De-Dollarisation.

[andrewfi]

Whenever an intermediary currency is used in a transaction the costs increase. With the current volatility of the dollar the costs are magnified.

When transactions took a long time to be processed, days or even weeks, a stable intermediary currency made sense. Now, when a transaction is completed in microseconds the need for intermediaries is reduced.

Of course, for the currency previously used as intermediary there is a price to pay for not being the intermediary. Thus is not something that the intermediary currency issuer wants to see happen.

The current value of the ruble, or any other currency is not relevant here.

Transaction costs are the core issue. Although, of course, a desire to remove the dollar from the process is partly a reaction to political issues from the United States. I am certain though that if there was no practical alternative then this process would not be occurring.

It is likely that members of the EEU will, at some point in the not too distant future, form some kind of currency union, there is discussion of the topic but great concerns to not make the same errors as were made in the EU with the Euro.

[Ste]

I think basically the rouble is doing so poorly because nobody wants it...

rocketscience.com, derr...


.

[andrewfi]

I think basically the rouble is doing so poorly because nobody wants it...

rocketscience.com, derr...


.

Doing so badly compared to what?

Don't make the mistake of thinking of relative currency values as analogous to a league table,  it isn't so.

Think instead of a currency exchange rate as an expression of price. Price reflects both value and strategy. There are times when one wants to sell at a high price and others when one absolutely does not. So, to take the currencies dollar and ruble: right now,  in some pairings the ruble has a lower price and in many cases the dollar has a high price compared to some point in the past.

However, US monetary policy is to get the value of the dollar down because right now it's price is too high. Problem is that even with almost zero interest rates they can't force the price down. Other countries including China and Russia are forcing the dollar price up as a matter of policy. The strategy has clear benefits to those countries and currencies. The policy of forcing the US into a position that does not suit it is a win for those so called 'weak'  currencies.

So, in most things do we regard the winner as the party that gets what they want or the party that doesn't?
Where I come from we tend to assume the 'winner' is the team/person/business that gets what they want and the loser is the one that does not get what they want.

There's more to it than that,  of course, but for sure having a high exchange rate compared over time to some other currency is far from being a universally good thing. Remember that devaluation and moving away from a fixed rate against the dollar is a matter of long term economic policy for both Russia and China.

[tfcrew]

The weakness of the rouble is relatively temporary.

Will it ever go back to the 2011 value?

 

  By Marc Bennetts — Special to The Washington Times - - Monday, August 31, 2015

MOSCOW — Irina Tashaeva, a 35-year-old housewife, has made a habit of checking world oil prices as she sits down to breakfast in her Moscow apartment.

“I never used to pay any attention at all,” she said. “But now I realize that the price of oil is directly linked to how well my family lives.”

Ms. Tashaeva is not the only Russian with both eyes on the global market for oil, which has fallen in just 12 months from $104 a barrel to around $50.

http://www.washingtontimes.com/news/2015/aug/31/russia-economy-shoppers-hit-by-falling-global-oil-/?utm_source=RSS_Feed&utm_medium=RSS

Nasdaq put oil today at $45.41

[Anteros]

The weakness of the rouble is relatively temporary.

Will it ever go back to the 2011 value?

 

  By Marc Bennetts — Special to The Washington Times - - Monday, August 31, 2015

MOSCOW — Irina Tashaeva, a 35-year-old housewife, has made a habit of checking world oil prices as she sits down to breakfast in her Moscow apartment.

“I never used to pay any attention at all,” she said. “But now I realize that the price of oil is directly linked to how well my family lives.”

Ms. Tashaeva is not the only Russian with both eyes on the global market for oil, which has fallen in just 12 months from $104 a barrel to around $50.

http://www.washingtontimes.com/news/2015/aug/31/russia-economy-shoppers-hit-by-falling-global-oil-/?utm_source=RSS_Feed&utm_medium=RSS

Nasdaq put oil today at $45.41

If we get a pro-business person in the White House and the USA could export oil we could really do some economic damage to those whose economy is so one dimensional. 

