De-Dollarisation.

[msmoby]

Manny,

what is your agenda on here  ?  Are you hoping to please someone by attempting to wind up most of your members with 'stuff' you don't really believe ... ?

The nation most likely to cause WW3 - thank you 'leaders'-  is the one encouraging instability = physically - in it's neighbours.

Yes, the USA was late to the party in WWII  - as was the former USSR - but most Brits realise that we were getting help beforehand and that we might be speaking German if it wasn't for their sacrifices.

[andrewfi]

Many people are under the impression that having a currency appreciating in value is a 'good thing' and that a depreciating currency is a 'bad thing'. They get werry, werry confused when they refer to the dollar which behaves, due to its status in a somewhat anomalous fashion.

First thing to note is that the exchange rate between any two currencies is no more or less than the price of each currency expressed in terms of the other. There is no magic status, no inherent 'good' in that respect.

Secondly, a freely floating currency, in a free and transparent market will appreciate, or depreciate in line with the productivity of the country which the currency serves. If a currency increases in value for any reason other than increased productivity (anything else is some form of market intervention and serves to reduce market freedoms) then the eventual result is inflation in the domestic market. That is why the printing of money as advocated by some thought leaders and their followers is usually a bad idea.

China has, for a long time, been pegging the yuan to the dollar. They have been interfering in the market to support the dollar. That support has had a cost in terms of higher domestic prices than was necessary due to inflation imposed fro the over valued yuan. Now the Chinese are reducing the degree to which they offer that support to the dollar. Basically they are doing the same as the Russians did last year - what I don't know is the degree to which (as in Russia) the move from a fixed rate to a free float was planned. In Russia the move to a free float from their dirty float was a planned move with a target moved ahead by some 90 days. The value of the currency is close to the target value set by the RCB last year.

So, this tells us that all the gum bashing, the keyboard bashing by US based thought leaders and their know-little followers is for naught.

Bear in mind that only a few months ago the US was begging China to reduce the value of the Yuan - now there are moans and criticism. As with Russia for the US and those whose thoughts their leaders lead there is no such concept as memory or consistency.

What China is doing is clearly consistent with their economic policy going back a decade or more. Indeed, as the Chinese internal market grows the changes we see are essential to the success of that movement. The growth potential of the Chinese market, at yuan denominated prices that are acceptable to the domestic market, is greater than any growth likely to be attained by US or European markets that seem from empirical evidence to be in recession.

Overall though, we are now seeing a move to competitive devaluation. The US tried and failed with their quantitative easing, now it is the turn of other markets to do the same. The Chinese have, for now, succeeded, other currencies will follow along - the result is that US currency appreciates in comparison which, because it is unrelated to productivity improvements and because the dollar is less easily exported these days, leads to inflation in the US economy and the hidden recession is now showing signs of becoming overt.

[Donhollio]

Manny,

what is your agenda on here  ?  Are you hoping to please someone by attempting to wind up most of your members with 'stuff' you don't really believe ... ?

 He sure has changed hasn't he? From loving Florida vacations, to being all giddy about a sleigh ride through Central Park in New York. Maybe he has giving up on listening to American country music star Alan Jackson. A move his wife and children would welcome I'm sure if for nothing less then a lack of pain in the inner ear.
  Now we have a the ridiculous topic of the Greenback being replaced. I can see China selling good in the Yuan, they will just set a price that equates what they'd get for it in USD. It's nothing earth shattering as 

 [derogatory term removed] suggests, Canada has free trade agreements in place throughout the world, but you can't expect anyone to think that some unstable country is going to dump the Greenback and try their luck trading in their own is foolish.

[B.B.]

What modern history has shown us is that Europe needs Adult Supervision, fairly constantly... 

You forget, many of us over here on the civilised continent have furniture and houses older than your country. You are trying to teach Granny to suck eggs here. We managed alright for hundreds of years before the US even existed.

So having old furniture is some sort of....accomplishment?

No need to teach granny to suck eggs...only to keep her from dooming millions upon millions of people to their deaths b/c some poofy, inbred twat can't get along with some other poofy, inbred twat.

Never mind that we took the detritus of Europe and produced a superpower that is vastly more prosperous than that mother country.  That really has to sting.

