Tag Archives: Currency Wars

Iceland Brings In Experts to Help Lift Capital Controls

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“Iceland imposed restrictions on the movement of capital into and out of the country in 2008 after its three largest banks—Landsbanki, Kaupthing and Glitnir—collapsed. Their combined assets were about nine times the tiny island nation’s gross domestic product, currently roughly $15 billion.  The government is concerned that if the deal with creditors is struck in the wrong way then creditors taking their recovered kronur out of Iceland could destabilize the economy, not least by undermining the value of the currency. That could trigger negative effects such as a fresh round of spiraling inflation like the economy saw during the financial crisis.”

http://online.wsj.com/articles/iceland-brings-in-experts-to-help-lift-capital-controls-1404979518

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Singapore’s central bank lost $10.2 billion fighting Bernanke [2013]

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“Four men control over 70% of the world’s money supply, giving them control over the price of… everything.  And this system is so absurd that, healthy nations like Singapore are forced to lose billions in order to keep playing the game.  That’s exactly what it is– a game. Like most nations, Singapore has been playing this game for decades while the US changes the rules whenever it sees fit.  And it’s becoming obvious that the cost of playing is now far exceeding the benefit it receives. The hard numbers are very clear on this point.  This spells one inexorable conclusion, game over: a dramatic decline in the US dollar’s role as the global reserve currency in the next few years.”

http://www.sovereignman.com/trends/singapores-central-bank-lost-87-of-gdp-growth-fighting-bernanke-12665/

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India central bank chief warns of another market crash

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“‘True, it (another financial sector crisis) may not happen if we can find a way to unwind everything steadily,’ Rajan, who is famed for predicting the 2008 markets crash years in advance, said in the interview posted late Wednesday on the journal’s website.  ‘But it is a big hope and prayer,’ said the Reserve Bank of India (RBI) governor, adding there is a risk of sudden price reversals and sharp spikes in financial volatility.  ‘We are back to the 1930s, in a world of ‘competitive easing’,’, Rajan said, referring to ultra-low interest rate policies pursued by the US Federal Reserve, the Bank of Japan and the Bank of England in a bid to stimulate their economies and spur growth.”

http://finance.yahoo.com/news/india-central-bank-chief-warns-another-market-crash-190447924–finance.html

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Jim Rogers: Russian/Chinese/Brazil currency can battle dollar dominance

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“The presidents of Russia and Brazil have met ahead of the BRICS Summit. Vladimir Putin and Dewma WHO-sseff were present as some of the two countries’ largest corporations signed agreements to deepen the economic ties between the two.  Corporate investor Jim Rogers tells RT that the BRICS members are capable of challenging the United States’ financial dominance.”

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American Airlines cuts Venezuela flights after Maduro threat

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“American Airlines says it is cutting almost 80% of its flights to Venezuela from next month.  Tight foreign currency controls make it difficult for foreign airlines to repatriate money from ticket sales in Venezuela.  The authorities have restricted access to dollars and want to make them more expensive to purchase, which may lead to losses for companies that are still waiting for cash from as far back as 2012.  In January, Ecuadorean airline Tame also suspended flights to Venezuela, demanding $43m (£26m) in overdue payments for tickets.  President Nicolas Maduro said at the time that airlines that reduced their operations in Venezuela would face ‘severe measures’.”

http://www.bbc.com/news/world-latin-america-27895233

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Why the Resource Supercycle Is Still Intact

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“Strengthening copper prices, for example, do not immediately result in increased copper production in many market cycles, because the production cycle requires new deposits to be discovered, financed, and constructed—a process that can consume a decade.  Price declines—even declines below the industry’s total production costs—do not immediately cause massive production cuts. The ‘sunk capital’ involved in discovery and construction of mining projects and attendant infrastructure (such as smelters, railways, and ports) causes the industry to produce down to, and sometimes below, their cash costs of production.”

http://www.caseyresearch.com/articles/why-the-resource-supercycle-is-still-intact

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U.S. Regulators Mull Yanking Access To USD As Punishment For Banks

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“BNP Paribas is expected to plead guilty in the coming weeks to charges that it processed payments for companies and countries that were subject to United States sanctions.  BNP Paribas is also expected to pay financial penalties of about $8 billion, which would leave a sizable, though manageable, dent on its balance sheet.  Despite those potential punishments, some regulators want to do more.  Specifically, Benjamin M. Lawsky, New York State’s top financial regulator, is considering whether to temporarily suspend BNP Paribas’s ability to process dollar payments, according to people briefed on the settlement talks.”

http://dealbook.nytimes.com/2014/06/03/regulators-explore-options-for-suitable-penalties-in-bnps-sanctions-inquiry/?_php=true&_type=blogs&_r=0

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The US and China: A Difference in Approaches

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“The threat from the US sheriff is very real.  But presumably, this bullying approach would be less effective if attempted against one of the world’s more powerful countries. If, for example, the US were to find itself in a situation such as the present one with China, in which the US appeared to be losing its battle over the dollar’s power as the world’s reserve currency, what would occur? Would the US sheriff attempt to bully China? And if the ploy did not succeed, would the US draw its six-guns and fire off a few rounds in the air for emphasis?  And if the above were to take place, what would the Chinese reaction be?”

http://www.internationalman.com/articles/the-us-and-china-a-difference-in-approaches

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Putin, gold and silver: What you need to know right now

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“During not-so-normal times like we have today, the flow of capital is what determines major market moves.  Not supply/demand fundamentals. Not GDP, inflation, central bank policies.  Not even price-to-earnings ratios, or corporate balance sheets or anything most analysts use to predict market movements.  It’s capital flows, from one nation to another, from one stock market to another, from one savvy investor’s pockets to any investment that can help that investor get their money to safety, off the grid to a market that is liquid, that offers a decent chance at some type of return, and where preservation of capital is also of utmost importance.”

http://www.moneyandmarkets.com/putin-gold-and-silver-what-you-need-to-know-right-now-60797

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The Decline of the Petrodollar

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“The most interesting part of all of this isn’t what Russia is doing … it’s how America is responding.  The White House and many of our Senators have gone into panic mode. They’re anxiously trying to block the Iranian transaction by threatening — yes, as ignorant as it is — more sanctions. Recent headlines also report that ‘U.S. has conveyed concerns to Iranian government through all channels.’  Why is that?  Why would the U.S. care about an oil trade that represents just 0.5% of all the oil that’s consumed in a given day?  Because it exposes America’s single greatest weakness — a weakness that, if truly exploited, would bring down our country.”

http://thesovereigninvestor.com/2014/04/10/decline-petrodollar/

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