[Anteros]

Putin says dump dollar

Russian President Vladimir Putin has drafted a bill that aims to eliminate the US dollar 

Well, yeah.
Could this be why?------------

As the the ruble goes in the toilet...........

1 US Dollar equals
66.59 Russian Ruble

Not really, it has been underway for some time. The weakness of the rouble is relatively temporary.

This would be true if Russia had a reformer at the helm, such as Medvedev.  Someone who would invest in Russian infrastructure and encourage investment from the West.  Someone who would have continued the prior efforts to make Russian property laws and other laws fair instead of favored to those with connections or willing to pay bribes.

Putin can move to claim areas of the Arctic and those are good moves however the Russian economy would be much better if they were still getting the latest oil-drilling technologies from the West.

[AvHdB]

Most of the folks I use for services are happy to take greenbacks

You can spend them still in Ukraine?

Yes. Not sure what the problem you feel is with greenback.

I exchanged both $ (US) and € with out problem earlier this year. The person in the both noticed I had some Koruna and she gave me a favorable rate of exchange for these notes as well. The next client had rubles and it seemed allot more difficult, many notes were rejected.

[bagalia]

Wherever there is a dollar there will be a person wanting to make a profit from it. The fewer there are, the larger the profit. It will be like guns in America. Putin will need to pry them from the dead hands of little old pensioners.

[Anteros]

Wherever there is a dollar there will be a person wanting to make a profit from it. The fewer there are, the larger the profit. It will be like guns in America. Putin will need to pry them from the dead hands of little old pensioners.

True, but more importantly he will need to pry them from the hands of Oligarchs, and he's failed to do so.

[Manny]

Most of the folks I use for services are happy to take greenbacks

You can spend them still in Ukraine?

Yes. Not sure what the problem you feel is with greenback.

I exchanged both $ (US) and € with out problem earlier this year. The person in the both noticed I had some Koruna and she gave me a favorable rate of exchange for these notes as well. The next client had rubles and it seemed allot more difficult, many notes were rejected.

"Spending" is not the same as "Exchanging".

[Manny]

encourage investment from the West. 

The west is the last place Russia will be looking for inward investment for decades. The sanctions malarkey has shown the west to be an unreliable partner. The west is now for selling stuff to.

The Q&A yesterday shows quite clearly where they are heading: http://en.kremlin.ru/events/president/news/50207

[Markje]

The Q&A yesterday shows quite clearly where they are heading: http://en.kremlin.ru/events/president/news/50207

Interesting quote from Putin:

Among the endemic problems is the persistent desire of certain states to retain their dominance in global affairs at any cost. While declaring norms of democracy, supremacy of law and human rights in their own countries, they ignore the same on the international arena, actually denouncing the principle of sovereign equality of all states laid down in the UN Charter.

[msmoby]

Interesting quote from Putin:
''Among the endemic problems is the persistent desire of certain states to retain their dominance in global affairs at any cost. While declaring norms of democracy, supremacy of law and human rights in their own countries, they ignore the same on the international arena, actually denouncing the principle of sovereign equality of all states laid down in the UN Charter.''

Hmm, it looks like no-one in his speech writing team had their irony sensors tuned in.... 

[AvHdB]

Most of the folks I use for services are happy to take greenbacks

You can spend them still in Ukraine?

Yes. Not sure what the problem you feel is with greenback.

I exchanged both $ (US) and € with out problem earlier this year. The person in the both noticed I had some Koruna and she gave me a favorable rate of exchange for these notes as well. The next client had rubles and it seemed allot more difficult, many notes were rejected.

"Spending" is not the same as "Exchanging".

Because Julia, has both a brother and uncle in Moscow so she often has rubles. In shops in Kiev the owners often refused accepting this 'currency'. A greenback or a door note is welcomed.

