Vollständige Version anzeigen : USD-Crashindex-Tread

29.12.2002, 11:03
:D "from a long bull to a bloddy bear" :D

The Long-Term Dollar Bear
Steve Saville
16 December, 2002

Last Thursday it was reported that the US current account balance for the 3rd quarter of this year was a deficit of $127B, about the same as the all-time high reached during the second quarter. Despite this huge out-flow of money from the US each quarter, the US Dollar Index has only fallen by around 15% from last year's major peak. Dollar bulls say this is a sign of US strength (the bullish argument is that the current account deficit is a result of the enormous foreign investment demand for US Dollars and that this demand is likely to persist). Others argue that the US$ remains relatively firm by default, that is, it hasn't collapsed because the main alternatives - the euro and the Yen - are unattractive. Both arguments are wrong.

The massive US current account deficit hasn't led to a massive decline in the US$ yet because we are still in the early stages of a new cycle. As sure as night follows day (well, maybe not quite that sure) the US$ will continue to fall...and fall...and fall...until the US current account moves back into surplus. Based on where we are today it is difficult to believe that the US will ever have a current account surplus again, but it will happen.

Below is a chart comparing the US quarterly balance on current account with a trade-weighted index of the US Dollar's exchange value relative to other major currencies, beginning in 1973. The shaded areas on the chart cover the periods from major US$ peaks to major US$ troughs. Prior to last year there had been 2 major peaks since 1973 - one in early-1977 and one in early-1985. In both of these cases the preceding uptrend in the Dollar had been accompanied by the current account moving into deficit. In 1977 the current account deficit was small and it only took a 16% fall in the US$ over 2 years to bring the account back into surplus. In 1985 the current account deficit was much larger and it took a 40% fall in the dollar over 6 years to bring the account back into surplus. In both cases the current account moved further into deficit during the initial phase of the dollar's decline and in both cases the dollar continued to decline until the current account had moved into surplus.


We can't think of any reason why it is going to be different this time. From a long-term perspective we should therefore remain bearish on the US$ and bullish on those things that benefit from a weaker US$ (e.g., gold) until the US current account has moved back to a surplus. Furthermore, given that the present deficit is far greater than anything seen in the past it is likely that the dollar bear-market that began last year will result in a drop, from peak to trough, of substantially more than the 40% drop that occurred during 1985-1990.

The Dollar's bear market is probably going to extend for many years, but as is always the case during any long-term trend there will, from time to time, be substantial counter-trend moves. In other words, if we are right that the US$ has embarked on a long-term bear market there will still be periods, possibly quite lengthy periods (6-12 months or longer), during which the Dollar will trend higher and those investments that benefit from a weaker Dollar will trend lower.

As mentioned in last week's commentary the currency market is presently set-up for a US$ selling climax to occur over the next 1-2 months, after which a large counter-trend move would become likely. Our current medium-term target for the Dollar Index, a target that was first broached in our 2nd October commentary, is the 1998 low of around 90 (see chart below). We expect the Dollar to reach this target by the end of March next year and wouldn't be surprised if it were reached as early as next month. We will, however, need to be alert to the possibility that support defined by the 1999 low will hold.


In our 2nd December commentary we said "gold stocks [are expected] to provide the early warning signal because gold is likely to move in advance of breakouts in the CRB Index and the Dollar, and gold stocks are likely to move in advance of gold." We were referring to the likelihood that gold stocks would break out to the upside ahead of an upside breakout in the gold price, which would, in turn, occur ahead of an upside breakout in the CRB Index and a downside breakout in the Dollar. We expect gold stocks to show similar leadership near the end of the current gold rally and dollar decline, that is, gold stocks should turn lower prior to a peak in the gold price and a bottom in the US$.

Regular financial market forecasts and analyses are provided at our web site:

Quelle (http://www.321gold.com/editorials/saville/saville121602.html)

90 till I die :rofl!

syr :lach

29.12.2002, 14:22
Is The Greenback In Trouble?

Philip Gotthelf

Despite mounting opposition to war with Iraq, the Bush Administration is intent upon bringing Saddam "to justice." The resulting rhetoric has dimmed the global community's view of the United States as reflected by the dollar's recent performance. However, a pending conflict is not the only reason dollar parity has deteriorated. Although U.S. corporate scandals are not unique, they have taken center stage in the European community as an indication of our (the U.S.) indifference to corruption. The preacher, as it were, has failed to practice what has been preached.

Subtle hints of isolationism include our move to install a missile defense system in Alaska. The implication is that the C.I.S. remains an enemy. Our "no confidence" vote at the very time Western Europe is relying upon Russia as a new eco-political ally leaves the U.S. out in left field...or completely out of the game. Our unilateral buildup in preparation for war raises questions about our willingness to cooperate with the world community. "We know and you don't," has been the U.S. mantra. We have an attitude problem.

Consider the impact upon the Dollar Index. After establishing a healthful trading range between 10700 and 10950, a lack of faith busted March futures below the 10700 support. Technically, 10700 should provide resistance if we have, in fact, violated the range.

It appears clear that November's rally attempted to reestablish the range. Recall that analysts predicted the Dollar index free fall from more than 12000 in April to 10750 was "overdone." Alleged signs of U.S. economic recovery were supposed to drive the index back above 10700 to a projected 11000/11300.

Anemic U.S. interest rates and stalled corporate performance worked against the November rally. Now, foreign and domestic investors are worrying that the holidays did not produce the spurt needed to encourage a year-end rally in equities or the dollar. The bust below 105 suggests March futures will test parity of 10000 in the near future.

Gold Reflects Lower Dollar Parity

We have not heard much about central bank gold divestiture since the metal has assumed its powerful upward trek. If there were a conspiracy to keep gold's value artificially depressed through central bank selling, it certainly has not materialized. In fact, consider that the Swiss Franc has been quietly leading the pack in a rally against the dollar :cool: and has assumed better intra-Europe parity.

The chart looks like a mirror (inverse) image of the dollar index, however, the Swiss Franc gains additional strength from its link to gold.

While currencies were in their trading ranges, gold was posting rising bottoms. February futures were held to a 33000 high, but the technical formation pointed to an upside breakout that we anticipated when placing our buy recommendations at 32200 with a wide stop. Strategically, prices whipped around the 20-day and 40-day averages with significant volatility as illustrated. This fooled traders out of the inherent bull trend.

Yesterday, I appeared on CNBC with Ted David to discuss the potential since gold's dramatic breakout above the 3-prong 33000 February contract tops. It aired at 10:20am Eastern time. As I spoke, gold moved up $3. This could mean people are finally listening. Regardless of talk that mines can't resist hedging or funds are going to take profits, the move higher continues.

A Proxy For Inflation?

In my book, The New Precious Metals Market, I pointed out that gold's greatest purchasing power parity was achieved during the Great Depression... hardly an inflationary period. Of course, since gold was directly linked to the dollar, the relationship was derived from the fact that money deflated. Still, it is the argument that becomes most misunderstood--gold is a de facto representation of purchasing parity.

Thus, gold's increase in purchasing power parity is not currently linked to inflation nor is it a proxy for inflation. It is obvious we have the prerequisites for future inflation that include exceptionally low interest rates, declining dollar parity, rising imports and falling exports, increasing real estate values, rising energy prices, etc. But, the overall inflation is likely to be held in check by static or falling employment, poor corporate performance, belt tightening, and falling consumer spending. Why should gold rise?

As mentioned in my book, gold is a proxy for a confidence crisis. When all else fails, turn to gold. Note that gold's parity has even increased against the Euro Currency as that currency appreciates against the dollar. This signals that investors have more faith in metal (for now) than paper.

The "opportunity costs" of holding gold are very low. What rate of return is sacrificed? One to two percent represents an incidental cost relative to gold's perceived safety and potential stability. How quickly we forget that two years ago, gold was a non-entity! Now, this venerable monetary indicator could crawl its way back onto the front pages of The Wall Street Journal and New York Times business sections.


A further indication of gold's distinctive parity differential is illustrated by overlaying the Japanese Yen (top blue) with the Swiss Franc (bottom green) monthly charts. Notice the distinct divergence from 1999 forward represented by red trend lines.


The yen is not positively correlated to gold as we can see above. The yen rallied with gold from 1986 through 1988 and declined from 1990 through 1994. Keep in mind that gold is priced in dollars. This means that the dollar parity to gold is reflected in the relationship. However, the yen is an inverted image of the dollar. Thus, divergence from the trend shows a negative gold/dollar/yen relationship. This is particularly important to recognize in our current situation. Gold is providing a strong showing regardless of the yen/dollar parity and it is likely the Swiss Franc will have the greatest gold parity correlation because the Franc has been traditionally linked to gold.

More Profit Potentials Ahead

We face a unique situation that brings gold to the forefront after two decades of benign neglect. When returns were roaring out of bonds during the 1980's, gold was the sacrificial lamb because super high interest rates were being used to combat inflation. The wealth effect was ancillary.

When stocks rocketed in the 1990's, gold was ignored because it was a non-income producing asset. Why hold gold as its price declined when you could own stock and watch your wealth grow at double-digit annual rates? Today's economic environment is significantly different. In the words of Bush 41 during his failed bid to recapture the Whitehouse, "Who do you trust?"

A major hindrance to gold's more rapid progress is the public's lack of knowledge and intimacy with the metal. The two-decade decline in gold's luster has left Generation-X devoid of any close familiarity. Even the trailing edge of Baby Boomers was only in college when gold was legalized in 1975. The prior generation needs to go back to 1933 to recall when gold was a physical attraction rather than a symbolic representation of value.

By the same standard, gold has the ability to be rapidly reacquainted with public interest because it can be purchased for a reasonable price per ounce. When you touch it, view it, and hold it, it is hard to resist its intrinsic appeal. Mankind's love affair with gold has been documented back more than 25,000 years according to recent data. It ain't over, yet!


A traditional view states, "What's good for equities is not good for gold." This is based upon the premise that investors never favor safety when stocks appear safe. Generally, I would agree with this axiom. This raises the question about equity values as we move into 2003.

March DOW futures retreated from the December rally and may have formed an elusive head and shoulders with the 8300 neckline I identified as interim support. A number of disappointing news items are simmering which include McDonalds first-ever quarterly loss and Target's drop in holiday sales. Combine these with UAL's demise and rumors that Chase Morgan Stanley is holding billions in derivative exposure...the picture becomes a bit gloomy.

A bust below 8300 signals another interim retreat. Measuring from the head to the neckline, the first objective would be 7600. From there, 7000 would be challenged. According to some experts, a bust below 7000 would be unimaginably bad. Technically, it would pave the way for a test down below 6000. Traditional stock analysis supports a further decline if you accept that P/E ratios remain historically high. In fact, 5,200 is not unrealistic.

The problem with such a decline it that it contracts wealth to the point of depression.


The S&P has a similar formation, however, the right shoulder is less pronounced and the neckline projects a first objective of 790. This remains above the October low. The broader index is less vulnerable. Still, that's a first objective. If the Dow collapses, other indices will follow.

As previously mentioned, I believe the Fed has reached the limit on dropping rates. This means the next move is either static or up. It is doubtful the Fed will tighten in light of continuing weak economic performance and sluggish consumerism. But, the fact that there is no more downside could hold interest rates in check.

The present chart calls for selling 115 calls and 110 puts. The February (based on March futures) 115 calls are 60/64ths and the 110 puts are 40/64ths. January is 37 for calls and 12 for puts. Seasonally, interest rates tend to rise from February into June. This makes the February strangle more risky. The question is whether March notes will breakout 100/64ths above 115 before the February 21 expiration.

Understand that a collapse in stocks will drive investors back to notes and bonds. This is why prices are trading at the upper end of the current channel. Even with an equity meltdown, I don't think notes have the ability to make new highs. Essentially, the market has run out of liquidity. In other words, people don't have money for anything.

Who has money to invest in gold if liquidity is a problem? This is an interesting paradox, however, gold is being controlled by fund buying and a lack of hedging. In addition, entities that borrowed gold to lend at much lower prices are being forced to accumulate tighter supplies... a form of short covering. Don't forget that gold is a small marketplace compared with stocks and government paper. The volume required to drive gold to new highs is a fraction of what it takes to move paper markets.

The Energy Connection

The commodity focus remains oil because it has the most immediate influence upon the economy. As we know, oil has been as exciting as gold. After breaking out above 2800 resistance in the February, I decided it was time to jump as of last Thursday's 2799 close. We were seeking a 30-point decline for an average entry, but Friday's 2743 open was good enough. Once 2800 was breached, prices shot higher as seen on the chart. February crude formed a "V" bottom.


The second resistance was easily overcome at 2950 and we saw some consolidation to suggest this may become interim support. The "V" projects $4 above 2800 former resistance to 3200. The past two days held prices at 3115 which may be close enough.

If February crude tests 2950 and recovers, it is more likely to make 3200. Thereafter, I believe OPEC will consider it "politically incorrect" to encourage a further rally. At that stage (3200) I would be inclined to sell calls to take in some premium.

They say timing is everything. Based upon the U.S. buildup and present rhetoric, there is a strong possibility our conflict will begin next month. January is the ideal time (if there is such a thing) for conducting operations. Weather tends to be most stable and tolerable.

We also took the long side of heating oil Friday morning. The formation is almost identical to crude, however, heating oil has more upside potential in the near term since it takes time to convert crude. A deep freeze in January and/or February could leave us with a squeeze in the February expiration. On the other hand, it would be nice to see an opportunity to see April!


Low pressure raked across the south central causing powerful storms in Arkansas and surrounding areas. This system has moved northeast and will bring rain into the lower Northeast along with milder temperatures through Saturday. The respite from subfreezing temperatures has not impacted heating oil psychology which currently looks forward to a series of cold snaps through March.

A fifty-year study of El Nino suggests that the current higher track for the jet stream can produce a series of freeze/thaws as frigid Canadian air dips south from time to time. The pattern of warm moist air that moves up from the Gulf of Mexico is responsible for unstable conditions like those seen this past week.

High pressure will dominate the west and Midwest. If the Canadian low descends over the weekend, the Northeast could see a White Christmas next week.

From a trading standpoint, I will be watching the March wheat. Any freeze/thaw cycle can be damaging to root systems. In particular, a cycle in February can significantly affect yields. Currently, we have taken a bearish stance with our July/March spread. I am prepared to reverse this next year at the first sign of trouble.

I was concerned that the small rounded bottom in the present consolidation might push prices above 3.65 former support that is now resistance. Fortunately, 3.65 constrained prices and we had a dip below the "U" to suggest further decline.

The March/July spread has come in to about 40¢ March over. One more break should be sufficient to normalize the spread. This would give us a handsome return for a very low-cost position, but we need another bust in March prices.

We continue to hold March corn short with a small loss. Prices remain below the 20-day and 40-day moving average and the overall formation points toward further decline. With an anticipated decline in cattle placements and a drop in export demand, corn can easily test below 2.30. However, I do not expect an appreciable dip below 2.30. Uncertainty over Southern Hemisphere conditions holds this market in suspense above the June 2002 lows.

Soybeans have assumed a sideways consolidation for the same reason. Currently, southern crops have seen some relief. But, the season is young. As commodity traders know, "It's not over until it's in the bin!"