The rise of the US up to say the mid 70's was a remarkable phenomenon from nothing. The dollar was a thing that, in hindsight, should never have been allowed to become what it did.

I'm afraid Nixon and Kissinger checkmated you, there. 

Remove the dollar, you remove the power. Remove the power, and US aggression and WW3 is avoided. Why countries all over the world are now dumping dollars and de-dollarising.

Keep....the dream....alive.... 

While someday the Chinese will have a larger nominal GDP than the US, and the America-hating, ethnomasochistic international left, (as well as the America-hating, ethnomasochistic domestic Left, for that matter) will chortle and stroke themselves off, as if this means something....

...right before the Muezzins call them to prayer.

Manny,

what is your agenda on here  ?  Are you hoping to please someone by attempting to wind up most of your members with 'stuff' you don't really believe ... ?

I'm afraid, as so often happens with married men, that we have to treat him like a 'captive nation' now.  He's been "Finlandized", as it were.  No shame in that, one supposes, but it must simply be part of the calculus, now.

B/B

[Manny]

I love how some of the Septics have their head firmly, I suppose you would say in the sand.

[Ste]

Dollar is still king in the banking world my friends, do not worry!

As I've said, I'm currently working in the International Banking and Payments Domain and see Dollars, Euro, some Sterling and Yen.

No frigging Roubles or Yuans, not saying they're not out there but really the only reason you'd align with these fragile currencies is down to sheer bloodymindedness and an optimistic view on risk.....

[andrewfi]

Dollar is still king in the banking world my friends, do not worry!

As I've said, I'm currently working in the International Banking and Payments Domain and see Dollars, Euro, some Sterling and Yen.

No frigging Roubles or Yuans, not saying they're not out there but really the only reason you'd align with these fragile currencies is down to sheer bloodymindedness and an optimistic view on risk.....

Hmmm...

currencies are not football teams. One does not align with or support them. Currencies are used to enable trade.

The dollar is, for the time being, still the easiest with which to manage trade - as long as one chooses an intermediary currency. The need for an intermediary currency is falling away because the lag between purchase and fx transaction is falling away - to almost zero.

Intermediary currencies are useful when there is a significant lag between deposit of currency A and receipt of currency B. If that lag is days or weeks, as it used to be, then a stable (not stable) intermediary is a handy thing to have. If a transaction is processed from end to end in milliseconds then the need for that stability goes away. That is why digital currencies like Bitcoin can be used for cross currency transactions - even though on a macro scale the currency is very volatile on a micro level it is not. The value will not change in the fractions of a second that a transaction takes.

One also seeks a stable currency when one wishes to hold currency and do nothing with it - in today's economy that is not really what one wants and, as we know, the dollar is NOT very stable these days when compared to other currencies. How stable is the dollar in ruble terms (not very) yet the same number of rubles will buy roughly the same number of houses or cows in Russia as it did a year ago.

Given that there is an implicit tax in every transaction that goes through the dollar then it makes sense to remove that tax where possible so Russia, for example, bus good from China in yuan and vice versa. No exchange rate risk, no 'tax' to the US as a result of having had to buy and hold depreciating dollars in anticipation of a possible transaction.

A look at history is instructive here:
After WW2 sterling was still widely used as an intermediary (and still is), sterling was still used as a store of value (and still is) - in both cases to a degree that is disproportionate to the volume of world trade in Sterling denominated goods and services.

As a last point, it should be remembered that the volume of money traded for goods and services, the stuff that we concern ourselves with is much smaller than the volume traded for speculation. This is a real threat to the world banking system. In no small part this threat is due to the use of intermediary currencies. If we moved away from having a single currency having the lions share of global FX trading then we would see a decline in risk from speculation and we would not have the effects upon the 'real' economy that we saw in Russia last year where the changes were due not to fundamental issues but to speculation - borrowing money from the Russian banking system to bet against the ruble in a self perpetuating spiral. it was not until the RCB stepped in to reduce the profits from speculation that the process of wealth destruction in Russia ended.

We could do much worse than to render currency speculation much less profitable!