Perhaps you can share your most recent expierence in Kiev with currency?

[andrewfi]

encourage investment from the West. 

The west is the last place Russia will be looking for inward investment for decades. The sanctions malarkey has shown the west to be an unreliable partner. The west is now for selling stuff to.

The Q&A yesterday shows quite clearly where they are heading: http://en.kremlin.ru/events/president/news/50207

To be fair, there is quite a lot of inward investment going on from western firms right now - some in clear contravention of the principles of the illegal sanctions. Russia welcomes this because they are now following the Chinese model under which investments become both money and technology. At this time they are not insisting upon joint ventures as they Chinese did, although, in practice, many of these ventures are JVs.

[Anteros]

encourage investment from the West. 

The west is the last place Russia will be looking for inward investment for decades. The sanctions malarkey has shown the west to be an unreliable partner. The west is now for selling stuff to.

The Q&A yesterday shows quite clearly where they are heading: http://en.kremlin.ru/events/president/news/50207

The West is entirely reliable provided that Russia were following International Law.  I should not need to remind you how many countries voted for the UN resolution condemning the annexation of Crimea.  And yet I believe that Obama and others in the West would have allowed the sanctions to expire if there had not been clear evidence of further meddling by Russia with the sovereignty of Ukraine by their invasion of Lugansk and Donetsk with thousands of troops and tanks, the ones you claim are not there.

In other words I suspect the West would have slowly accepted Crimea if that was all there had been, but unfortunately it was not.

Either way your statement begs an answer.  Does Russia now believe that there is a new cold war, and that all possibilities of any further cooperation with the West is kaput?  Just curious what your opinion is on that.  Clearly the Russian oil drilling industries could benefit from the latest Western technologies.

[Manny]

The West is entirely reliable provided that Russia were following International Law.  I should not need to remind you how many countries voted for the UN resolution condemning the annexation of Crimea.  And yet I believe that Obama and others in the West would have allowed the sanctions to expire if there had not been clear evidence of further meddling by Russia with the sovereignty of Ukraine by their invasion of Lugansk and Donetsk with thousands of troops and tanks, the ones you claim are not there.

Here, we are just *miles* apart on every level, so no point in debating that paragraph.

In other words I suspect the West would have slowly accepted Crimea if that was all there had been, but unfortunately it was not.

It matters not if the "west" accepts Crimea is now in Russia. It is and will stay there. They will in time. Italy, France and others have done so already.

Does Russia now believe that there is a new cold war,

There is, and Russia didn't choose it.

and that all possibilities of any further cooperation with the West is kaput?  Just curious what your opinion is on that. 

Well, the west is not one entity. Co-operation with the US will be on a quid pro quo basis for the foreseeable future. It very much depends how the next president handles the relationship with Russia. Europe will come back to Russia faster as we are starting to see.

Clearly the Russian oil drilling industries could benefit from the latest Western technologies.

And the US needs Russian technology/engines/co-operation with space stuff. And maybe to fight ISIS too. Its all an exchange of value isn't it? The world is no longer uni-polar. Russia wont be bullied. Once the US catches on to that idea it will co-operate with Russia and China just as it has done with Cuba and Iran (where decades of sanctions changed nothing). All sides need something the other has, and that is the *best* basis of ongoing peace.

De-dollarisation wont go away though. That is a long-term, well thought out plan with a firm objective that must succeed. Many countries are now on-board (including biggest economy, biggest country and most populous countries). That wont go away. It might take 20 years to complete, but it needs to happen. The power structure in the world needs to change and the constant US wars and regime changes needs to be stopped. The only way to do that without a major war is to reduce dollar usage and kill US power with economics. It will probably implode the American economy in the process, but it is what it is.