December 25, 2002

Philip Gotthelf
Commodity Futures Forecast
P.O. Box 566, Closter, New Jersey

Quelle (http://www.gold-eagle.com/gold_digest_02/consensus122502.html)

syr :rolleyes:

30.12.2002, 13:44
6:50am 12/30/02
Swiss franc hits new, near 4-year high vs. dollar By Emily Church
The Swiss franc on Monday hit a new, near four-year high vs. the dollar at 1.3950 as investors continued to move into the traditional safe-haven currency on North Korea and Iraq concerns. The euro's recent gains vs. the dollar were holding, but the currency's rise was capped as Japanese exporters sold euro-yen ahead of long holiday break in Japan, London currency analyst Will Rugg of S&P said. The euro was just off its Friday peak and was at $1.0415-20 in London. "It's a familiar story in these thin markets," said Paul Bednarczyk London based 4CAST economist. He's expecting the euro is likely to resume a test of $1.05-1.06 next week

syr :D

30.12.2002, 17:12
Ich glaub' ja (noch? :confused: ) nicht an eine immerwährende, strukturell begründete Dollarschwäche... man muss Gewinne auch mitnehmen können, gelle? ;)

30.12.2002, 17:13
wer sagt das :confused:

30.12.2002, 22:55
Dauert eh nicht mehr lange, zumindest nicht ohne Pause beim CHF. Erste / Zweite Januarwoche kommt Intervention oder Zinssenkung der SNB;). Bei Zinssenkung geht Gold gleich noch ein bisschen mit. USD-Cash ist überverkauft wie sonstwas, Slow klebt seit drei Wochen am Boden :hihi. 90 kommen, aber nicht in einem Rutsch.

syr :)

05.01.2003, 23:44
$$$ Out of Control

January 6, 2003


That total is what the Bush Administration wants/requires - for the next 12 months - to have their war in the Middle East, to keep their external empire running, and to keep the US economy "growing.'

The US debt ceiling was raised by $US 450 Billion (from $US 5.5 to 5.95 TRILLION) in August 1997. That lasted until June 30, 2002, when the ceiling was raised by another $US 450 Billion to its present $US 6.4 TRILLION. The first raise lasted 61 months. The second raise, of the same amount, is now estimated (by the Treasury) to last for 8 months. Throw in a Middle East war, and the US Treasury is running on a profile which might see them add $US 1 TRILLION to their debt in ONE year.

On top of all that, the Federal Reserve is hammering fresh, new money into the US monetary system at a mean weekly speed of somewhat above $US 20 Billion. That shows that another $US 1 TRILLION could arrive, courtesy of the Fed, over the next 12 months.

Of course, it is a long running ongoing fact that the deficit on the US Current Account requires inflows of $US 500 Billion or so annually.

Add these figures together and the astounding result is that the US government might need $US 2.5 TRILLION borrowed and printed for the next 12 months, and that's not including ANY federal taxes.

The sum of ALL the above is simply a rampant case of fiscal INSANITY.

It is insane on the simplest kind of sum of the FACTS, which show it to be the case. This is what Americans and the world had better prepare themselves for, because this is the direction the Bush Administration is going in - even before any real WARS start.


The US economy is presently obviously suffering from a huge drag of malinvestments and overinvestments from over a decade of accelerating credit expansion since the fall of the USSR. Now, they have swung further into a program of HUGE deficit spending combined with an external war. They are trying to underpin this "policy" with yet another Fed induced credit expansion which already looks like adding up to $US 1 TRILLION to the presently circulating $US 8.55 TRILLION on an M-3 basis. These are acts of both financial and economic madness.

As this "policy of the insane" extends itself further in time, it runs huge global risks of being the cause of a COLLAPSE of the US Dollar. It is the US Dollar, and its international value which underpins the value of the Treasury debt instruments which most of the rest of the world's Central Banks and Treasuries hold as "reserves" behind their own national monetary systems. This US "policy" is gambling with the core financial systems and banking systems of the whole world. The whole world, in their turn, relies upon the soundness of their own Central Banks' financial situations. This cascade danger is real and global.

Were the US Dollar to begin an uncontrollable descent (Nasdaq style or October '87 Dow style), there would not be the means anywhere with which to address the situation. The hard economic truth is that just as markets can be taken down by false policies, so can currencies. Monetary history shows this well enough as any reasonable student can attest to. When currencies crash, being the underpinnings of the values in the marketplace, they take not only these values with them when they crash but also the entire economy.

Despite all this, based upon these "policies," the men in the Bush Administration want a WAR?!

William (Bill) Buckler

Quelle (http://www.321gold.com/editorials/buckler/buckler010603.html)

syr :)

12.01.2003, 12:24
Special Situations for SMART INVESTORS

Why Buy the CHF? :sss
(CHF is symbol for Swiss Franc)

The long-term picture

After having risen to 1.8309 against the CHF in October 2000 and again to 1.8226 in July 2001, the USD moved into a DOWN-trend to reach 1.5665 by September 2001 for a loss of 15%. From this day on, the USD staged a recovery which brought it back to 1.7229, a retracement of half of the loss suffered. From this level, another down-leg unfolded, down to 1.4335, again a loss of 16%. A lengthy consolidation followed from June to December of last year when the USD broke down again, going below the June low.

We believe that the trend clearly suggests further losses and that the level of 1.30 will eventually be tested.


The medium-term picture

The medium-term picture admirably depicts the break-down that occurred in December when the USD dropped out of the six months trading range that held from June to December.

What was support has become resistance and the best we can hope for is a pull-back towards the resistance zone. Further downward pressure is nevertheless likely.


The short-term picture

Short-term, we again notice the break down that happened in December and which lead the USD down to 1.38 in thin market trading at year-end. While the market digests this move down, we think that the 1.38 level will eventually give way among uncertainties regarding the Iraq-war.


Fundamental Considerations: The USD may be losing its Magic

On the basis of a fundamental currency model, the CHF is still undervalued by around 20 %. :ek The short-term goal during the coming two years is around 1.25 to 1.30 US dollars to the EUR :cool: . The flow of capital between the Eurozone and the USA for investments like equities, corporate bonds, government bonds and money-market securities will be reversed in the direction of Europe. It is believed that the projected relative development of fundamental evaluation factors - including growth potential, equity-market analysis, levels of return, inflation potential and budget deficits - is uniformly in favour of the old continent.

Classic exchange-rate theories involving purchase-power parity and interest-rate parity also indicate a 15 to20 percent upward valuation of the EUR. Many players in the market still give these theories a great deal of credence.

The high levels of the US current account deficit during the past 10 years have entailed a large number of foreign central banks piling up big US dollar reserves. Asian central banks could trigger a severe currency crisis if they substantially reduced dollar positions and purchased EUR with a view to diversifying their currency risks. The German Bundesbank is also still managing big US dollar reserves, a major proportion of which are likely to be sold during the next few years, because they have become largely superfluous since currency reserves have been transferred to the European Central Bank. The current situation recalls the position at the end of the Bretton Woods System in 1973when the world was also swamped with dollars due to the US trade deficit, and the central banks finally resorted to gold in order to spread currency risks.

The key fundamental factors have been indicating a drastic devaluation of the American currency for years. However, for some months now investors have also been receiving clear signals based on chart data indicating that the dominance of the American dollar is now history. Taking a perspective of a few weeks, the US dollar could win back some ground, but long-term analyses show charts tracing out clear top formations for the Greenback.

The influence of political statements on the currency markets is waning. Negative statements by the US Treasury Secretary Paul O'Neill and Federal Reserve Chief Alan Greenspan led to big markdowns in the common European currency during the past two years. But then the European Central Bank had a low standing. Their interest-rate decisions were subject to vehement criticism not least in media biased towards America, while praise was heaped on the measures taken by the Federal Open Market Committee. However, it is believed that the stabilizing policy of a relatively calm hand at the European Central Bank will have more success over the long term in financial markets than the frenetic policy of the American central bank with its repeated and abrupt changes in direction. The first indications of a change in sentiment are already perceptible. When Treasury Secretary O'Neill emphasized the policy of a strong dollar in April of this year, the currency markets failed to fall in line for the first time. The EUR gained more than a cent during the speech because a large number of players in the market obviously regarded this policy as untenable in the long-term.

Currency Trading

If you are interested in currency trading, please consult our Presentation at www.pzim.com.



Peter Zihlmann

January 10, 2003

Quelle (http://www.gold-eagle.com/editorials_03/zihlmann011003.html)

short usd equals long gold :p.......

syr :cool:

13.01.2003, 11:07

How far can it fall?

Jan 10th 2003
From The Economist Global Agenda

After losing one-tenth of its value during 2002, the American dollar has fallen to its lowest point against the euro since 1999. Will it continue its retreat?


IS THE party finally over? For years, currency experts have been confidently—and largely mistakenly—forecasting the decline of the dollar. They were able to marshal an impressive array of evidence in support of their arguments. It was, they said, overvalued on any historical measure. America could not continue to absorb the large capital inflows which had propped up the greenback for so long. The euro, after its creation in January 1999, would soon challenge the dollar’s reserve-currency status. More recently, America’s burgeoning current-account deficit alarmed economists, who saw no alternative to a precipitous collapse of the dollar.

Yet the dollar—or, more accurately, the people who buy and sell currencies—remained impervious to economic forecasts. The world’s most important currency continued to be its most sought-after. The euro endured what to many Europeans was a humiliating decline in its international value almost from its inception. Neither the American recession in 2001 nor the huge and growing current-account deficit (about 5% of GDP) seemed to discourage people from holding dollars. And then, in the closing months of last year, the dollar finally started to weaken. By the end of the year, the dollar had lost 10% of its value as measured against a trade-weighted basket of currencies. The first few days of 2003 have seen it slip further against the euro and the yen.

Will the slide continue—and if it does, what will it mean for the global economy? Only a brave forecaster would try to predict with any confidence where the dollar will be in six months’ time. Of course, currency economists make such forecasts all the time—but that's their job and they are frequently mistaken. The factors which affect the value of one currency in relation to another are numerous and complex, and often confusingly contradictory. It is not simply a question of working out what foreign-exchange speculators think. Most currency trading is not speculative: it is the consequence of economic decisions taken by largely rational actors. Any shift in a currency’s value is driven by the cumulative impact of those millions of rational decisions.

The source of the great dollar surge in the late 1990s was easy to spot. The booming American economy offered enormously attractive rates of return on investment: as a consequence, large amounts of investment capital flooded into the country. Even when boom turned to bust, America still looked to be a better home for capital than many other, even more lacklustre economies. In 2001 and 2002, for instance, Europe’s economic performance was disappointingly sluggish, and the prospects for 2003 look little better. Emerging-market economies have lost their allure for most investors, especially after the collapse of the Argentine economy.

As the most important reserve currency, the dollar is also seen as a haven in times of global political uncertainty. Even after the terrorist attacks on New York and Washington—putting America, for the first time, at the heart of the security threat—it was to the dollar that nervous investors first fled. More recently, gold has recovered some of its attractiveness as a haven, reaching its highest level in six years this month. But the yellow metal is still worth only a fraction of its long-term historical value.

The prospect of war with Iraq, and the continuing threat from international terrorism, have made investors more nervous about the future. Yet the tide now seems to be turning against the dollar. This suggests that, for the time being at least, factors other than risk-aversion are more powerful in determining currency flows. One of the most important is the recognition that American investment returns are likely to be significantly worse than in the recent past for at least the next year or two. It doesn’t need investors to start shifting capital out of America to weaken the dollar—lower inflows would be enough.

Some of the dollar’s weakness is also likely to be self-fulfilling. As investors become convinced that the American currency will depreciate, they will seek an alternative home for their funds. That will, in turn, put further downward pressure on the dollar.


But is the decline such a bad thing, for the American economy or the rest of the world? Few American exporters will weep as the greenback sinks: the strong dollar has made it difficult for them to compete in world markets in recent years. Nor will tears be shed among manufacturers who have been desperately trying to fight off competition from cheap imports. Those countries whose currencies are linked, loosely or tightly, to the dollar will breathe a sigh of relief as well—Hong Kong and Brazil are among those economies that have suffered as the dollar has soared. Argentina’s currency peg was stretched to breaking point—and beyond—partly because of the American currency’s strength.

Those countries that compete for business in America, or with American exporters, though, will not relish the impact of the dollar’s decline. The rise in the value of the euro might boost morale at the European Central Bank in Frankfurt, but it will not bring much comfort to Germany’s export-driven corporate sector. East Asian economies such as Singapore, still reeling from the collapse of the high-tech boom, have no reason to welcome a devalued dollar.

Paul O’Neill, the treasury secretary fired by President George Bush at the beginning of December, was known for his belief in the benefits of a strong dollar. Such conviction is the refuge of old-fashioned politicians who associate national pride with a strong currency. Mr O’Neill was accused of trying to talk up the dollar, and consequently blamed for its persistent strength. His successor, John Snow, is, as yet, innocent of such uncomplicated views. In reality, of course, politicians have almost no power to influence currency movements except in the very short term. They are reduced to watching when currencies overshoot—as they almost always do—on the way up, and on the way down.

Quelle (http://www.economist.com/agenda/PrinterFriendly.cfm?Story_ID=1533317)

syr :rolleyes:

14.01.2003, 09:28
Noch fehlend im Thread, die mitlaufenden Charts dazu:




Sodele, Grundausstattung vorhanden :cool:


14.01.2003, 10:25
Der US$ ist überreif für eine Erholung. Dennoch wird es wohl nicht mehr werden, als eben das: eine Erholung.

Das ist aber nur meine unmassgebliche Privatmeinung. Hochberg ist beispielsweise der Ansicht, dass sich der Dollar momentan sogar an einem mittelfristigen unteren Umkehrpunkt befindet und kurz davor steht, eine mehrmonatige Rally zu starten. Guckst Du selber:


Einmal über dem Tief der (3) bei etwa 103 spräche viel für diese Variante. So watch it....

14.01.2003, 10:29
Ist 103.45 Riva, nun weisste, wo meine Stops liegen. Nur, ich zähle nicht Waves, nur am Rande.
Dann habe ich fünfer Down, derzeit fertig 3 von 5, folglich kommt 4: Pullback 103.44 and down, 5 von 5 auf 90/91. No way for Hochberg, sorry:p....... USD-Cash war Ende Dezember bedeutend überverkaufter als heute, Slow hat's schon recht weit geschafft;).

syr :D

14.01.2003, 10:47
Aus ähnlichen Gründen hab' ich oben ja auch geschrieben, dass meine Meinung nur eine Erholung zulässt, bevor es weiter abwärts geht.

Aber den Stop bei der (3) werde ich dennoch ernst nehmen (müssen :) ) - wie Du ja offensichtlich auch. ;)

14.01.2003, 13:03
Jup Riva ;). Traum wär die 4 hoch auf Pullback, 5 selber wieder als 5er, 100.20 --> 101.35 --> 94/95 --> 98 --> 90/91, Boden. Passt das :hihi?

syr :)

14.01.2003, 13:46
Ned wirklich... leider... :lach

14.01.2003, 16:13
Siehste, das sind halt freie Waves, alternativ :rofl!

syr :hihi

19.01.2003, 10:41
Ok, der $$$ macht ja weiter, mittlerweile unter 1.37 CHF und US-Cash strong Richtung 100 :sss. Aus der Ecke von MS/Roach :

Currencies: Twin Deficits -- USD No Longer the Lord of the Currencies

Stephen L. Jen (London)

Twin Deficits Set to Breach 7% of GDP

For the first time since 2Q85, the combined US fiscal and current-account (C/A) deficits look likely to breach 7% of GDP this quarter, and move into the 8% range by 2004. In my view, this ‘twin deficit’ problem will become so severe in the coming two years that I believe it will overwhelm other factors that may be USD-positive. The USD resumed its structural correction :D on 6 December when Secretary O’Neill resigned, and will continue to depreciate against a broad range of currencies throughout this year, in my view.