[NS1]

Hmmm I a have few US greenbacks, maybe I should hurry to the Bank and
change them in for Roubles or Yuan 

[Anteros]

Hmmm I a have few US greenbacks, maybe I should hurry to the Bank and
change them in for Roubles or Yuan 

Manny will be begging someone to take his Rubles as the price of oil is likely to go as low as $35 pretty soon.   

[B.B.]

Hmmm I a have few US greenbacks, maybe I should hurry to the Bank and
change them in for Roubles or Yuan 

Clearly, before they turn to dust.  If you're worried about 'stability' you might want to trade them for Euro, given how....

Oh, wait.  Nevermind.

 

B/B

[B.B.]

Dollar is still king in the banking world my friends, do not worry!

As I've said, I'm currently working in the International Banking and Payments Domain and see Dollars, Euro, some Sterling and Yen.

No frigging Roubles or Yuans, not saying they're not out there but really the only reason you'd align with these fragile currencies is down to sheer bloodymindedness and an optimistic view on risk.....

The world spins on its axis and takes little note of the affairs of men.

I started out working for a local company that was maybe 20 minutes from my house.  Since then, I've worked for a couple of Fortune 500s, a Scottish Bank (yes, THAT ONE, but not by choice), and now for another large international based out of East Asia.  Who knew?  Certainly my father could not have imagined it.  He though that NYC, where the ultimate parent of the firm he worked for (until he started his own) might as well have been in some far-distant land.

Meanwhile, those who bet on  Russia Japan China as the Great America-Slayer may want to hedge their bets on Modi's India...although I view the rise of other countries (in particular the creation of a 'middle class' therein) as simply future markets.

But what do I know?  My life is not affected by some sort of "revenge fantasy" worldview, either, praying for some comeuppance to be visited on someone else, regardless that it never seems to materialize....

B/B

[Anteros]

Dollar is still king in the banking world my friends, do not worry!

As I've said, I'm currently working in the International Banking and Payments Domain and see Dollars, Euro, some Sterling and Yen.

No frigging Roubles or Yuans, not saying they're not out there but really the only reason you'd align with these fragile currencies is down to sheer bloodymindedness and an optimistic view on risk.....

The world spins on its axis and takes little note of the affairs of men.

I started out working for a local company that was maybe 20 minutes from my house.  Since then, I've worked for a couple of Fortune 500s, a Scottish Bank (yes, THAT ONE, but not by choice), and now for another large international based out of East Asia.  Who knew?  Certainly my father could not have imagined it.  He though that NYC, where the ultimate parent of the firm he worked for (until he started his own) might as well have been in some far-distant land.

Meanwhile, those who bet on  Russia Japan China as the Great America-Slayer may want to hedge their bets on Modi's India...although I view the rise of other countries (in particular the creation of a 'middle class' therein) as simply future markets.

But what do I know?  My life is not affected by some sort of "revenge fantasy" worldview, either, praying for some comeuppance to be visited on someone else, regardless that it never seems to materialize....

B/B

That's what it all boils down to.  Putin is still annoyed that his former Soviet empire fell apart and he wishes there was no internet and other modern technologies to prevent his moves on the chessboard.  He never dreamed that economic sanctions and falling oil prices could destroy his delusional fantasies before they ever really got going.       

[Manny]

Hmmm I a have few US greenbacks, maybe I should hurry to the Bank and
change them in for Roubles or Yuan 

You should. You will probably make 25% on Roubles in the short term.

[B.B.]

Hmmm I a have few US greenbacks, maybe I should hurry to the Bank and
change them in for Roubles or Yuan 

You should. You will probably make 25% on Roubles in the short term.

I'd wait on that a bit.  If Yellen decides that the economy is ok (meaning U-3, mostly, b/c people vote) then the Fed will raise rates and thus the dollar will strengthen.  But we'll see. 

B/B

[Manny]

Hmmm I a have few US greenbacks, maybe I should hurry to the Bank and
change them in for Roubles or Yuan 

You should. You will probably make 25% on Roubles in the short term.

I'd wait on that a bit.  If Yellen decides that the economy is ok (meaning U-3, mostly, b/c people vote) then the Fed will raise rates and thus the dollar will strengthen.  But we'll see. 