[Anteros]

The West is entirely reliable provided that Russia were following International Law.  I should not need to remind you how many countries voted for the UN resolution condemning the annexation of Crimea.  And yet I believe that Obama and others in the West would have allowed the sanctions to expire if there had not been clear evidence of further meddling by Russia with the sovereignty of Ukraine by their invasion of Lugansk and Donetsk with thousands of troops and tanks, the ones you claim are not there.

Here, we are just *miles* apart on every level, so no point in debating that paragraph.

In other words I suspect the West would have slowly accepted Crimea if that was all there had been, but unfortunately it was not.

It matters not if the "west" accepts Crimea is now in Russia. It is and will stay there. They will in time. Italy, France and others have done so already.

Does Russia now believe that there is a new cold war,

There is, and Russia didn't choose it.

and that all possibilities of any further cooperation with the West is kaput?  Just curious what your opinion is on that. 

Well, the west is not one entity. Co-operation with the US will be on a quid pro quo basis for the foreseeable future. It very much depends how the next president handles the relationship with Russia. Europe will come back to Russia faster as we are starting to see.

Clearly the Russian oil drilling industries could benefit from the latest Western technologies.

And the US needs Russian technology/engines/co-operation with space stuff. And maybe to fight ISIS too. Its all an exchange of value isn't it? The world is no longer uni-polar. Russia wont be bullied. Once the US catches on to that idea it will co-operate with Russia and China just as it has done with Cuba and Iran (where decades of sanctions changed nothing). All sides need something the other has, and that is the *best* basis of ongoing peace.

De-dollarisation wont go away though. That is a long-term, well thought out plan with a firm objective that must succeed. Many countries are now on-board (including biggest economy, biggest country and most populous countries). That wont go away. It might take 20 years to complete, but it needs to happen. The power structure in the world needs to change and the constant US wars and regime changes needs to be stopped. The only way to do that without a major war is to reduce dollar usage and kill US power with economics. It will probably implode the American economy in the process, but it is what it is.

Go Trump!  He says he could deal with Putin, and whatever that means, maybe he can!  He's a businessman, he's motivated by money and success and I doubt he would resort to war.  So let's hope Trump is the guy!   

[Manny]

Go Trump!  He says he could deal with Putin, and whatever that means, maybe he can!  He's a businessman, he's motivated by money and success and I doubt he would resort to war.  So let's hope Trump is the guy!   

Y'know, I don't know so much about internal US day-to-day stuff, Obamacare, race relations, cop shootings and all that, but internationally, Trump is your best bet. Trump has a better chance of finding common ground with Putin than any of those other Muppets that seem to be in the race. Y'all *really* want to elect ANOTHER Clinton or Bush for more of the same? Really? 

Trump talks some crap, is crude and uncultured, and is winging it much of the time, but like any businessman, when sat down, he will find common interests. Imagine a politician who loves his country and cannot be bought by pressure groups and lobbyists? That is why I like Trump - he is uncorruptible. He has a chance of finding common ground with Russia. Probably based on trade. You may all be buying Ladas - assembled in America -  in five years.

It wont change the de-dollarisation plan though.

[Anteros]

Go Trump!  He says he could deal with Putin, and whatever that means, maybe he can!  He's a businessman, he's motivated by money and success and I doubt he would resort to war.  So let's hope Trump is the guy!   

Y'know, I don't know so much about internal US day-to-day stuff, Obamacare, race relations, cop shootings and all that, but internationally, Trump is your best bet. Trump has a better chance of finding common ground with Putin than any of those other Muppets that seem to be in the race. Y'all *really* want to elect ANOTHER Clinton or Bush for more of the same? Really? 

Trump talks some crap, is crude and uncultured, and is winging it much of the time, but like any businessman, when sat down, he will find common interests. Imagine a politician who loves his country and cannot be bought by pressure groups and lobbyists? That is why I like Trump - he is uncorruptible. He has a chance of finding common ground with Russia. Probably based on trade. You may all be buying Ladas - assembled in America -  in five years.