Third Phase in This ‘Stuttering’ USD Downtrend

This USD correction is very different from the weak USD periods of 1985-87 and 1994-95. One key difference is that the current structural USD correction has already been interrupted several times, while the previous two USD corrections evolved more in a straight line. The global economic backdrop is substantially more fragile and uncertain now than in the other periods; and extreme economic weakness and uncertainty have proven to be USD-positive and were, in my view, behind the stop-and-go nature of this USD correction (our ‘USD Smile’ concept). In assessing this ‘stuttering’ USD downtrend, therefore, my focus has been less on the simple ‘crash versus no-crash’ debate, and more on identifying the conditions under which the USD can correct, and those under which the USD is supported.

The USD first began its structural correction in July 2001 (see Questioning the Longevity of the Dollar Dynasty, S. Jen & J. Fels, 26 July 2001). This correction was interrupted by the terrorist attacks in September 2001 and the events that followed. I believe that fear-motivated capital supported the overvalued USD between September and March 2002. The USD did not resume its second phase of correction until March 2002, when (1) concerns emerged about the commitment of the Bush Administration to the strong USD policy following the imposition of steel tariffs, (2) the financial markets stabilised and (3) investors began to price out the risk of a double dip. The perception that the global economy was returning to a ‘benign environment’ released risk capital out of the US, and the USD went into a broad-based descent between March and July of 2002 (see The Dollar is Likely to Enter a Gentle Descent, 7 March 2002). The violent meltdown in global equity markets last July rekindled investor fears and, as a result, USD bonds and the USD itself benefited from such extreme risk aversion. This helped the USD remain stable for most of 2H02.

The resignation of Secretary O’Neill on 6 December 2002 marked an important turning point for the USD in my view, for it signalled that the Bush Administration may take the opportunity of the personnel change to (1) further modify its policy on the USD and (2) introduce a large fiscal stimulus. I believe this event triggered the third phase of the USD decline. In a note last week (Fiscal Deficit + a C/A Deficit = a Weak USD, 9 January 2003), I argued that a further move away from former Treasury secretary Robert Rubin’s definition of a strong USD policy would take out the tailwind that has been so powerful in pushing foreign capital into the US in recent years. At the same time, fiscal stimulus in a weak global economy will exacerbate the US’s external deficit. A simultaneous fall in the supply of and a rise in demand for foreign financing will be USD negative.

Why Is the Twin Deficit Bad for the USD?

Twin deficits occur in economies that are both saving-short and whose public and private sectors are out of balance. In the late 1990s, the world was eager to invest in the already saving-short US economy because the US was not so much seen as saving-short as investment-rich. It was thought that the US C/A deficit was justified because investments in the US carried persistently higher returns on capital and that such a saving deficit was a sign of strength, not weakness.

Things are different now. Investment in the US has collapsed, and the world has realised that the US return-on-capital premium was more of a mirage than a miracle. Without Keynesian stimulus, domestic demand in the US would have weakened and the C/A deficit would have naturally declined toward what is considered sustainable in the long run. However, with massive monetary and, now, fiscal stimulus to resist this weakening in domestic demand, the saving deficit is, effectively, not allowed to shrink. The C/A deficit in the US looks set to be kept high not because of high investment, but because of lower net savings (the public sector dis-saves on behalf of the private sector) to match lower investment. This is a critical change in the USD story, one that is missed by those who believe a fiscal stimulus will boost economic growth, which in turn will support the USD.

How Big Is the Twin Deficit Problem?

To come up with a composite measure of the severity of the twin deficit problem, I simply added the size of the fiscal and the C/A deficits (in percent of GDP). 7% seems to be a critical threshold. The last time this level was breached was in 2Q85. That was also when the USD index peaked, followed by a 30% correction over the subsequent 2-year period. (The Plaza Accord, on 22 September 1985, was announced several months after the USD had already begun to correct.) Based on the latest forecasts of our US economists Dick Berner and David Greenlaw, incorporating what we believe will be included in the latest fiscal package, this twin deficit index will reach a historical high of 8% by 2004! While there is nothing ‘magical’ about the threshold of 7%, that this measure of the twin deficit problem looks set to reach the highest level in recent years is important.

Tying This In with Our Valuation Work

My concern about the growing twin deficit problem is also conceptually consistent with our fair valuation work on the USD, which identified four key drivers of the long-run fair value of the USD as (1) relative productivity, (2) terms of trade, (3) the relative fiscal position, and (4) the net foreign asset (NFA) position of the US. The twin deficit problem of the US essentially captures the latter two variables: relative fiscal position and the external financing position of the US. With the emergence of the twin deficits, the USD’s underlying fair value has been drifting lower since the beginning of 2002. The market value of the USD must decline if only to keep pace with the falling fair value.

How Much Further Can EUR/USD Rally?

The USD has weakened by around 6% against the EUR since the beginning of December. How much further can EUR/USD go? It’s tough to say. However, I note the following. First, in my view, the Euroland economic and EUR stories are not compelling. This move is not an EUR story; it’s decidedly a USD story. I believe the EUR has been rallying by default, not by merit. Second, having said this, the EUR is one of the best alternative currencies to hold, particularly for the two key groups of foreign exchange holders in the world: the Asian central banks and the oil-exporting countries :D (at current oil prices and supply levels, there are, annually, some US$800 billion worth of fresh petrodollar receipts slushing around). Capital exit from the USD could mean a powerful run into the EUR. Third, the key medium-term issue arising from the rally in EUR/USD, from Europe’s perspective, is clearly export competitiveness: How strong a EUR could the likes of Germany absorb in the current environment? The ratio of Euroland’s output elasticity with respect to interest rates and that with respect to the exchange rate is roughly 6:1, i.e., a 5% change in the average annual index value of the EUR has the same effect on GDP as a 75 bp change in interest rates. This means that, to offset the effects of a 10% rise in the value of the EUR this year, the ECB would need to bring the refi rate in line with the current level of the Federal Funds Rate. Since the average value of EUR/USD was 0.95 in 2002, the current spot is already more than 10% higher. Thus, I would be surprised if I don’t hear some verbal intervention from the Europeans to try to cap the rise in EUR/USD. The ascent in EUR/USD will slow or be suspended as a result.

Bottom Line

This is still a decidedly a USD story, not a EUR-, JPY-, AUD-, or a GBP-story. The twin deficit problem in the US is becoming very serious and, in my view, will overwhelm other factors to drive the USD lower this year. The sum of the fiscal and the C/A deficit will, for the first time since 2Q85, breach 7% of GDP this quarter. Coupled with the high likelihood of further modification on the USD policy, the USD should continue to weaken this year to equilibrate the supply and demand of foreign financing for the US.

Morgan Stanley / St. Roach (http://www.morganstanley.com/GEFdata/digests/20030117-fri.html#anchor0)


22.01.2003, 15:24
International Perspective, by Marshall Auerback

Capital Controls: The Counterattack Has Begun

January 21, 2003

“Wall Street has become a very powerful influence in terms of seeking markets everywhere. I mean, Morgan Stanley and all these gigantic firms want to be able to get into other markets and essentially see capital account convertibility as what will enable them to operate everywhere. …Wall Street views are very dominant….They want the ability to take capital in and out freely. … …it also ties in to the IMF's own desires, which is to act as a lender of last resort….as the apex body which will manage this whole system. So the IMF finally finds a role for itself, which is underpinned by maintaining complete freedom on the capital account. It should be remembered that many countries have grown without capital account convertibility. Look at China for example, it has had very high growth rates, Japan, Western Europe since the War---It is only recently that CAC has become the norm there. In my judgment, it is a lot of ideological humbug to say that without free portfolio capital mobility, somehow the world cannot function and growth rates will collapse”.
- Jagdish Bhagwati, The Times of India, Dec. 12, 1997

When you’re the world’s largest debtor, you want the maximum amount of capital possible, coupled with the least impediments to retaining access. This largely helps to explain America’s persistent opposition to the introduction of any kinds of capital controls, or taxation/regulatory proposals (e.g. the “Tobin tax”) which increase the costs of shifting speculative portfolio flows from one part of the globe to the next. In light of news last week that the U.S. trade deficit bulged to a record $40.1 billion in November, it is becoming increasingly clear that a dollar devaluation per se will not alleviate this growing imbalance in the short to medium term. In fact, we have previously argued that the long-time maintenance of a strong dollar policy has substantially eroded American manufacturers’ ability to compete in more and more global markets.

From the perspective of American policy makers, therefore, the pursuit of open markets in many respects permanently entrenches this competitive disadvantage. Current trade negotiations, therefore, are increasingly focusing on the need for easily accessible foreign capital, preferably lots of it, as a quid pro quo for continued access to American markets. Capital controls clearly work against this objective and now it appears that US trade negotiators are working proactively to ensure that any incipient resort to them is to be eliminated as such future free trade deals are pursued.

It is in this context that one should view the recently announced free trade deals between Singapore and the US and Chile and the US respectively. The US and Singapore overcame the final hurdle in negotiations on a free-trade pact last week, agreeing to allow some limited controls on capital flows during a financial crisis.

That provision, which largely mirrors the recent deal between the US and Chile, would give Singapore authority to block capital outflows for up to a year as long as those measures did not "substantially impede" the free flow of money. US Treasury officials said it would provide a model for future trade pacts and would curtail the ability of countries to use capital controls.

America’s visceral dislike of capital controls is nothing new, even though capital controls per se are not antithetical to free trade. In fact, Keynes used to argue that in the absence of proper sequencing, capital account liberalisation works against genuinely free trade in goods. Similar arguments have been made by more recent champions of free trade, such as Columbia University professor, Jagdish Bhagwati, quoted above. The thrust of Treasury policy for the past several decades, however, has been the pursuit of capital account liberalisation, sometimes even in the absence of genuinely free trade. This poor sequencing has often created the conditions for financial crises, such as those which afflicted emerging Asia some 5 years ago.

Open hostility against moves to reverse this liberalising thrust really dates back to the 1997 period, during which Japan and Taiwan first floated the idea of an Asian Monetary Fund (a proposal which, had it been implemented, could have done much to avert the subsequent Asian financial crisis). The two countries had offered to put up $100 billion to help their fellow Asians in November 1997, but then US Deputy US Treasury Secretary, Lawrence Summers, denounced the idea as a threat to the monopoly of the IMF over international financial crises, and the idea was subsequently killed. He did not want Japan taking the lead because Tokyo would not have imposed the IMF’s conditions on the Asian recipients and that was deemed an important objective of US policy, so as to ensure that these economies were restructured along Anglo-American lines.

Malaysia’s subsequent decision to defy prevailing US Treasury/IMF orthodoxy proved to be a major turning point. The country’s implementation of capital controls, coupled with a comprehensive repudiation of the IMF’s austerity program, helped to nurse the country back to economic health. The action received the endorsement of then World Bank economist, Joseph Stiglitz. Stiglitz later argued that the econometric evidence in support of the arguments for unfettered capital market liberalization was a position “based more on ideology than on science. While the evidence concerning the risks which such liberalization brings is overwhelming, the evidence concerning the benefits is far more scanty.”

This abrupt reversal in the decades-long tide toward Anglo Saxon laissez faire capitalism naturally generated alarm in Washington. Typical of this ideological hostility were the comments made 4 years ago by then Deputy Treasury Secretary Summers:

WASHINGTON - U.S. Deputy Treasury Secretary Lawrence Summers warned crisis-hit Asian economies Wednesday not to draw the wrong lesson about free-market capitalism, saying countries that turn their backs on the international financial system hurt their own citizens "most of all."

Equally emphatic was Alan Greenspan's testimony to Congress on Sept. 16, 1998, during which, in a departure from his usual ramblings, he focused on one issue and one issue only---the threat of capital controls. His speech reflected an alarm over the initiative of Malaysia, with rising Chinese leadership in the background.

“The relative stability of China and India, countries whose restrictions on international financial flows have insulated them to some extent from the current maelstrom, has led some to conclude that the relatively free flow of capital is detrimental to economic growth and standards of living. Such conclusions, in my judgment, are decidedly mistakes.”

It is more likely that Greenspan’s crocodile tears were less for the standards of living in countries such as China and India, and more to do with the threat posed to America’s own growth (as well as his conduct of policy) were the providers of external capital to introduce restrictions of one form or another. By the same token, unable to block the Malaysian experiment, Richard N. Haass and Robert E. Litan, directors respectively of foreign policy and of economic studies at the Brookings Institute, sought to deflect blame from Washington: “In some quarters [globalisation] is seen as having caused the rapid flows of investment that moved in and out of countries as investor sentiment changed and were behind the Mexican and Asian financial crises.” Both argued, however, that this would be the wrong conclusion: to accept it would be to “abandon America’s commitment to the spread of markets and democracy around the world at precisely the moment these ideas are ascendant.”

It would be more correct to state that America had a commitment to the spread of a certain type of market economy. But the Malaysian resort to capital controls clearly altered perceptions in a manner which threatened America’s increasing need to retain such portfolio flows as its economy became increasingly imbalanced. Noted academics like Paul Krugman have long called for such controls in Asia. G-7 countries like Japan and France are on record considering the appropriateness of such controls, either at home or abroad. It has become increasingly recognized that short term capital flows have been speculative and even intentionally destructive, requiring some measure of regulation if not control. The recent reversal in the US dollar has been aided to some degree by concerns that the "rules of the game" in international currency markets might be changed.

Equally important was last November’s seminal speech by Fed governor Ben Bernanke. We argued at the time that his paper on possible radical monetization by the Fed was a double edged sword. In all probability, Governor Bernanke believed that, by indicating a willingness to monetize treasury debt without limit and even private assets, he was providing encouragement to investors and that this encouragement would support private asset prices. We argued that this edge of the sword would most likely prove to be blunt: most investors would not comprehend his words of encouragement and those who did were already over positioned in equities and corporate bonds.

Unfortunately for Governor Bernanke, by expressing a willingness of the part of the Fed to deliberately monetize to the point of currency debasement, he has clearly discomfited holders of treasury bonds and foreign holders of all U.S. dollar assets. Both of these classes of market participants are very long these assets and very vulnerable. Their discomfort appears to be manifesting itself through a massive withdrawal of foreign private investor selling of US dollar denominated assets, which is swamping foreign central bank buying (the increase of which is illustrated by the recent sharp rise of holdings of US Treasuries and US agency securities in the Fed’s Foreign Custody Account).

Consequently, now is clearly not the time to allow momentum to build toward any kind of capital controls. Indeed, from the US point of view, to move back toward capital controls by a US ally would represent an ideological heresy. It would also be a great affront and danger, given the deteriorating external net indebtedness of the US economy. A new quid pro quo is therefore emerging: open markets in return for minimal capital controls, so as to ensure that America’s access to foreign capital flows is not withdrawn cold turkey by some Mahathir-like imposition of new investment restrictions.

In effect, the US authorities are using America’s reserve currency monopoly and domination of the world’s financial architecture to aggressively co-opt the surplus savings of the rest of the world. As global strategist Chris Sanders notes, “The leverage strategy only works if all significant parties play the game. Hence, everyone who is anyone needs to become a member of the system, which is to say of the International Monetary Fund and the World Trade Organisation.” We would add continued access to America’s own vast consumer markets as part of the deal as well, as the agreements with Chile and Singapore make clear.