B/B

I'll think of you when I spend my profit. I did £4k profit last time I called the Rouble a buy @ 97/£1, and you blokes said the Rouble would be tanking to 200/£1 plus - which it didn't.

Wifey is currently in Russia living like a queen as she got 2x as many Roubles as last year. For us, we are golden at circa 100/£1. If it comes back, we can sell some. If it doesn't, it makes for great value money on visits. Its a win-win, and one that encourages people to take money into Russia and buy the Rouble.

I'm not clamouring to buy dollars at $1.56/£1, y'know?

[JeanClaude]

That's what it all boils down to.  Putin is still annoyed that his former Soviet empire fell apart and he wishes there was no internet and other modern technologies to prevent his moves on the chessboard.  He never dreamed that economic sanctions and falling oil prices could destroy his delusional fantasies before they ever really got going.       

Thats how Reagan killed the old USSR, cheap oil -prices and high military spending,
.....No, it wasnt SDI

[msmoby]

Thats how Reagan killed the old USSR, cheap oil -prices and high military spending,
.....No, it wasnt SDI

JC it was a belief in SDI -Strategic Defense Initiative - Space based defence systems - that helped push the former USSR into further over-spending on research .... in ADDITION to conventional weapons and cheap oil...

[Steveboy]

Hmmm I a have few US greenbacks, maybe I should hurry to the Bank and
change them in for Roubles or Yuan 

You should. You will probably make 25% on Roubles in the short term.

I'd wait on that a bit.  If Yellen decides that the economy is ok (meaning U-3, mostly, b/c people vote) then the Fed will raise rates and thus the dollar will strengthen.  But we'll see. 

B/B

I'll think of you when I spend my profit. I did £4k profit last time I called the Rouble a buy @ 97/£1, and you blokes said the Rouble would be tanking to 200/£1 plus - which it didn't.

Wifey is currently in Russia living like a queen as she got 2x as many Roubles as last year. For us, we are golden at circa 100/£1. If it comes back, we can sell some. If it doesn't, it makes for great value money on visits. Its a win-win, and one that encourages people to take money into Russia and buy the Rouble.

I'm not clamouring to buy dollars at $1.56/£1, y'know?

Same for me! My wife just arrived back in Russia and is living like a Queen though she's been doing it for over 12 months now. I can't wait to get back myself next weekend and live like a king..

Tired of living like a peasant in England the last few weeks

[andrewfi]

Don't worry interest rates will not rise in the US for a while. The 'troubled' oil industry will be dead if they have to pay higher interest. The earliest that rates will rise will be after October - October is the month when many of the oil extractors will have had decisions on whether lending will be extended, rolled over or called in. Increasing rates before then would be death to that whole industry.

In addition, on a wider scale, in the new competitive devaluation environment, the last thing the US needs is to force the value of the dollar higher on their own behalf - bad enough that it is being forced by China and other Asian markets to do so.

Chances are that QE will be restarted before the end of the year in an effort to bring the dollar down to a less silly level.

By the way, while I don't use rubles, I do use euros and I have to say that life has gotten relatively inexpensive over here recently, at least when considered from the sterling perspective.

[msmoby]

You should. You will probably make 25% on Roubles in the short term.

Please let us know when the Rouble will be 'recovering' ..If we had listened to someone on here, we'd be 50 percent down.

[andrewfi]

You should. You will probably make 25% on Roubles in the short term.

Please let us know when the Rouble will be 'recovering' ..If we had listened to someone on here, we'd be 50 percent down.

You would have been down if you were stupid enough to treat currency trading as a long term investment. You would have been well up until July this year. Try to either be fact based or honest when making a point.

We get it, your standard operating procedure is to be dishonest, but do you really want to go through your life in that way? Is it really necessary to be dishonest in order to try to score a point?

Why not try for a mode of life based upon integrity and honesty? Life is easier that way,  truly!

[JeanClaude]

Thats how Reagan killed the old USSR, cheap oil -prices and high military spending,
.....No, it wasnt SDI

You as a physics layman might believe any nonsense, but we scientist know better.

