace the dollar?

The Ruble?  Bwhahahahahahahahahaha

The Yuan?  Just devalued

The Euro?  Greece, Italy, Spain and Portugal would love that.

The Pound?  Britiannia no longer rules the waves. 

Sorry all you America-Hating chappies out there - the Dollar is here to stay. 
"If you obey all the rules, you miss all the fun" - Katharine Hepburn

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Re: De-Dollarisation.
« Reply #11 on: August 12, 2015, 02:12:34 PM »
Are you people smokin' something good?

Exactly WHICH currency is going to replace the dollar?

The Ruble?  Bwhahahahahahahahahaha

The Yuan?  Just devalued

The Euro?  Greece, Italy, Spain and Portugal would love that.

The Pound?  Britiannia no longer rules the waves. 

Sorry all you America-Hating chappies out there - the Dollar is here to stay.
Why does it need to be replaced. What if people simply want to trade in their own currency.

Gas/Oil from Russia -> Rouble
Gas/Oil from China -> Yuan,
etc.
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Re: De-Dollarisation.
« Reply #12 on: August 12, 2015, 02:26:08 PM »

Gas/Oil from Russia -> Rouble
Gas/Oil from China -> Yuan,
etc.

American businesses prefer to reduce the cost of doing business by not having to hedge against currency fluctuation risk in each transaction. 
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Re: De-Dollarisation.
« Reply #13 on: August 12, 2015, 02:28:24 PM »
Shakespeare, I had always taken you for one who knows a little more than the (untrue) 'fact' that a 'strong' currency is better than a 'weak' one. The punctuation is purposeful.

As I'd have expected you to know pressure for replacement of the dollar is not for a single currency - you may have been misled by your thought leaders in this regard. China and Russia, among others, have suggested the use of a basket system that would not enable a single currency issue to game the system as the United States is still doing.

As the counterparty to these devaluation is always the US that currency is forced to appreciate. The US has tried devaluation but without success. The effects upon the US of an appreciating currency unsupported by economic growth is the situation you now see and deplore in the US.

As one who is most certainly not an American hater but one who understands the implications of a declining USA I most certainly do not want to see the end game resultant from a 'no change' policy on the part of your leaders.

Oh, and Mark is right. Bilateral trading agreements exclude the dollar and are becoming easier to implement as technology increases the speed and transparency of transactions. However they are probably a stepping-stone toward the goal of a non-hegemonic currency without transaction costs benefiting none of the trading parties.
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Re: De-Dollarisation.
« Reply #14 on: August 12, 2015, 02:43:30 PM »

Gas/Oil from Russia -> Rouble
Gas/Oil from China -> Yuan,
etc.

American businesses prefer to reduce the cost of doing business by not having to hedge against currency fluctuation risk in each transaction.
And Russian and Chinese et.al. business prefer exactly the same. When they will be strong enough to push other currency in their business contracts, it will be the point of no return for the dollar.

For me personally, I hope this doesnt happen before I am financially independent from working hard.

Mark.
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