We happen to think that this is a troubling development for the emerging world. Yet again, the world’s savings repository – notably Asia – is doing deals highly inimical to their interests in order to satisfy America’s increasingly large addiction to foreign capital flows. Chile’s system of capital controls worked extremely well: by proportionately lowering tax rates on inflows to zero the longer such funds remained in the country, the Chilean authorities were simultaneously able to attract long term FDI flows needed to finance the country’s economic development, whilst discouraging speculative short term portfolio capital. This system has now been junked, which means a much weaker defence in the future were another “run” on the region to occur. The destruction wrought on the emerging world by global mobile capital flows has profoundly changed assessments around the world regarding the contribution to welfare made by the free flow of short term capital. The staunchest advocates of capital convertibility and unfettered short term capital movements---the US Treasury and the Fed---continue to argue that the basic problem lay in the flawed financial structures of the recipient countries. But even they now concede that there was a private market failure in foreign capital crowding into these into these small economies at one moment and reversing direction in the next.

The countries that have suffered greatly from these short term capital flows see in these flows not merely market failure but unbridled speculation with destructive intent. The railings of Dr. Mahathir of Malaysia against hedge fund speculation aimed at forcing devaluations in Thailand and Malaysia have been well publicized. Until his country’s imposition of controls, his views were regarded as extremist and insupportable. That changed as the crisis in Asia intensified. Even the characteristically sober and laissez-faire Hong Kong monetary authorities made a persuasive case back in 1998 that the attack by speculators on their stock market and currency, despite the fifth largest exchange reserves in the world and a current account surplus of 5% of GDP, was a coordinated manipulation which, if attempted in the US, would have been a criminal violation.

Even in the West we are now hearing from the bastions of free market capitalism itself similar an assertion regarding the inappropriateness of global short term capital flows for small emerging economies. The temporary resort to capital account restrictions has subsequently received some grudging endorsement from the Asian director of the IMF, Hubert Neiss, and UNCTAD, which stated in its 1998 report, "Controls will remain an indispensable part of developing countries' armory of measures for the purpose of protection against international financial instability."

Former Federal Reserve Chairman Paul Volker has contended,

"The IMF's stance was influenced by the US Treasury and left many small economies dangerously exposed to turbulent capital flows. The visual image of a vast sea of liquid capital strikes me as apt," Volker said in April. "The big and inevitable storms through which a great liner like the USS United States of America can safely sail will surely capsize even the sturdiest South Pacific canoe."

Worse yet was the assessment of George Soros.

“The rethinking must start with the recognition that financial markets are inherently unstable. The global capitalist system is based on the belief that financial markets, left to their own devices, tend towards equilibrium. They are supposed to move like a pendulum: they may be dislocated by external forces, so-called exogenous shocks, but they will seek to return to the equilibrium position. This belief is false. Financial markets are given to excesses and if a boom/bust sequence progresses beyond a certain point it will never revert to where it came from. Instead of acting like a pendulum financial markets have recently acted more like a wrecking ball, knocking over one economy after another.”

The global economic order and financial architecture promulgated by the Treasury, IMF and Federal Reserve looks to be under threat. These latest deals suggest that the US is now fighting a rearguard action. Almost implicitly conceding that the cumulative effect of a decade long maintenance of a strong dollar policy has destroyed American trade competitiveness, the authorities are now adopting maximum capital mobility as a fallback option. Again, the objective seems to be consistent with that of the Fed: to take actions consistent with pre-empting, rather than accommodating, America’s need to make essential economic adjustments, the very sorts of adjustments which both the Treasury and IMF have tried to force on the emerging world for years as a quid pro quo for receiving any kind of external assistance.

However, we think the die is cast. There is no doubt that global mobile capital has proven to have become essentially speculative. Whether this is an inherent trait of markets, as Soros would contend, or a recent "pathological development", as we would argue, it is now widely agreed that global mobile capital has been speculative and destructive. Some form of regulation, capital controls or "Tobin tax" is inevitable over the next few years.

Emerging Asia in particular saves too much. With its sky high savings rates, its undervalued currencies, and its vast current account surpluses, it does not need foreign capital over the long run. Increasingly, as it has succeeded in stabilizing its external funding, it has tended to shun foreign short term capital. Few countries, if any, will go as far as Malaysia. However, countries with current constraints on foreign portfolio capital such as Korea, Taiwan and the Philippines will continue to shun foreign short term capital. One wonders whether Argentina, as it slowly emerges from a horrific recession, will so readily embrace such IMF-sponsored orthodoxies again. And there is increasing evidence to suggest that, much as the American authorities would like to make Singapore and Chile the template for all future deals, it is unclear whether this quid pro quo will find favour in a world increasingly inimical to US interests.

Quelle (http://www.prudentbear.com/archive_comm_article.asp?category=International+Perspective&content_idx=19670)


23.01.2003, 11:19
USD-Cashindex 23.01.2003, 11.15 Uhr, Stand 99.93 Punkte :D...



MOSCOW, Jan 23 (Reuters) - Russia's central bank said on Thursday it would raise the level of its non-dollar reserves because of low returns for the U.S. currency.

"We reviewed our investment guidelines toward increasing the proportion of other currencies. We are diversifying," said the central bank's deputy head, Oleg Vyugin. "Dollar instruments have very low returns now. Other currency instruments offer higher returns."

90 kommen auch noch :p.......


23.01.2003, 11:30
The U.S. dollar, the asset that is the measure of all other assets, is simply the 'stock' (i.e. liability) of the U.S. government. Think about that for a moment: What kind of a balance sheet does this entity have? Is it a wise investment? If the U.S. government were a publicly traded company, would you buy its stock as a long term investment?

Pop Goes the Bubble - Part III
Sell Dollars, Buy Gold Now!
22 January 2003 * M.A. Nystrom

If there is one single idea that I have attempted to convey in this series of articles, it is that the popping of the financial bubble in America and the world is a process, not a single event. This process will take years to complete, and it is far from over. Before the true rebuilding process can begin, much of what remains of the false paper wealth that has been created in this country will be destroyed. As the effects of the falling financial dominoes reverberate throughout the nation and the world, it is clear that this crisis will shake the foundations of the current financial system to its very core.

In Part I of this series, I advised that even after three years of steady declines, the stock market remains massively overvalued and I suggested that if you have not done so already, to sell your stocks now. In Part II, I observed that while the housing market is often referred to as the "only bright spot" of the current recession, and "the bedrock of the new recovery," in reality it is simply another investment bubble with valuations inflated by financial smoke, mirrors and debt. Take your profits here too, as this market will soon begin to deflate.

The reader who took this advice and liquidated these assets would now be sitting on a large pile of "money," most likely U.S. dollars. But it is not time to relax just yet, for even the dollar is not safe from devaluation. In this Part III, the final installment of the series, we examine the last great bubble, the granddaddy of them all, the one within which and upon which all other bubbles reside - the mighty United States dollar.

The Greater Fool
The dollar is fundamentally no different from the other assets that periodically inflate and deflate over time. Bubbles occur when market psychology - hype - cause asset prices to lose touch with reality. This hype feeds on itself as others rush to provide more of that asset in order to cash in on the easy money. We saw this with the dot-com IPOs that never made a profit. We're seeing it again with the rush to build cheap condo/retail complexes to cash in on the hot real estate market. And though you may not realize it, we're seeing it right now with the U.S. dollar. It is the hope of this essay to help clarify the bubble mentality that is currently inflating the value of the U.S. dollar.

Bubbles are driven by the very human desire for easy money. After all, who wants to work for their money in this modern age? A bubble is a scheme that relies on the Greater Fool theory - that prices begin rising for no other reason than the belief that they will continue to rise. You may be a fool to buy into the scheme, but it only takes one fool later and greater than yourself to ensure your profit. The question with the dollar is who will be the greatest fool? Who will be the ones left holding the bag as the value of the dollar - slowly or quickly - erodes to zero?

Seeing the Bubble
In the years of the stock market bubble, Fed Chairman Greenspan stated many times that it is only in retrospect that we can determine whether a bubble in fact existed or not. At its height, he denied the existence of a bubble. Today he openly admits that it was a bubble, but claims that even had he perceived it at the time, there was nothing he could have done to stop it. The Fed's best bet, he asserts, is to attempt to mitigate the fallout of a bubble when it occurs.

While this is not comforting, it is important. Because if Chairman Greenspan does not believe that bubbles can be spotted in advance, you cannot expect him to point them out to you before they pop! You'll have to think for yourself on that issue. He missed the stock bubble, he's missing the housing bubble and he'll certainly never publicly entertain the idea that the dollar could possibly be a bubble. His position as head of the Federal Reserve prohibits him from speaking bluntly about certain issues, namely the economy. His job is to soothe and reassure the public that everything is fine. And if it is not fine, he'll deal with the after-effects when they occur. (If he's still around; his term expires next year.)

The thinking investor realizes that the truth is hidden somewhere between the lines and listens to the news accordingly, all the while thinking for himself. Hints are given, directions indicated, hands tipped and signposts revealed. But the truth remains cloaked beneath the veil of the static of the daily news and popular prognosticators who would have you believe that the future is just a linear projection of the recent past. The bottom line is not to look at Greenspan nor anyone in power for guidance of your affairs, financial or otherwise. Their interests are not necessarily your interests. It is vital that you think for yourself. Their mantra is, and will ever be "Don't worry, everything is fine."

Everything is Not Fine
Make no mistake: The dollar is a bubble in the same way that the Nasdaq was, and the same fate awaits it. Like with any bubble, there is a rush to create more of the asset in order to cash in on the easy money. Our government is already $6.4 trillion in debt - this figure grew 8% last year, well over twice the rate of the economy. The Fed believes there is no limit to the amount of money that can be created. Yes, there is a legal 'debt-ceiling' but Congress moves it at will, like children changing the rules of a game in mid-play. The debt ceiling went from $6 trillion to $6.4 trillion last year, and it will have to be moved up again this year to over $7 trillion. Before long something will have to give.


Inconvenience Checks
But the Feds aren't the only ones creating money. Like every good bubble, many players are moving to cash in on the easy money. There is the mortgage refinancing game, discussed in Part II. There are the car companies and others with zero percent financing. And then there are the credit card banks.

Each month I receive several blank "convenience" checks in the mail from my credit card companies. MBNA, Fleet, Chase, Citibank, Discover - they're all running the same racket. "Spend now! Pay off higher rate cards, or take a vacation - use the money however you want!" they implore. With a few strokes of the pen, from thin air I could fatten my bank account literally by tens of thousands of dollars this afternoon, courtesy of the big banks of America.


Why do the banks do it? Where does the money come from? Where does it go?

The banks are simply participating in the bubble. They get their money cheap from the Fed - say at around 1.25%, then loan it to the "convenience" check writer at 3.9% for a while, then jack it up to around 16% after a few months. Such is the price of convenience. The bank pockets the difference with little risk. Easy Money. It is the hallmark of the bubble - money so easy that it cannot be resisted. The Fed, of course, encourages it by keeping rates low. They don't care how banks use the money, in fact they need the banks to inject it into the economy.


Like with all bubbles, the money is created from thin air. The banks are authorized to do it. The money is first created, then borrowed from the future based on the borrowers ability to pay it back. It is a classic money-for-nothing scheme. And like all free money, one can be certain that it is not going into anything useful. Say a consumer takes the credit card companies' suggestion and goes on vacation, buys some new toys and goes out to dinner every night of the week for the next three months. He has spent the money and greased the wheels of the economy for a period of time, but in the end has added nothing of lasting value.

In the final analysis, the 'convenience check' becomes rather inconvenient to both the consumer and the economy at large. The money is spent, but the debt remains and the price is high. No productive capacity was created with which to pay it off. It will likely be paid off with another "convenience check" at a lower rate, which is what the average consumer, and the nation itself, is doing. The debt never goes away, and in fact continues to creep up. Some banks even set minimum payments so low that they don't even cover the interest and fees for one month, so the balances continue to rise even when regular payments are made!

At some point these debts get so large that it becomes clear that they will never be paid off. The consumer falters and he is no longer a good credit risk. At this point the jig is up, and he'll have to either: 1) Pay off the debt in full (but with what money! Everything he has is borrowed!) or 2) Walk away. Kaput. Leave and leave the bank holding the bag, and go on his merry, or not-so-merry, way.


The same is true for the country itself. The U.S. government continues to borrow, because the easy money cannot be resisted. Why raise taxes, why cut spending, why be fiscally responsible when the money can simply be borrowed? And the world wants to loan the United States money! This is a signature of the bubble! Unfortunately, like the convenience check user, the government makes few useful investments. The borrowings go to pay for interest on the existing debt, more tax cuts, a war, and other such non-productive special interests.

So what happens when the jig is up for the country? The government will have but three choices:

1) To pay back the money honestly
2) To walk away from the debts
3) To print more money and pay off the debts with inflated currency

The first choice is a political impossibility. There is simply too much to be repaid at too high a cost. It will never happen. Likewise for the second. A default by the U.S. Government would be a last resort, worst case scenario that will be avoided at all costs. This leaves us with the third option, which means inflation. As the dollar is inflated, its buying power will gradually erode to a fraction of its current worth. At that time in the distant - or not too distant? - future, all savings and investments denominated in the currency - whether bank accounts or stock portfolios or mutual funds - will be equally devalued

How Much Will Your Dollars Be Worth?
While it is impossible to tell how much a dollar will buy in the future, we do know that the dollar has been losing value steadily since its decoupling from the gold standard in 1933, and this situation is unlikely to change. As Greenspan began a recent speech, "Although the gold standard could hardly be portrayed as having produced a period of price tranquility, it was the case that the price level in 1929 was not much different, on net, from what it had been in 1800. But in the two decades following the abandonment of the gold standard in1933, the consumer price index in the U.S. nearly doubled. And in the four decades after that, prices quintupled."

Translation: When the dollar was backed by gold, its value remained constant from the time of Washington and Jefferson until the roaring 1920s. Since the gold standard was removed 70 years ago, the dollar has proceeded to lose over 95% of its value! So the process of devaluing the dollar is already well underway. In time, like the German Reichsmark, 100% of its value will disappear.

Protecting Yourself
The problem with the dollar is that political forces control its issuance and therefore its value. The Fed is ostensibly independent, but in truth it bends to the political realities of the times. That paper currencies are ultimately destroyed is a property inherent to them. Like everything in our current society, even our money is ultimately disposable. Once the dollar has come to the end of its useful life, it will be cast aside without concern or care for your life savings, your well being, or the well being of any of your investments. This is a cycle that repeats itself over and over with governments and fiat currencies.

Remember, all paper assets today are simply the flip side of someone else's liability. The money in your bank account is loaned out to God knows where and is the bank's liability to you. The money in your money market fund is short-term debt that is loaned out to a number of corporations and governments throughout the world and is their liability to the fund. A stock certificate is the liability of the issuing company, and is only as good as that company. The creditor list for the United Airlines bankruptcy alone ran to 32,644 pages. Each bankruptcy spawns a whole new mountain of bad debts and drives more people and businesses into bankruptcy. More are on the way, which means more assets are at risk.

If the last few years have shown us anything, it is that without knowledge of the system and eternal vigilance, your assets are never safe. The U.S. dollar, the asset that is the measure of all other assets, is simply the liability of the U.S. government. Think about that for a moment: What kind of a balance sheet does this entity have? Is it a wise investment? If the U.S. government were a publicly traded company, would you invest in it?

It is a fiscally irresponsible entity that hasn't managed to balance its budget in years. Congressman Ron Paul, member of the House Banking Committee, has compared the U.S. Financial system to Enron. The U.S. government, like many companies, is an entity facing declining revenues and rising costs. And instead of addressing these issues, it is lowering taxes and increasing spending while busying itself making war half way around the globe. The control structure of this entity is becoming increasingly dominated by nepotism and special interests. As the Fed indicated last, this is an entity with a printing press, willing and able to issue more stock (i.e. dollars) at will and without shareholder consent.