It wont change the de-dollarisation plan though.

You were talking a lot of sense, then you had to go and throw in that last statement which I bolded.   

The Dollar may yet fall out of favor on the World stage, but it won't be Russia or China which brings it's demise, it'll be the likes of another Clinton or Obama who bankrupts us!

[cufflinks]

By then - 20 years or so we will have invaded the lawless narco terrorists Latin Central and South Americas and forced Law and Order down their murderous throats (150,000 People Killed and Missing in mass graves) by President Trump and we will have adopted the Sovereign Currency the Amero across all the Americas from Alaska to Ottawa to NYC to Patagonia...

A One Billion persons Americas Trading Block is the only real way to fight the massive Asian invasion and even more stark European capitulation.

[AvHdB]

It wont change the de-dollarisation plan though.

You were talking a lot of sense, then you had to go and throw in that last statement which I bolded.   

The Dollar may yet fall out of favor on the World stage, but it won't be Russia or China which brings it's demise, it'll be the likes of another Clinton or Obama who bankrupts us!

In a sense Anteros you are correct, American will shot itself in the foot. But to blame Bill Clinton is unfair. We had a decent balance of trade and infact virtually no deficit at the end of his presidency.

I suspect Manny's dislike of Bill Clinton is for an entirely different reason. And no it was not because he had a cigar fetish.

Mod edit to correct quotes

[Anteros]

Go Trump!  He says he could deal with Putin, and whatever that means, maybe he can!  He's a businessman, he's motivated by money and success and I doubt he would resort to war.  So let's hope Trump is the guy!   

Y'know, I don't know so much about internal US day-to-day stuff, Obamacare, race relations, cop shootings and all that, but internationally, Trump is your best bet. Trump has a better chance of finding common ground with Putin than any of those other Muppets that seem to be in the race. Y'all *really* want to elect ANOTHER Clinton or Bush for more of the same? Really? 

Trump talks some crap, is crude and uncultured, and is winging it much of the time, but like any businessman, when sat down, he will find common interests. Imagine a politician who loves his country and cannot be bought by pressure groups and lobbyists? That is why I like Trump - he is uncorruptible. He has a chance of finding common ground with Russia. Probably based on trade. You may all be buying Ladas - assembled in America -  in five years.

It wont change the de-dollarisation plan though.

You were talking a lot of sense, then you had to go and throw in that last statement which I bolded.   

The Dollar may yet fall out of favor on the World stage, but it won't be Russia or China which brings it's demise, it'll be the likes of another Clinton or Obama who bankrupts us!

AvHdb, for some unknown reason you just attributed a quote made by Manny to me and my quote to Manny [edit - now fixed].  I'm assuming you're just bored and want to see if I would notice?   


PS... both Manny and I were referring to "another Clinton" meaning Hillary Clinton, not Bill.

[AvHdB]

AvHdb, for some unknown reason you just attributed a quote made by Manny to me and my quote to Manny [edit - now fixed].  I'm assuming you're just bored and want to see if I would notice?   


PS... both Manny and I were referring to "another Clinton" meaning Hillary Clinton, not Bill.

Mods, my excuses & thank you. Since the reference was clear to past & present president(s). One most assume Bill. As far as I know the carpet muncher is not yet in the White House as (um) commander and chief.

[Anteros]

AvHdb, for some unknown reason you just attributed a quote made by Manny to me and my quote to Manny [edit - now fixed].  I'm assuming you're just bored and want to see if I would notice?   


PS... both Manny and I were referring to "another Clinton" meaning Hillary Clinton, not Bill.

Mods, my excuses & thank you. Since the reference was clear to past & present president(s). One most assume Bill. As far as I know the carpet muncher is not yet in the White House as (um) commander and chief.

Hopefully she (Hillary) will soon be under indictment by the FBI and any delusions of being in the White House will be over for her.  The USA needs a pro-business President to turn our economy around.