Tag Archives: Currency Wars

Russia’s new Eurasian Economic Union could get its own single currency

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“The union is still in its early days, having formally begun only in January, but the bloc has tentatively agreed to bring in a single currency and a Eurasian Central Bank by 2025. Belarus’ Mikhail Myasnikovich, prime minister until 2014, is calling for the process to be fast-tracked so the currency is ready in the next four years, according to Belarusian state news.  And Putin instructed Russia’s central bank earlier this month to work with both the government and other central banks ‘to determine the future direction of integration in the monetary and financial sectors in the framework of the Eurasian Economic Union with the study of the feasibility of establishing in the future monetary union.'”

http://www.businessinsider.com/russia-eurasian-economic-union-could-get-its-own-single-currency-2015-3

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IMF says Chinese yuan on path to inclusion in SDR basket

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“China’s economic reform plans, including opening up its capital account and deepening financial markets, should help Beijing meet the IMF’s criteria to join its Special Drawing Rights currency basket, the head of the IMF said on Thursday.  International Monetary Fund Managing Director Christine Lagarde earlier this year said it was a question of when, not if, China’s yuan will be included in the SDR basket – currently made up of dollars, yen, pounds and euros.  The IMF is due to review the basket’s composition later this year to assess whether any currencies meet its criteria, including being ‘freely usable,’ or convertible – seen as a key obstacle for the yuan, also known as the renminbi.”

http://www.reuters.com/article/2015/04/16/imf-g20-china-idUSL2N0XD1LI20150416

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Ukraine’s Economic Blockade Boosts Bitcoin Usage in Separatist East

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“This is the first time in modern history when such a large swathe of territory with a pre-war population of 3.8 million people has been left with no banking services whatsoever. All business and personal accounts were closed and ATMs stopped operating leaving businesses and millions of people without any means of accessing their money. CoinTelegraph spoke with the Head of the Cryptocurrency Foundation Russia (CCFR), Igor Chepkasov on how cryptocurrencies are being used in these runaway regions and whether the Ukrainian or Russian governments are capable of doing anything to stop this.”

http://cointelegraph.com/news/113926/kievs-economic-blockade-boosts-bitcoin-usage-in-separatist-east

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Jim Rogers on Opportunities in Russia and Other Hated Markets

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“I’m an American citizen like you, and unfortunately the bigger picture is forcing the Russians, the Chinese, and others to accelerate in finding an alternative. That is not good for the US.  The Americans have a monopoly, because everyone who uses dollars has to get them cleared through New York. People were already starting to worry in the past few years about the American dominance of the system and its ability to just close everything down.  So now the Russians and Chinese and others are accelerating their efforts to find an alternative to SWIFT and to the American dollar and the dominance of the US financial system.  As I said earlier, none of this is good for the US.”

http://www.internationalman.com/articles/jim-rogers-on-opportunities-in-russia-and-other-hated-markets

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How Long Can Central Banks Push Bonds to Absurdity?

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“By throwing free money around that has to go somewhere,and by making leverage essentially free, central banks have catapulted asset prices into absurdity. They have created a mechanism by which governments and corporations can load up on debt without paying the otherwise normal costs of capital, and sometimes at an outright profit, while at the same time depriving those whose money this is – regular investors, pension funds, savers, and others – of a return. Confiscation comes to mind.  But there are costs. It saddles these governments and corporations with a future problem: debt doesn’t just go away. It has to be rolled over (or be paid off, a novel concept in these circles).”

http://wolfstreet.com/2015/02/04/how-long-can-central-banks-push-bonds-to-absurdity/

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The World’s Central Banks Blink

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“More than six years after the onset of the Global Financial Crisis, central banks are being forced to fight a sudden battle against disinflation amid the ongoing silent war against deflation.  Over the past couple of weeks, a number of central banks have shifted to a dovish stance on the future direction of interest rates, if not outright monetary easing.  Although the slowing global economy is the primary factor behind their about-face in policymaking, the collapse in crude oil prices along with anticipation of other central banks’ future moves is what’s driven their timing.  Many of these moves have caught a lot of people, including traders, economists and other financial experts, by surprise.”

http://www.investingdaily.com/22052/the-worlds-central-banks-blink-2/

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Russia Adds to World’s Fifth-Biggest Gold Reserves for 9th Month

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“Russia is showing no signs of slowing gold purchases as the fifth-biggest holder boosted reserves for a ninth month.  The country’s gold reserves rose to about 38.8 million ounces as of Jan. 1 from 38.2 million ounces a month earlier, the central bank said today on its website. It’s the longest stretch of monthly increases since August 2013, data from the International Monetary Fund show.  Russia has more than tripled its gold hoard since 2005 and holds the most since at least 1993, even as it recently had to use its international reserves to defend the ruble.  The precious metal accounts for about 11 percent of Russia’s total foreign reserves, according to the London-based World Gold Council.”

http://www.bloomberg.com/news/2015-01-22/russia-adds-to-world-s-fifth-biggest-gold-reserves-for-9th-month.html

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Jim Rogers On Putin, Oil Prices, And A 26-Year-Old’s Advantage

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“To Russia’s credit, Russia has not been sitting around supporting the ruble in any big way. My view of markets is you let them clean themselves out, let the system find a clearing price. To my astonishment, the Russians are being more capitalist than the Western capitalists. They are letting the currency find its own bottom. That will change soon. It will find its own bottom, and then Russia will be a good place to invest.  I was bearish on Russia for 46 years. I went to Russia in 1966 and came away with the idea that this will not work; this cannot work. And only in the last couple of years have I realized that something was going on and changing at the Kremlin.”

http://www.businessinsider.com/jim-rogers-on-oil-russia-investing-mistakes-2014-11

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Soros’ Miraculous Escape From Being Crushed By Swiss National Bank

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“Soros Fund Management, which manages more than $25 billion for investor George Soros, was betting against the Swiss franc in the fall before it removed those bearish positions.  Why did the Soros so conveniently take off a bet which, with leverage, could have resulted in massive losses for his hedge fund? The WSJ says he did so after ‘viewing the risk as too high relative to potential gains, said people close to the matter.’ Well as long as ‘people close’ think Soros did not have input directly from the Swiss central bank, or perhaps the occasional hint from Kashya Hildebrand, then one can’t help but marvel at the octogenarian’s impeccable timing.”

http://www.zerohedge.com/news/2015-01-23/how-swiss-national-bank-almost-crushed-george-soros

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Saxo Bank faces £70m losses after Swiss currency turmoil

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“Just over a week ago, the Swiss National Bank shocked markets by announcing that, with immediate effect, it would no longer fix its currency – the franc – against the euro.  That led to a surge in the value of the franc against the euro, at one point by 30%.  It also caught some currency brokers by surprise – many of whose customers could not afford to settle their accounts.  The broker Alpari UK, which sponsors West Ham United football club, collapsed into administration as a result, while IG Index said its potential losses were £30m.  Now the Danish-controlled Saxo bank said that its losses could reach about £70m.”

http://www.bbc.co.uk/news/business-30960558

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