The first piece of advice that any financial advisor will give you is to diversify your investments. So why is it that most people invest in assets that are denominated 100% in a single asset: the U.S. dollar?

The Golden Alternative
While everyone in the world has been scrambling over one another to buy and hold U.S. dollars in the last several years, there is a better alternative: Gold.

Gold is very different from paper money. Over the centuries and millennia, we have seen that gold holds its value. It is a storage place for value, unlike paper monies that come and go with the tides of history. This is because gold cannot be created from nothing. It is both liquid like a currency, and real like property and is one of the few remaining assets in the world that is not someone else's liability. Your dollars are and will ever be the liability of the U.S. government.

Gold's recent rise in price as world tensions have increased demonstrate that it remains the premier financial safe haven in times of instability. The barbaric metal increases in value as men behave more and more like barbarians.

Timing is not Everything
The dollar is in the midst of a devaluation that has been occurring for the past 70 years. Few people see it. My father talks of buying a hamburger, fries and coke for a quarter after seeing a double feature for a dime. In 1930 he spent 35 cents on what would cost twenty dollars today. The dollar will continue to lose value on its inevitable march towards final destruction. When this will occur is an entirely different matter. The debate is alive and well as to whether we will see deflation before the ultimate hyperinflation. It is my opinion that this is a moot point, because my purpose for purchasing gold is not as an easy-money, get rich quick scheme. It is about the preservation of existing wealth.

If you want a get-rich-quick scheme, try investing in an S&P 500 index fund. Put your money in the Dow and wait for Dow 36,000 and see how quickly you get rich. Gold is about preserving the value of what you have worked for and protecting it from the political whims of the powers that control the value of the dollar. Gold is a safe haven in the increasing tempest of financial instability created by the current international fiat currency regime. If you haven't done so already, start buying gold now.

Comments, or to be notified of new articles:

Quelle (http://www.depression2.tv/chronicles/pop-3.html)


23.01.2003, 20:23
König Dollar auf der Guillotine

von John Mauldin

Wohin wird der Dollar tendieren? Gen Süden natürlich. Das US-Handelsbilanzdefizit steigt weiter. Es liegt bereits jetzt bei 5 % des amerikanischen Bruttoinlandsprodukts – mit Tendenz Richtung 6 % –, und ein solches Niveau bedeutet normalerweise, dass es zu einer ernsten Korrektur des Wertes der Währung kommen wird. Aber auch wenn der Dollar schon gefallen ist – besonders gegenüber dem Euro –, so ist er doch noch nicht so tief gefallen, wie man erwarten könnte.

Der Dollar hält sich noch relativ gut, weil China seine Währung im Verhältnis zum Dollar fixiert hat. Und der Rest von Asien befindet sich in einem Abwertungs-Wettlauf, um zu sehen, wer die eigene Währung am meisten abwerten kann, damit die US-Konsumenten angezogen werden. Die Welt – und besonders Asien – wird weiterhin vom US-Konsumenten abhängig sein. Die Welt verkauft den USA ihre Produkte gegen in den USA gedruckte Dollar, und mit diesem Geld werden dann amerikanische Anleihen und Aktien gekauft. Die Ausländer halten entweder 35 % (laut BCA Research) oder 42 % (laut Morgan Stanley) der amerikanischen Staatsanleihen. Laut Morgan Stanley sind auch 18 % der US-Aktien in ausländischem Besitz. Warum sollten ausländische Zentralbanken weiterhin große Dollar-Reserven halten, wenn es klar ist, dass der Dollar überbewertet ist? Nun, sie haben nur zwei Alternativen: Schmerzen jetzt – oder später. Politiker sind überall auf der Welt gleich ... sie werden immer die Schmerzen erst später erleiden wollen, auch wenn sie dann noch härter sein werden.

Wenn ein Land aufhört, Dollar zu nehmen und damit US-Anlagen zu kaufen, dann wird die Währung dieses Landes im Verhältnis zum Dollar steigen – und das wiederum macht die Produkte dieses Landes für die amerikanischen Konsumenten weniger attraktiv. Das ist für exportabhängige Volkswirtschaften ein Desaster, besonders für die Politiker, weil es dadurch zu einer Rezession kommen wird. Deshalb werden die Ausländer die amerikanischen Konsumausgaben auch weiterhin unterstützen. Der Insight-Newsletter von Gary Shilling berichtet, dass Kanada, Mexiko, China und Japan für fast die Hälfte des amerikanischen Außenhandelsvolumens aufkommen. Der kanadische Dollar hat gegenüber dem US-Dollar in den letzten 12 Monaten relativ konstant verhalten, der Yen und der Peso haben jeweils rund 10 % verloren. Die chinesische Währung ist an den US-Dollar gebunden, so dass es hier keine Kursschwankungen gab. Mit anderen Worten – diese Währungen haben alle seit- bis abwärts gegenüber dem Dollar tendiert. Das sollte man bedenken, wenn man den deutlichen Kursrückgang des Dollar gegenüber dem Euro sieht.

Gibt es ein Limit zur aktuellen Entwicklung? Natürlich. Die USA können nicht mehr als 100 % ihrer Aktien und Anleihen and Ausländer verkaufen, und sie verkaufen ca. 500 Milliarden Dollar. Wenn das in diesem Tempo weitergeht, dann wird das Ausland in 10 Jahren alle US-Staatsanleihen besitzen, auch bei steigenden Defiziten. Das ist sicherlich keine tragbare Entwicklung.

Wann wird es schmerzhafter sein, überbewertete Dollar zu akzeptieren, als weniger in die USA zu verkaufen? Ich denke, das wird dann der Fall sein, wenn China seine Währung floaten lassen wird. Die asiatischen Länder wollen nicht unbedingt einen überbewerteten Dollar, sie wollen einfach, dass ihre eigene Währung in Relation zu ihren Nachbarn am vorteilhaftesten bewertet ist. China ist in diesem Prozess der Gorilla: Wenn China seine Währung, den Renminbi, steigen lässt, dann werden auch die anderen asiatischen Staaten ihre Währungen steigen lassen können. Das wird dann das reale Ende des Dollar.

Interessanterweise mehren sich weltweit die Stimmen, die die Chinesen auffordern, den Renminbi floaten zu lassen. China hat bis jetzt auf diesen Druck noch nicht geantwortet, aber wie alle Länder wird es dann reagieren, wenn es denkt, dass es im eigenen Interesse liegt. Das wird wahrscheinlich dann der Fall sein, wenn die Chinesen finden, dass ihre eigene Konsumnachfrage solide wächst und dies eine mögliche Abschwächung der Verkäufe in die USA überkompensieren kann. Die große Frage ist, wann das der Fall sein wird ... und deshalb kann der Dollar bis auf weiteres überraschend stark bleiben, wenn er eigentlich fallen sollte. Aber Chinas Entscheidung, den Renminbi floaten zu lassen, könnte der Überraschungszug sein, der die Dominokette zum Fallen bringt.

Europa ist die einzige reale Ausnahme die es gibt, wenn es um ausländische Unterstützung für den Dollar geht. Die Europäische Zentralbank (EZB) scheint bereit zu sein, den Dollar fallen zu lassen. Und trotz des schwachen Wirtschaftswachstums in Europa ist es meiner Meinung nach wahrscheinlich, dass der Dollar gegenüber dem Euro weiter verlieren wird.

Für einen Euro muss man derzeit rund 1,07 Dollar bezahlen. Das "natürliche" Ziel des Dollar für die nächsten 12–18 Monate – wenn nicht früher – liegt bei rund 1,17 Dollar, dem Niveau, auf dem der Euro vor ungefähr 4 Jahren startete. Europa wir sich einem noch weitergehenden Dollarverfall wahrscheinlich widersetzen ... bis China seine Währung floaten lassen wird. Bei den Währungsmärkten handelt wirklich jeder Staat bzw. jeder Währungsblock nach seinen eigenen Interessen. Das bringt uns natürlich zu dieser internationalen Währung: Gold.

Der Goldpreis ist endlich abgehoben. Er ist zum heißen Investment des Jahres geworden, 2002 legte er rund 30 % zu. Ich denke, dass der Goldpreis noch Luft nach oben hat. Die Zentralbanker haben keine geheime Verschwörung, um den Goldpreis künstlich niedrig zu halten. Sie wollen einfach das verkaufen, was sie haben. Sie verstehen dieses gelbe Zeug nicht, und sie wollen es nicht besitzen. Wenn der Goldpreis steigt, werden sie mehr verkaufen. Sie ziehen Papiergeld dem harten Metall vor, und wenn der Dollar weitere 10 % gegenüber dem Euro fallen wird, dann könnte man schnell einen 10 %igen Kursanstieg beim Goldpreis sehen. Weil der Goldmarkt ein Markt mit nur langsam wachsendem Angebot ist, könnte der Goldpreis auch relativ schnell anziehen, wenn die Zentralbanken sich dazu entscheiden sollten, ihre Verkäufe zu begrenzen. Wenn die Absichten der Zentralbanker mit der Richtung des Marktes übereinstimmen, dann sollte man aufpassen. Ja, es ist möglich, dass der Dollar nicht weiter fällt ... aber es gibt keine Diskussion darüber, dass er fallen sollte. Deshalb werde ich auf lange Sicht weiter ein Freund von Gold und Goldminenaktien bleiben.

Quelle (http://www.investor-verlag.de/)


24.01.2003, 08:57
Ein Trend ist ein Trend und bleibt ein Trend:D:


Und das bleibt so, bis er gebrochen ist :cool:.

syr :)

25.01.2003, 18:09
Saturday January 25, 4:34 AM

Dollar's Decline Starting To Accelerate, Rattling Nerves

By Grainne McCarthy

NEW YORK (Dow Jones)--All of a sudden, the dollar's supposedly slow and gradual decline isn't looking so slow, or gradual.

In fact the speed of the dollar's slide, against the euro in particular, has taken even the most seasoned analysts by surprise: a Dow Jones Newswires foreign exchange survey just ten days ago showed the major currency trading banks forecasting the euro climbing to $1.06 by the middle of February and not coming near $1.10 until the end of the year.

Instead, the euro has leaped to highs of around $1.0850 on Friday and has already gained 4% on the dollar this year, leaving strategists increasingly scrambling to update their forecasts. The Swiss franc keeps reaching fresh four-year highs, and the dollar is on the ropes against sterling and a host of other key rivals.

"When you look back, all of these small steps are making up for a giant leap, particularly for the euro," said Alan Ruskin, research director at 4Cast financial consultancy, in New York.

To be sure, the fact that the dollar is in a bear market is no surprise. The currency lost 15% against the euro last year and 10% against the yen, marking the dollar's steepest fall since after the stock market crash of 1987. But many economists have routinely argued that the greenback's decline was mostly a good thing for the U.S. economy, because it was taking place slowly and in an orderly manner at a time when U.S. manufacturers could badly do with some sort of competitive edge.

At the same time, a gradual decline in the currency - as against an outright freefall along the lines of the dollar's 13% slide against the yen during two hectic days of Oct. 1998 - helps to limit the fallout on other U.S. asset markets. But with the dollar continuing to slip this month below apparent lines of technical support, mostly on the resounding drum of war emanating from the Bush Administration, market participants are beginning to ask whether the currency's fortunes will spark broader questions about confidence in U.S. assets.

"Right now we're not there but we could get there," said Ruskin. "We could be in a situation where we're putting two and two together and getting 22."

He said that if the U.S. declares war on Iraq, the stock market could start to slide, which would feed further dollar weakness, creating a vicious circle where foreign investors liquidate U.S. assets and thus put pressure on the dollar, which further inspires more liquidation.

For now, implied foreign exchange volatilities are holding fairly steady and the major currencies are able to absorb greater volume fairly seamlessly.

Perhaps a more important barometer of broader confidence in U.S. markets is the Treasurys market. With the dollar falling, gold spiking and stocks under pressure, Treasurys continue to retain their safe haven appeal.

But there are warning signals here, too, that are beginning to get more attention. This week, the Russian central bank said it was lowering the U.S. asset portion of its foreign exchange reserves - in other words selling Treasurys - calling the dollar a low-yielding currency.

Analysts believe some of the large Asian central banks - that between them hold the lion's share of the world's dollar reserves - are also considering rejigging their Treasury holdings. A U.S.-led war in Iraq could further accelerate that trend.

Indeed, some political analysts believe that U.S. policy over Iraq may already be having a direct impact on holdings of U.S. assets, particularly with much of the rest of the world so opposed to war. "It's hard for me to believe that the flow of capital cannot help but be affected by how the U.S. is perceived around the world," said Larry Greenberg, an international economist at Ried Thunberg & Co. in Westport, Conn.

This renders next week particularly important for the dollar, with a slew of potentially significant trendsetting events, including Chief U.N. weapons inspector Hans Blix's report to the U.N. Security Council Monday, President George W. Bush's State of The Union address on Tuesday and the confirmation hearings for Treasury Secretary nominee John Snow. For the pace of the dollar's fall, developments concerning the prospect for war will likely rein paramount.

"Today if you have the U.S. acting (in Iraq) against world opinion, there could be an even faster pullback out of dollar-denominated assets," said Joseph Quinlan, global economist with Johns Hopkins University, in Washington. "How we go to war influences the rate of decline of the dollar," he said.

-Grainne McCarthy; Dow Jones Newswires; 201 938 2381; grainne.mccarthy@dowjones.com

Quelle (http://sg.biz.yahoo.com/030124/15/36tiv.html)


26.01.2003, 12:10
JANUARY 23, 2003

DAVOS, 2003


Currency Whiplash Ahead?

The prospect of wild swings in global exchange rates is worrying the financial and economic honchos at the World Economic Forum in Davos

After two years of plunging equity markets and economic turmoil, the world could be headed for a prolonged period of dramatic currency gyrations. That's a big fear of many policymakers, investors, and business executives who are gathering in Davos, Switzerland, for this year's World Economic Forum. Volatile exchange rates hurt companies by making it difficult to set prices, control costs, and predict revenues. They alarm investors because they can quickly wipe out the value of their international portfolios. And they're a nightmare for monetary policymakers because they can undermine the impact of interest rate adjustments.

"The strong rise in the euro over the past two months has already neutralized the [50 basis point] interest rate cut the European Central Bank made on Dec. 5," says Jürgen von Hagen, economics professor at the Center for European Integration Studies at the University of Bonn in Germany.

UNPREDICTABLE MOVES. Sudden currency swings can also hurt entire economies by making exports uncompetitive or imports more expensive. Take the unexpected 17% rise in the euro's value since January last year. European businesses complain that it's making their goods more expensive abroad, sapping their revenues, and curbing already anemic growth. They dread the single currency strengthening even further against the dollar.

It wouldn't be so bad if it were possible to predict precisely where currency markets are heading over the medium and longer terms. But even the experts disagree. Gail Fosler, chief economist of CEO group The Conference Board, forecasts that the greenback could soon regain all the ground it has lost over the past year -- and then some. "We could see it at higher levels than ever before," she predicts. Fosler says a speedy and victorious war in Iraq, followed by a reduction in oil prices, stronger U.S. consumer confidence and a rekindling of economic growth would all be good for the dollar.

She adds that the continuing love affair of Asian countries -- especially Japan and China -- with the greenback will sustain it over the longer term. "The Far East is basically a dollar zone," she says. "The dollar is the main medium for trade and investment there, so demand for it will remain strong."

WANING DOLLAR ARDOR? Not all analysts see it this way, however. Stephen S. Roach, Morgan Stanley's chief economist, says it's hard to envision a strong economic recovery stateside in the near future, even with the huge tax cuts proposed by President George W. Bush.