Here are the main reasons why the USSR fell.
1: Socialism doesnt work
2: because altruism at gunpoint is not altruism
3: ISIS thinks sex at gunpoint (rape) is love making,  no wonder why muslims and leftist like each other so much...... birds of a feather.

There have been a number of books written (by Russians) explaining the fall of the USSR none of them mention SDI. Of course a lot of money was spent on SDI, so it had to be justified by the corporate welfare whores who benefited (hence the story you swallowed hook line and sinker).

http://www.worldology.com/Europe/Europe_Articles/causes_soviet_collapse.htm

[andrewfi]

Not socialism, but central planning. Socialism is at the heart of all modern societies to a greater or less (but always significant) degree.

Central planning works in a simple economic system and/or where there is an overriding objective to which all others are subjugated. That's why during WW2, for example, both the United States and the UK moved to a centrally planned model. The war could not have been won without doing so. Russia moved from a non-industrial, peasant economy to a modern (for the time) industrial economy wherein the living standards of most people rose immeasurably. What central planning could not do was manage the complexity of a consumer society wherein there exists a sufficient surplus of manufacturing and service capacity that consumers can have choices about how they spend the surplus money derived from the growing economy.

I confess to a degree of curiosity as to whether, given our current and future ability to manage huge amounts of date might at some point make a centrally planned economy feasible. It is clear that a market based economy is running toward the end of its ability to serve the needs of humanity and some new or modified paradigm is going to be required in order to manage our use of resources.

The effect of misdirected central planning was to misuse resources and misdirect output this led to under employment, sometimes called hidden inflation. This was the ruin of the Soviet Union - of course there were other factors that had they been mitigated might have delayed or changed the outcome. Perestroika, had it been fully implemented might have led to a similar system to that in China - I reckon the Chinese learned from Russia in this regard.

[msmoby]

You as a physics layman might believe any nonsense, but we scientist know better.

 I 'majored' in a science subject ..

Here are the main reasons why the USSR fell.
1: Socialism doesnt work
2: because altruism at gunpoint is not altruism
3: ISIS thinks sex at gunpoint (rape) is love making,  no wonder why muslims and leftist like each other so much...... birds of a feather.

There have been a number of books written (by Russians) explaining the fall of the USSR none of them mention SDI. Of course a lot of money was spent on SDI, so it had to be justified by the corporate welfare whores who benefited (hence the story you swallowed hook line and sinker).

http://www.worldology.com/Europe/Europe_Articles/causes_soviet_collapse.htm

a/ Just because one book omits fact - hardly makes  t the 'truth..

b/ what have IS got to do with the fall of the USSR, our 'still dating' homophobe ?

[B.B.]

I'll think of you when I spend my profit. I did £4k profit last time I called the Rouble a buy @ 97/£1, and you blokes said the Rouble would be tanking to 200/£1 plus - which it didn't.

I think you mean a different bloke than I.  I'm short Euro and long dollar at the moment, both positions are up for the year (the short Euro more, of course), but don't take positions in the Pyb.  I'm hoping for a bump in the dollar position after the Fed starts raising rates.  Currency plays are never long term positions, in any case.

Beyond that, back in January, a trade I know asked me about a refiner I had been in, but sold off.  I had another look at it, took a position, and it's up >27% since I bought it, so no complaints here. 

Beyond that, I usually dump my Hrv when I leave Ukr--keeping only a token amount for incidentals upon arrival for my next trip, if necessary, which it seldom is.

Most of the folks I use for services are happy to take greenbacks--back before the Bristol Hotel hooked up with Starwood (thus enabling me to burn points from my business travels for free rooms) my flat contacts were *happy* to take payment in USD (or Euro of course).  My driver in Kiev prefers dollars, as does both the guy I usually use in Odessa (as well as the taxista I use if something happens*)

In fact, I can't say I've ever had a problem using dollars, even where you can't, because it's illegal (or should I say "can't" because it's "illegal").  Typically, I use one of my cards that doesn't charge foreign transaction fees, but I've never had a kerfuffle that could not be quieted with Yankee Dollars.  *shrugs*

B/B


*How to tell you Spend Too Much Time in a Place: You know the taxistas at the airport by name, even if you seldom use them.