And Chinese officials say their appetite for the dollar could wane. Zhu Min, general manager and economic adviser to the Bank of China's president, says the mainland is less dependent on the U.S. as a market than it once was. As the world's most populous country and fastest-growing economy diversifies its trade relationships, its interest in the euro is growing. "I can't confirm the view that Chinese businesses will continue to help underpin the dollar's value," he cautions.

Asian investors' enthusiasm for dollar-denominated assets could also cool, taking away some support for the greenback. In the 1980s, Japanese and other Asian investors snapped up American securities while the U.S. ran up huge budget deficits and a widening trade gap with the rest of the world. But today, these foreign investors aren't as enamored with Treasury bills as they once were, and they might steer clear if the U.S. starts running up the red ink again.

USELESS WIZARDRY. However, if the Iraqi impasse drags on or the U.S. gets bogged down in a long war, all bets about the greenback are off. "The dollar could plunge suddenly -- and erratically," worries the CFO of one large euro-zone bank. "I've not seen the currency markets this uncertain since the mid 1970s, when the Bretton Woods system collapsed."

The prospect of a roller-coaster ride in currency markets is unnerving to many businessfolk, especially those with large foreign operations. While they can partially protect themselves against short-term currency swings by hedging their foreign-exchange exposure, it's nearly impossible for them to protect themselves in the longer term, especially if currency movements do become very erratic. Besides, all the financial wizardry in the world can't stop a business or country from losing its competitive edge if the national currency suddenly goes through the roof.

And the most worrying possibility: Currency volatility could undermine weak global economic growth and increase the likelihood of a double-dip recession -- especially in Europe. Indeed, German growth has already slipped back into negative territory, and the rest of the euro zone could soon follow suit.

Roach thinks U.S. growth could also stall this quarter partly because of currency jitters. "Things are bad enough already," says the bank CFO. "These currency concerns can only make them worse." Small wonder for the anxiety in the Alps as Davos gets under way.

By David Fairlamb at the Word Economic Forum


17.02.2003, 23:25
Update on the long-term Dollar bear

The Big Picture

Below is a long-term chart comparing the US Dollar (represented in this chart by a trade-weighted exchange index of the US$ relative to other major currencies) with the US quarterly current account deficit. We originally included this chart in our 16th December commentary in order to make the point that once a major US$ downtrend gets underway it continues until the US current account moves into surplus. The shaded areas on the chart highlight the periods from the start of each major dollar decline to its conclusion. Obviously, we don't yet know the date at which the current dollar decline will end, but we can be confident that this date will be many years into the future since the corrective process (the process through which the large current account deficit shrinks and eventually becomes a surplus) has only just begun. As such, there is probably not going to be any reason to be anything other than long-term bearish on the US$ for quite some time.


The above may seem overly simplistic, but we think it is the correct 'big picture' view. Furthermore, this long-term downward trend for the US$ will, in our opinion, continue to be one of the most important drivers of the long-term trends in other markets (gold, stocks, commodities, bonds). For example, the long-term trend towards a weaker dollar has helped create, or will help create, the following:

a) A long-term bull market in gold

b) A long-term bull market in commodities

c) Relative strength in those sectors of the stock market that benefit from a weaker dollar (e.g., the stocks of commodity producers) and relative weakness in those sectors of the market that benefit from a stronger dollar (e.g., the bank stocks).

d) A long-term bear market in bonds

An argument could be made that the commodity bull market will only be apparent when commodity prices are measured in US$ terms, as has been the case over the past 12 months. However, attempts by central banks throughout the world to reduce the rate of the dollar's descent by weakening their own currencies will likely result in broadly weaker fiat currencies relative to commodities.

The Technical View

Below are 3-year charts of the Dollar Index and the S&P500 Index. Both charts show that prices have been moving lower along well-defined trend-lines in the same way that a ball might bounce down the side of a hill. Each time the ball (the price) hits the side of the hill (the trend-line) we get a bounce, a 'rolling over' as gravity (over-valuation) exerts its influence, and then another plunge.


The S&P500 reached its major peak well in advance of the Dollar, but the respective downtrend-lines were hit together in September-2001 and July-2002. Interestingly, the Dollar recently returned to its major downtrend-line (the point from which substantial bounces usually begin) while the S&P500 is still well above its own trend-line. One way to interpret this divergence is that we are currently seeing a very weak bounce in the Dollar that will be followed by a drop to the trend-line at a slightly lower level (the mid-90s) during the next 1-2 months. And, that this next low in the Dollar will coincide with the S&P500 hitting its own trend-line. This is, in fact, how we interpret the charts because a) gold stocks are yet to signal an intermediate-term peak in the gold price (gold is likely to reach an intermediate-term peak at around the same time as, or before, the US$ reaches an intermediate-term bottom), and b) the Dollar's short-term chart pattern suggests there will be one final leg down to a lower-low before a substantial multi-month 'bounce' gets underway.

Steve Saville


Quelle (http://www.speculative-investor.com/new/article140203.html)


03.03.2003, 21:26

Jim Rogers, 3/3/2003

In late January, the Senate confirmed John Snow as our new U.S. Treasury Secretary, the 73rd in the government agency’s two-hundred plus year history. Snow, like Paul O’Neill and Robert Rubin before him, promised to follow a strong dollar policy and take steps to help spur on a U.S. economic recovery and long-term growth.

Well, I know you’ve just started your new job, Mr. Snow, but I’ve got some sobering news for you. You and your pals can keep talking about this alleged "strong dollar policy" until you’re blue in the face, but it’s not going to make a lick of difference if you don’t start managing our currency more responsibly. The dollar is not just in decline; it’s a mess. If something isn’t done soon, I believe the dollar could lose its status as the world’s reserve currency and medium of exchange, something that would lead to a huge decline in the standard of living for U.S. citizens like nothing we’ve seen in nearly a century.

"Oh, Jim," the disbelievers crow. "You’re just being extreme. That would never happen. After all, the dollar has reigned supreme for several decades"

True, but it seems to me that people forget that that supremacy isn’t a gimme. A sound currency, after all, reflects solid economic fundamentals: little to no debt, a trade surplus, a stable balance of payments—the difference between a nation's receipts of foreign currency and its expenditures of foreign currency—and growing international reserves.

That’s not exactly the picture you get when you look at the U.S. balance sheet. Our national debt to foreigners is now around $6.4 trillion, with interest payments alone last year totaling $333 billion. We’re importing far more goods than we are exporting. International reserves remain around $60 billion, but we’re attracting far less direct foreign investment every year. Our current account deficit runs at roughly $500 billion a year, or five percent of our gross domestic product. Think of it this way: It costs us about $1.3 billion a day in the foreign markets just to keep the dollar afloat. We’re like the untrustworthy brother-in-law who keeps borrowing money, promising to pay it back, but can never seem to get out of debt. Eventually, people cut that guy off.

As a result, the U.S. dollar continues to fall against its foreign counterparts, down 18 percent against the euro in 2002 and 10 percent against the yen. That’s not the worst it has been in history, but it’s certainly a substantial slide. With a war, a slow economic recovery and future threats of terrorism looming on the horizon , there’s little reason to believe things are going to improve.

What’s worse, little is being done by Washington’s economic gurus to pull us out of our economic quagmire. Faithful readers know I believe Alan Greenspan is the grand maestro of this economic debacle. Our esteemed Federal Reserve chairman is the first to “buy any assets” or lower interest rates to pump money into the economy and give investors the illusion that things aren’t as bad as they really are. Sometimes I wonder if our central bank is just going to print money until we run out of trees. People say that inflation is a dead issue, but you wouldn’t guess that shopping where most of us buy things.

History teaches us that such imprudent fiscal behavior has always led to economic disaster. During the early 1920s, rampant inflation destroyed the value of German currency. German workers had to be paid twice a day just to survive; it took a wheelbarrow full of bills just to buy a loaf of bread. In England during the 1970s the government continued to boost its money supply, injecting its economy with liquidity, until debt levels spun out of control. Suddenly, no other countries would buy their sovereign bonds. Finally, the International Monetary Fund had to step in and bail the Brits out. Quite a shift for a country that only 50 years earlier was one of the richest nations in the world. Want a more current example? Just look south, to Argentina, where its currency recently lost so much value that the government prohibited its citizens from making withdrawals at the bank.

So why doesn’t our government do something about our flagging currency? At least over the short-term, the declining value of the dollar does have its perks. A declining dollar is certainly good for domestic manufacturers who must compete with foreign companies. As the dollar drops, their manufacturing costs decline and it's much easier for these companies to compete. The global economy is already sluggish, and the falling dollar makes U.S. exporters far more competitive. Again, it’s the illusion that things are better when they really are not.

Remember also: Our manufacturers may be better off, but foreigners then suffer so the world as a whole shows no improvement. That is why similar practices in the 1930s were known as “beggar thy neighbor”.

While this helps U.S. manufacturers, it’s not necessarily good news for consumers. The cost of imports, like foreign cars and foreign liquor, will rise. Since foreign goods become more expensive, U.S. companies may respond by raising their prices, even slightly, because they can. In the end, the dollar loses value, but we’re still paying the same real amount for many goods.

The bigger problem for the American economy is that foreign investors and foreign governments may soon lose their appetite for the declining U.S. dollar. Interest rates, which are now absurdly low, will need to rise to give foreign investors an incentive to invest and hold on to our currency. If not, these foreign governments and investors may look for somewhere else to hold their money. Historically, when investors recognize that a currency is being debased or devalued, they tend to look for sanctuary in currencies that remain stable at the insistence of the population. For years, the Swiss franc was synonymous with monetary stability. :cool:

While currencies like the Swiss franc or the Japanese yen or the Danish krone—all of which I own—are in better shape that the U.S. dollar, I don’t have a whole lot of confidence in them either. All of these countries’ governments have adopted the U.S.’s dangerous habit of manipulating their own currencies to compete in the world market. It’s a double-bind of sorts: Singapore’s government wants to keep its currency strong and sound, but if every other country’s currency is declining against the Singapore dollar, their exports become prohibitively expensive and it becomes impossible for them to compete. They are forced to play the monetary monopoly, shuffling the money supply, adjusting interest rates, just to make their products competitive.

And what about the Euro? It’s certainly stronger than the U.S. dollar, which is down 18 percent against the euro for 2002. I believe the success or failure of the Euro is one of the most important questions of the twenty-first century, one with profound implications on the global economy. The world needs the Euro, because it needs an alternative to the dollar. There really are only two currencies with enough liquidity to be the world’s currency—the U.S. dollar and the Japanese yen. (The Swiss may have a sound currency, but there just aren’t enough francs out there.) The European Union has everything going for it—an enormous population base, a balance of trade surplus. Most of its nations are creditors, not debtors. If the Euro succeeds, people may actually stop using the dollar as a medium of exchange and as a reserve currency.

That said, I believe that the Euro is a flawed currency. Many of the European Union’s 12 member nations just don’t run a tight ship. Germany, which became the poster boy of fiscal responsibility in the mid-twentieth century, has again started running up huge debts. (Have they forgotten about the wheelbarrows?) The Portuguese are running an enormous deficit. What’s going to happen when these countries can’t balance their books? Is Brussels going to send tanks into Lisbon? I doubt it. It may take years, even decades to root out all the problems in the EU’s inherently flawed system. Remember: Hundreds of billions of dollars (yes, dollars, for the moment) have been invested in this new currency. Banking systems have changed. Accounting systems have changed. Even parking meters have changed. If it fails or even struggles, there may be huge economic losses.

How long does the dollar have? A year? A decade? I’m not so sure. As long as there’s no other currency stepping up to the plate and EU continues to struggle with the euro, the U.S. government will likely be able to continue to jigger the books, essentially floating our enormous tab on the backs of the rest of the world.

But remember: Whenever there has been an economic crisis like this, a new player has always emerged on the economic landscape. A century ago, few people would have believed that the dollar was going to emerge out of the 19th century as the dominant world currency. There’s always a phoenix that rises from the ashes. Who will it be for the 21st century? My guess is the Chinese yuan may eventually have its day in the sun. The nation has a recipe for a sound currency—a huge population, an enormous balance of payments surplus, and a sizeable GDP to match. China is now the world’s largest importer and the world’s second largest creditor (Japan is first). For the moment, its currency is not convertible, which must change now that it has been admitted to the World Trade Organization. There are still a lot of cultural barriers to get over—rampant xenophobia and fear of capitalist interests—but nothing assuages fears like steady flows of money into your coffers.

Gresham’s law says that bad money tends to drive out good money. Well, whether we like it or not, whether we want to believe it or not, the U.S. dollar has become bad money. Despite proclamations from Washington about a strong dollar policy, I see no reason to believe that the dollar won’t continue to decline, that we won’t continue to borrow like beggars and put Band-Aids on gaping wounds in our monetary policy. That is, until the day when our creditors say enough is enough. And that day may not be far off.

Quelle (http://www.jimrogers.com/content/stories/articles/THE_DOWNWARD_SPIRAL.htm)

syr :rolleyes:

11.03.2003, 22:48
Gold, Inflation and the Dollar

Steve Saville
11 March, 2003

The Gold Bull Market

Towards the end of last year the Fed confirmed that it would increase the supply of dollars by whatever extent was necessary to cause prices to rise. At the time that Fed representatives Greenspan and Bernanke made this promise the US$ had already been trending lower and the US$ gold price trending higher for 2 years, but having the Fed spell-out its intention to devalue the dollar should have been a wake-up call to the markets. In particular, it should have been a wake-up call to those who perceive deflation to be a clear and present danger. Those who expect deflation to occur in the US over the next 2 years must think Greenspan and Bernanke were lying when they promised to do whatever it took to de-value the dollar or they must not understand the power the Fed possesses in the field of currency creation.

If the Fed stuck to its traditional modus operandi and simply adjusted bank reserves in order to maintain a short-term interest rate (the Fed Funds Rate) at some arbitrary target level, then under certain conditions Greenspan and Co. would not be able to facilitate an increase in the supply of money. This is because they would necessarily be relying on individuals and corporations borrowing more money into existence in response to the lower short-term rates. But, if people were already 'tapped out' or returns on investment were very low then even a zero percent interest rate might not prompt significant new borrowing. The Fed's power is not, however, limited to the targeting of short-term interest rates. In order to increase the supply of money the Fed could, if it chose to do so, purchase private assets such as stocks, corporate bonds and real estate using newly-printed dollars. So, the question isn't whether the Fed has the power to inflate, the question is whether it will choose to inflate and by how much. Fortunately we don't need to guess the answer to this question because the Fed has already given us the answer. We can therefore be very confident that the price of gold is going much higher over the next few years and just concern ourselves with the path it is going to take to get from where it is now to that much higher price.

The Dollar - current market situation

Below is a chart of the Dollar Index showing the 'hill' (the trend-line) that it has been bouncing down over the past 2 years.


After the Dollar hit the trend-line shown on the above chart in early-February we said that the decline did not appear to be complete and that another test of the trend-line would likely happen in the near future. That test has just occurred, so from this perspective the Dollar is very close to an intermediate-term bottom.

From an Elliott Wave perspective an important bottom also appears to be close at hand. It looks like the Dollar is in the 5th (final) wave of the decline that began in July of 2001. This 5th wave has, in turn, evolved in a clear 5-wave pattern with the Dollar now being in the final wave (labeled as (v) on the above chart).

Further to the above, the current phase of the Dollar's bear market (the phase that began in July of 2001) is probably almost over and a multi-month correction should soon begin. However, we are confident that the Dollar will trade significantly lower before this year is over (we expect that the October-1998 low (around 92) will be tested this year). Also, the fact that the US current account deficit has not yet begun to improve indicates that the Dollar index will trade well below 90 during 2004 (based on historical precedent, the Dollar's exchange value will keep trending lower until the US is running a quarterly current account surplus).

Note that although the Dollar is probably close to a low it is yet to provide any technical confirmation that a low is in place. As is the case with the stock market we expect that a low will be in place before the end of this month, but a final downward spike (to around the 95 level) is possible over the coming 2-3 weeks..

Steve Saville
email: sas888@netvigator.com
Hong Kong
11 March, 2003

Quelle (http://www.321gold.com/editorials/saville/saville031103.html)


17.03.2003, 15:01

Pravda.RU: USA

17:17 2003-03-1417:17 2003-03-14

Dollar to Step Down Ahead of Saddam

Numerous leaks of information and analysis of activities of the US authority are a sufficient basis to forecast further development of the US economic policy. This estimate is extremely important as it will further determine future situation in the world in many respects.

After “cleansing” in George W. Bush’s economy team caused, as the American press reports, by the reluctance of Paul O’Neil and Larry Lindsey “to pay attention to demands of the US economic elite”, it became evident that top-priority principle of American economy authority is to preserve the Wall Street investment banks. From the point of view of these banks, step-by-step, which means slow, dollar devaluation is the key danger. If it happens, it is highly likely that holders of futures contracts may prefer other currencies to dollar, which in its turn will seriously imperil position of the investment banks as monopoly operators on the market and the whole of US system for control over the world economy based on these markets.

High oil price that exceeds the traditional “war premium” is an indirect indication of initiation of this process. To all appearances, the problem is that sellers have already implicitly placed the dollar devaluation into the oil price; it means that sellers rely not upon dollar but upon some more stable values in their calculations. Is it possible to avoid further dollar devaluation? The latest statistics on the rate of the foreign trade balance (13% in November and 10% in December 2002, at the time when dollar was on the decline) and Federal Reserve Chairman Alen Greenspan’s report on a catastrophic condition of the budget delivered in the US Congress (he said that the process must be carried out as soon as possible) demonstrate it is impossible to avoid the scenario. This is the only way to prevent financial markets from giving up the dollar. At that, on results of this devaluation the US authorities plan to demonstrate the whole of the world that dollar won’t drop any further!

Alen Greenspan partially gave an answer to the question what can be done with the economic situation in his report in December. Arguments on “the gold standard” show that dollar may be once again made dependent upon gold, like in the time of Bretton-Woods. However, a serious problem arises in this connection. The gold supply in the world, especially in the USA is not enough to make dollar dependent upon gold effectively. Even grave devaluation carried out simultaneously with increase in gold price won’t solve the problem. In this situation, the USA has two mechanisms that would guarantee a necessary result.

The first mechanism is a confiscation reform, similar to that one carried out by Franklin Roosevelt in the 1930s. Fixation of dollar to gold will allow the US Government to make private individuals exchange gold they own for dollars at a fixed rate determined especially for this purpose.

Another mechanism is a currency reform. Cash dollars held by US residents will be accepted on territories controlled by America without any limits, but non-residents may have problems in this situation. It is highly likely that bank transfers to US resident banks and exchange of dollar notes may be restricted for non-residents. This may be explained by the necessity to hold a special check-up in the network of the “anti-terrorist campaign.” This operation (and new, so-called “pink dollars” are already printed) will not only cut off a considerable part of cash dollars but will also give the USA a powerful instrument of influence upon all countries of the world.

However, this is not enough. It is also important to prevent processes that objectively may bring dollar down after it is made dependent on gold. US’s monetary authorities think that there is only one thing menacing this scenario; it is collapse of the market of mortgages on real property. And this market is tense enough now. And with an interval of just few days, Alen Greenspan says realty prices will reduce, and then chairman of the Federal Reserve System department in St.Louis William Poole delivers a panic speech saying that the market may collapse within the nearest days. Such conduct of the top officials can be explained one way only: they think that the market must be brought down before the described scenario starts, which by the way will give a formal reason for dollar devaluation.

There is hardly an alternative to the sad scenario: inevitable dollar collapse will seriously compromise it in the world, and the only way to rehabilitate it is to make dollar dependent upon gold.

But the USA is experiencing one more problem – decline of the economy which may bring the above mentioned scenario to nothing. It’s interesting to mention in this situation that opinion and positions of the US authority don’t completely mirror the actual economic processes.

From the point of view of the US leadership, the USA is at the stage of a protracted recession. Monetary methods of economic stimulation (reduction of the rate) brought no results, and something more must be done. The policy carried out by Ronald Reagan in the mid-1980s was picked out as an example. In fact, Greenspan’s criticism of Bush’s budgetary policy is connected with Reagan’s experience. The matter is that at that period economy was stimulated from budgetary finance, which further resulted in a sudden rise of the public debt, extremely high profitability of government bonds (it reached 17% per year), as a result, the Federal Reserve System rate was very high. In the end, dollar seriously reduced by 40%.

But in the middle of the 1980s there was no alternative to dollar, and the fact of the Soviet Union’s existence made other western countries support American economy actively. New advisors to George W. Bush (unlike his previous ones) evidently think that dollar devaluation will provide a considerable supply for further increase of the US public debt; they think that America’s victory in the Iraqi war will make old and prospective allies behave in a decent manner. This is the basic difference from the situation the country experience in the 1980s.

As we’ve mentioned, usage of Reagan’s economic model will inevitably entail dollar devaluation. According to the above mentioned reasons, it is impossible to delay dollar devaluation any longer, and it would be quite natural to unite macroeconomic dollar collapse resulting in normalization of the balance of payment and the foreign trade balance and devaluation connected with a sudden deficit of the budget. So, the events may develop in accordance with the following scenario: first, a war begins in Iraq with an aggressive PR backing; then, budgetary spending will be increased not less aggressively, and finally, early in autumn (and probably even earlier) dollar devaluation may be carried out and the US currency will be made dependent upon gold. The scheme wonderfully correlates with the already announced terms of the “pink dollars” introduction.

Why is the plan criticized at all? First of all, it is obvious that gold reserve will be quite enough. Second, realization of the plan is possible if everything goes OK in Iraq, which is open to question by the way. Third, it is not ruled out that many countries, most of all those influential with considerable dollar reserves, will strongly object to the plan. These are China, Japan, France and Germany. It is not for sure that these countries will object at all, it is just an assumption; however, Bush’s team stakes on assurance and aggressiveness.

And here finally comes the last argument which is probably not quite understood (and probably not understood at all) in Washington. All particular variants of the above mentioned economic policy have been certainly verified on the US economic models employed by different expert and scientific institutions of America. To all appearances, obtained results are contradictory which may cause conflicts in the ruling elite. But the models have one thing in common: they are all macroeconomic and based upon the invariance of the sectoral structure of the US economy. It is a natural condition, as the past years in the USA were marked with total dictate of liberal monetary principles in the economy.

But models based on the input-output balance are highly likely to bring quite a different result. Russian economists have already mentioned several times that structural disproportions in the US economy will entail immediate consequences as soon as rates on the US financial markets go up, and this is to happen for sure if the policy declared by George W. Bush is realized. At present, under conditions of a negative rate (and consequently, very low bank interest) branches of new economy may prolong and refinance their debts. When the rates increase, the process of structural defects improving will go on a large scale. As it was mentioned, the share of such nonviable enterprises and companies makes up about 20% GDP, and they will disappear right at the period when dollar dependent upon gold will, as the Bush administration plans, become stabilized.

After this large-scale collapse dollar devaluation will be not the only problem to be solved; it will also cause breakup of the international futures markets and entail more problems. And there are no guarantees that the Bush administration is ready for these very consequences of its policy.

The above mentioned situation looks very pessimistic, but this is almost a sure result of the actions already committed by the US administration, this is obvious from leaks of information and reports delivered by representatives of the Bush administration.

Mikhail Khazin

Quelle (http://english.pravda.ru/usa/2003/03/14/44429.html)

syr :cool:

29.03.2003, 07:29
Will the war crush the U.S. dollar?

By Robert Shapiro

March 26 — For months, the prospect, and now the reality, of war with Iraq have unnerved but not yet disrupted global currency markets. The odds are still small that the war will trigger a currency crisis. If it does, you’ll see it in a fast-falling dollar; and given our current sour relations with much of the G-7, we might not be able to do much about it.

IN THE INTERNATIONAL ECONOMY, more money is made or lost from currency movements—or at least, more money is made or lost faster—than any other way. Speculators such as hedge funds can sometimes make or lose a fortune overnight in currency bets, but the value of the dollar, the yen, and the euro are fundamentally driven by the normal transactions of the global economy. When a London bank buys U.S. Treasuries or shares in a U.S. company, or a Spanish firm buys computers from a U.S. maker, it has to use pounds or euros to buy dollars, so it can pay the American seller. The more demand for dollars to carry out the daily business of trade and investment, the more euros or pounds it takes to buy them.

The war has not been good for the dollar. Since last November, the greenback has fallen nearly 7 percent against a basket of other major currencies. First, Middle Eastern investors converted a lot of their dollar holdings and took them home: By the New Year, all the imponderables about the coming war left European and Asian investors reluctant to expand their U.S. holdings. The result has been less foreign investment in the United States, translating into less demand for dollars in world markets.

The war gave the dollar a shove, but it’s been sliding for more than a year—down almost 15 percent since early 2002. That makes French wine and Swedish cars a little more expensive here (though wartime feels like the right time to buy domestic). A falling dollar also leaves some Americans, and companies who employ a lot more of us, a little poorer. In 2001, private American holdings abroad were worth nearly $6.7 trillion—a third in direct foreign investments like factories and companies; another third in foreign stocks and bonds held by U.S. pension funds and others; and a third in various claims reported by U.S. banks and others. The dollar’s decline in the last four months has reduced the dollar value of these holdings by $445 billion; its fall over the last year cost more than $950 billion.

A falling dollar is bad news for a lot of people because greenbacks are also the global economy’s principal medium of exchange. Foreign producers of oil and many other commodities, along with a goodly share of global manufacturing companies, prefer payment in dollars to Saudi riyals or South Korean wan. Foreign governments, or at least their finance ministries, also usually like a steady dollar, since dollars make up two-thirds of the reserves they hold to back up their own currencies. The 15 percent fall in the dollar has made a lot of people in a lot of places a little poorer.

A weaker dollar, however, is good news for U.S. exporters because it makes their products cheaper in foreign markets. It also helps U.S. companies that compete with foreign imports, because a stronger euro or yen—the other side of the weaker dollar—makes imports more expensive in the United States.

The worst is probably yet to come, because the dollar’s decline reflects not only all the uncertainties about the war’s impact on U.S. growth, but also increasing concerns about a structural imbalance in the American and global economies. The core of the problem is that we don’t save enough. To keep spending and investing at the rates we have, we have to tap the savings of foreigners. The bookkeeping expression of this undersaving, or the amount we have to borrow, is the current account deficit—$503 billion last year. The biggest part of that is the trade deficit: In 2002, Americans consumed $435 billion more in goods and services than the United States produced, and we paid for the difference by selling hundreds of billions of dollars of assets to overseas buyers and borrowing the rest from abroad.

The currency and interest-rate markets usually police such undersaving. If any other country ran up $1.55 trillion in trade deficits over the last five years, as the United States has, foreign lenders and investors would step back, expecting overconsumption to heat up inflation or underinvestment to drive down growth. As they back off, the value of the overspending country’s currency would fall, interest rates would rise to attract lenders back, and growth would slow, until the country’s imports fell enough and its exports rose enough to correct the trade deficit.

Until recently, we ran large trade and current-account deficits without the dollar falling much, because our economy and our policies were so sound. Foreigners were perfectly happy to lend us funds or buy our assets, because the U.S. economy looked like the closest thing to a sure bet in the world. Moreover, we needed foreign investors less in the ’90s because the government’s shift from deficits to surpluses boosted our saving.

After three years of stock-market declines, stalled business investment, weakening consumer confidence, and low interest rates, the returns on investing in the United States look a lot less promising. The government’s U-turn in fiscal policy is just as worrisome to global investors. The return of large budget deficits will keep the trade deficit growing by stimulating spending, and it will guarantee that public and private credit demand will far outstrip our own saving.

The dollar’s fall in the last year tells us that, given these concerns, foreign lenders and investors have decided that they shouldn’t expand their U.S. claims and assets—$7.9 trillion at the end of 2001. So, they’re slowing the rate at which they buy here. Our choices are to cut the current account deficit by saving more and consuming less—that’s a positive spin on the current slowdown in consumption—or letting interest rates rise to ensure a more attractive return for foreign lenders.

The rest of the world, with its big investment in a stable dollar, could help, too. One win-win solution would be for other countries to open their markets to more service imports—banking services, engineering, information services, and so on. America leads in many service areas, so market opening would help our trade deficit; and imports of efficient services would make other countries more productive. Liberalizing service markets is part of the current round of trade talks. Unfortunately, our current sour relations with Germany, France, and others aren’t likely to inspire them to offer trade concessions that help U.S. service companies.

Given a bulging current-account deficit, slow growth, and a prospect of years of huge budget deficits, a bad war might just trigger a real currency crisis. In 1997 and 1998, Thailand, Malaysia, Indonesia, and South Korea found out how fragile prosperity can be when it depends on foreign capital that can be yanked when a currency weakens. We’re in a stronger position because our underlying economy is so much sounder and because foreign investors have so few other, plausible places to park their money.

But a currency crisis could still hit us like a hurricane. Suppose two or three of the top 10 things that could go wrong for us in the war do go wrong and the liberation of Baghdad begins to look like the siege of Stalingrad. That kills hopes for a quick victory-bounce in the U.S. economy, and foreign investors accelerate their shift from U.S. to European securities. As the dollar sinks along with our stock market, more foreign investors rush to sell, and the declining dollar turns into a run and finally a rout.

There are two ways to end a currency crisis like that: Hike interest rates far and fast to draw back capital, stalling economic growth as a consequence; or get the world’s major central banks to intervene in the currency markets by buying dollars. In the current diplomatic deepfreeze, I wouldn’t count on the European Central Bank. Instead, we would have to rely on Japan, China, and other Asian countries to bail the dollar out. These are all high-saving nations with large foreign-exchange reserves, and, more important, export-based economies that would be hit nearly as hard as we would by a cheap dollar. But that’s not a favor that an American president with his sights on North Korea might want to ask for.

Robert Shapiro, an undersecretary of commerce in the Clinton administration, is a fellow of the Brookings Institution and directs Sonecon, LLC, an economic consulting firm.

Quelle (http://www.msnbc.com/news/891133.asp?0si&cp1=1#BODY)

Interessant: Thread weit im "Plus" und dem Volk ist's ** wert :rofl... Dumme Amifreaks :dumm...

syr :lach

10.04.2003, 09:40

Middle East

A casualty of war: The dollar

By Dinkar Ayilavarapu
Apr 8, 2003

KOLKATA - When Mohammed Atta and company flew their planes into the World Trade Center, the symbol of America's economic power, they might well have not seen the impact the tragedy was going to have on that other symbol of American power, the dollar.

Much has been written about how September 11, 2001 affected the American economy, but the associated wars and military operations in the "war against terrorism" are also having a major impact on the status of the US dollar, with substantial damage likely.

A sick greenback

It wasn't like the dollar wasn't already sick. America has a current account deficit to kill for. It stood at US$462 billion, or about 4.7 percent of GDP in the third quarter 2002. This is expected to hit the 5 percent mark in early 2003.

To understand its significance, let's consider a household that is consuming more than it is earning (or producing). To pay for the extra consumption, it has to borrow as much as is overspent. Or in some cases, sell some of its assets. The current account deficit is like the excess consumption, and to pay for that a country has to borrow from abroad, which it does by running an equivalent capital account surplus. This capital account surplus (or the capital flowing in from abroad) can either be by borrowing from abroad or by selling domestic assets, just like our overspending householder.

Now consider the nightmare situation of nobody willing to buy the householder's assets or willing to lend. Then the householder is in a fix. He would just have to start earning more to pay for the extra consumption (or start consuming less).

This he can do by charging less for whatever he does, and thus getting more work, and in the process overall make more money. Similarly, in the economy, if there aren't enough foreigners to pump money for your benefit, you either have to export more or start importing less. And to do this the currency starts depreciating, making your exports cheaper and imports more expensive, thus reducing the current account gap.

America is running the largest current account deficit ever seen. And if it doesn't find enough foreigners to invest at home, the dollar might well have to take a knock. And attracting money isn't easy given the plunging interest rates. Add to this a sluggish US economy, which will make it progressively tougher to attract foreign investors. According to Stephen Roach, the chief economist at Morgan Stanley, this situation can't go on forever. And according to Herbert Stein's Law, things that can't go on forever don't. America has been there before. In 1985, when the current account deficit was less than it is now (as a percentage of GDP), a revision in market perceptions caused the dollar to drop from 240 to 140 against the yen and 3.3 to 1.8 against the Deutsche Mark.

That the dollar is sick and losing ground is shown by the fact that in the past year it has lost about 14 percent of its value on the trade weighted basis.

The war to save the dollar

Among the many theories on why the US is attacking Iraq is the dollar theory. The dollar derives its strength from the fact that the world trusts it over all other currencies. So even in the post Bretton Woods floating rate world, the dollar is a hard currency which central banks around the world hold as their reserve asset.

With the coming of the euro, which is backed by the third, fifth and sixth largest economies of the world, the dollar was threatened. But in the very near term, with the euro zone teetering on the edge of recession and deflation; it doesn't pose much of a threat to the dollar. The uncertainty associated with the new currency also prevented the dollar from being dethroned from its royal perch.

Saddam Hussein did his bit in weakening the dollar when he switched from selling his oil in dollars to doing so in euros. This he did as a statement of anti-Americanism. Iran is planning to make this transition to euros and even Venezuela is open to selling its oil in euros as opposed to dollars. It is also true that the Saudis are open to trading in both dollars and euros.

So there might have emerged a situation where a very large part of the oil in the world would have traded in euros, and not against dollars. This would have weakened the dollar's position as the world's reserve currency. Countries around the world would start switching to euros, and thus weaken the dollar. So it is claimed by some that America, which obviously benefits most from a strong dollar, was fighting to dethrone Saddam (and possibly Iran at a future date) to prevent the dollar from losing ground.

Add to this another theory about how Gulf War II is the solution for the economic trough in which America finds itself since the roaring 1990s - after all, World War II was needed to pull America out of the Great Depression of the 1930s. The Iraq war is supposed to be the great Keynesian adventure of the essentially neoconservative regime of George W Bush. In essence, the fighting in Iraq is supposed to be an economic bonanza for America - loads of oil, billions of dollars of reconstruction contracts, a big government push for the sluggish economy and the removal of irritants to dollar domination.

But look what the war has done

It may well not have been a war to save the dollar and the economy, because it doesn't seem to be doing so. In the short term, the dollar might get hit hard. The war raises two crucial questions - how will it be paid for? And what will it do to oil prices?

The oil question is significant because it has a major influence on the previously-mentioned current account deficit. Since America imports a substantial amount of oil, an increase in prices would widen the current account deficit that America is running. That would make it a lot tougher, if not impossible, for the US to attract foreign investment to plug the enlarged deficit. The dollar in such a situation might be in for a major market-led correction in value.

The Center for Strategic and International Studies (CSIS) in Washington DC in November last year talked of three war cases - the benign case, the intermediate case and the worst case. This classification was on the basis of how the war went and not on how it would affect the US.

The benign case involved a swift coalition victory, and the residents of Baghdad giving the marines a "Kabulesque" reception a la the driving out of the Taliban from Afghanistan. In such a case, with Iraq reviving production within three months and Saudi excess capacity able to weather the storm in the oil market due to Venezuelan and Nigerian disruptions (one due to the Bolivar revolution and the other due to worker discontent), oil prices would be normal by the third quarter. The current account would have been saved. The expectation of such a war pushed oil prices down instantly after the start of the war. But with the slowing advance, prices picked up again in the expectation of a longer, bloodier conflict.

The intermediate case is the more relevant one. In this, the coalition advance meets with resistance by the Republican Guard, there isn't a popular welcome for the soldiers, and no weapons of mass destruction are used. In this scenario the war ends within a few weeks, but guerilla attacks on the coalition forces persist for six months and raise questions about the stability of any new regime. This is the most likely outcome as things stand at present. But nothing can be said until General Tommy Franks is in Baghdad.

In this case, the CSIS predicts that oil prices won't fall below the $30/barrel range well into 2004. But this case needs to be amended - the Rumaylah oil fields in Iraq have been spared any extensive damage and are under coalition control, and the Nigerian oil worker strike has been put off. But even with oil prices in the ball park figure of $30/barrel, the damage to the US current account would be substantial. Let's not start talking about the worst case scenario just yet.

Another way in which oil prices harm the current account is by increasing the prices of goods that America imports. America's major trading partners in the North American Free Trade Area (NAFTA), Latin America and East Asia are heavily dependent on imported oil. So an oil price spike increases their costs of production, which is then passed on to the Americans who buy those goods. As a result, again the current account deficit gets bigger. We must note that this effect gets dampened by the higher prices that US exports fetch.

The budget is broke

Bush sent to congress an estimate of the cost of this war - $74.7 billion. The Congressional Budget Office is a little less optimistic, it prices the war and a two year occupation at $134 billion. Yale economist William Nordhaus goes further and prices the war between $100 billion and $600 billion, over a decade. And economist Martin Wolf, at the Financial Times, costs the war at between $156 billion and $755 billion over the next decade. Wars sure don't come cheap.

The problems with this war bill (like all others as well) is how to pay them. The previous Gulf war was paid for in part by the allies and other gulf states. This one, like the one in Vietnam, might have to be paid by Uncle Sam. The Bush administration has a tough choice to make - it either has to raise this kind of cash through taxes, which the way things have gone with the Bush tax reform is surely not likely to happen. So the other option is to borrow. Raising this kind of money domestically through the savings-starved American economy would dry up the credit available for commercial lending and put upward pressure on interest rates. It was Argentina's need for money to foot its fiscal deficit (along with a peg for its currency) that led to recession.

The third option is to raise the money from abroad. A significant amount of capital flowing into the US has come from the purchase of dollar-denominated US securities by Asian governments. The US must be hoping that continues, otherwise they might have to resort to the last option. The deficits run by the federal government in the 1980s were mostly financed by borrowing abroad. In the 1990s, when the deficits ceased, that borrowing from abroad was used to finance the current account deficit. The borrowing from abroad option increases the indebtedness of America. At present, the debt America owes abroad is $2 trillion, which is about 20 percent of GDP. At the current rate, this debt is likely to cross 65 percent of US GDP by 2010. According to Clyde Prestowitz, author and president of the Economic Strategy Institute, at interest rates of 3 percent it would take $200 billion annually to finance this debt. And guess where interest payments on foreign debt figure in the national income accounts - the current account.

This brings us to the last option - it's called the printing press. The Federal Reserve can in the worst case just get its printing presses rolling. There is nothing like that to get inflation going domestically. A brief visit to Latin America in the 1980s should reconfirm those fears. And more importantly, the dollar is king because of the trust the world has in the Fed. Who would trust the US if it printed dollars to foot its fiscal deficit? If this is resorted to, Saddam Hussein's original aim of undermining the dollar would have been achieved.

What would a weak dollar do?
A weak dollar might not be such a bad thing for many Americans. Exporters around the US would welcome a correction because it would make US goods cheaper and more competitive. But for many more Americans, a weak dollar means expensive imports. Throughout the 1990s, the manufacturing of many industrial and consumer products was exported to locations in Asia. And America imported toys, clothes, electronics and many other cheap things. A weak dollar would push these prices up and cause inflation domestically. Too much inflation, of course, is not liked by consumers and can in the long term could stunt economic growth in America.

In the rest of the world, especially in the export-oriented South and East Asian nations, a weak dollar would be a disaster. America consumes most of their products and a weak dollar would harm American imports. Already, these nations are running scared of China, which makes goods cheaper than they do. This has the potential of knocking off some of the growth these economies are expected to experience. The Chinese won't stay unaffected, but they have a potentially huge domestic market to cater to. Also, a weaker dollar may prompt many central banks around the world to diversify their reserves by buying more euros. That might well mean that European surpluses are exported not to the US (where they have gone in the 1990s) but to the rest of the world - giving the euro zone more influence in the wider world.

The most significant damage a weak dollar might do is to make it more expensive for America to carry out a unilateral demonstration of its technological and military prowess in the world. This might force America to play by the rules more often, and also think a lot more before embarking on adventures abroad. Iraq might be the last hurrah of the hawks for a few years, until the economy is fixed.

America is going to win this war in Iraq. The Americans are already busy doling out the post war reconstruction contracts. Politically, the war will bring about a bonanza - a favorable state in the heart of the Arab world (giving them leeway to cut the Saudis to size), a new reformed UN to do its bidding and oil - enough to send shivers down the spines of aspiring America baiters.

But economically the war might not be such a good thing. Americans might have to consume less from abroad, or sell more of their domestic assets to foreigners. They might have to rely increasingly on the capital-exporting nations of the world, such as Saudi Arabia and China, among others. And this in turn might make American power loom that much less large in the world.

Quelle (http://www.atimes.com/atimes/Middle_East/ED08Ak01.html)

syr :sss

11.04.2003, 21:25
The US Dollar Bear

By: Adam Hamilton

Since the mighty US dollar is the de facto global reserve currency, its trading behavior is exceedingly important for investors and speculators around the world to monitor.

In many ways the US dollar has become the central linchpin of the entire global economy, including both financial markets and international trade, so it is difficult if not impossible to overstate the importance of the dollar to the world financial system today.

While investors and speculators basing out of other countries are ever cognizant of the fluctuating tides of fortune driving the dollar’s value as a currency, we Americans all too often take the dollar for granted and totally ignore its trading behavior. Most Americans, having spent their whole lives in a dollar world, don’t even consider the potential impacts of dollar trading on the US markets and economy.

Yet, the dollar’s performance in the international currency markets has absolutely enormous implications for American and foreign investors and speculators alike. The dollar’s behavior has dramatic effects on the equity markets, bond markets, interest rates, commodities, and international trade in the United States.

The more that I ponder the dollar, the more that I realize how deeply it affects so many other critically important markets in the States and abroad. Every dollar-denominated financial market or asset on Earth today is both connected with and vulnerable to the fate of the US dollar in the international currency markets. As such, all investors and speculators need to stay abreast of dominant dollar trading trends.

While the US dollar spent all of the late 1990s, the bubble years in US equities, in a magnificent bull market, today the dollar languishes in a powerful primary bear market. As investors in US equities have been learning the hard way in the past few years, investment strategies that work smashingly well in a major bull market are suicidal in a bear market.

Why can I make the assertion that the US dollar is now in a primary bear market? Easy, the dollar’s recent technical behavior fits the classical definition of a bear market perfectly! If it walks like a bear, growls like a bear, and mauls like a bear, then it’s probably a…

A bear market is simply a persistent downtrend lasting longer than one year marked by a long series of lower interim highs and lower interim lows. Some folks also like to go a little farther, claiming that a 20%+ total loss over the same greater-than-one-year timeframe is also necessary for induction into the pantheon of formal bear markets.

While this 20% number seems a bit arbitrary in my opinion, there is no doubt that the one-year-or-more time component is crucial. Any financial-market trend lasting less than a year is probably merely an emotionally-driven speculators’ game. Until a dominant trend can flex its muscles unopposed for a year or more, it is dangerous to consider it something more than temporary. As an example, the powerful countertrend bear-market rallies in the NASDAQ typically flare up intensely for only 6-8 weeks or so, while the primary downtrend has run for 37 months straight!

The single most popular way to measure the dollar’s value in the world today is without a doubt the famous US Dollar Index. The US Dollar Index is a futures contract that trades on the New York Board of Trade. Futures and futures-options speculators around the globe relentlessly trade these US Dollar Index contracts to actively speculate on the US dollar.

The US Dollar Index is valuable not only because it is popular, but because it compares the US dollar to a basket of global currencies rather than just one. Today the index consists of a trade-weighted geometric average of six currencies. Currently the European euro dominates the index with 58% of the weight, the Japanese yen comes in second at 14%, the British pound 12%, and the Canadian dollar at 9%. The remainder is divided between the Swedish krona and the legendary Swiss franc.

These weightings change periodically, just as the components of major stock indices change over time, but the US Dollar Index remains a fantastic way to monitor the US dollar’s performance as a whole in the global markets. I suspect that the Chinese yuan will eventually be included, especially if the massive emerging economic power of China is combined with the world’s first major gold-backed currency in decades. A golden yuan could rapidly dominate Pacific and Asian trade and would have to be included in the US Dollar Index.

With the US Dollar Index being volunteered as our chosen measuring rod, the new primary bear market in the US dollar is quite apparent. All the graphs below show the US Dollar Index, and for the remainder of this essay I am going to use the terms “dollar” and “US Dollar Index” interchangeably.

Our first graph this week not only highlights the dollar’s bear, but shows a provocative comparison with the flagship US S&P 500 equity index. The behavior of the dollar in global currency markets intimately affects the performance of the S&P 500, one of many reasons why American investors and speculators need to pay very close attention to the dollar!


A dollar primary bear market? Charts don’t lie! The dollar topped in early July 2001 around a dollar-index level of 121 before it began plummeting sharply. The dollar soon regained its composure and started marching higher again after 9/11, ultimately climbing to 120 by January 2002, a slightly lower high. These two highs together formed a massive technical double top, which is shaded in blue on the graph above.

Fast-forward to March 2003, mere days before Washington’s annexation of Iraq was scheduled to commence. The dollar closed below 98, a level not witnessed in over three years. The dollar has carved an unmistakable downtrend for 21 months now since its top, well over the classic greater-than-one-year bear-market-induction criterion.

Since currencies, especially globally important ones, tend to move at the blinding speed of cold molasses, the dollar’s steep downtrend since its secondary top is particularly ominous. This blisteringly fast fall in the dollar is readily apparent above. Provocatively, the recent war rally in the dollar on the US invasion of Iraq only managed to carry it back up to its top resistance line of this sharp downtrend channel, and no farther. Since the dollar’s rally failed at this major technical level, odds are the dollar’s war rally is already over.

From its ultimate top to its latest pre-war interim low, the dollar has already fallen over 19% on a closing basis. I realize this isn’t quite the magical 20% number some technicians like to see in order to declare a primary bear market, but it is close enough for me. If you are keeping score at home, we need to see a US Dollar Index close under 96.7 to officially hit the 20% hurdle. If the steep downtrend above holds, this pivotal psychological event won’t tarry too far into the future.

A 19% dollar decline over 21 months? It’s hard to deny that this is definitely primary bear-market material!

In addition to the dollar’s unambiguous bear-market downtrend, the dollar’s high correlation with the US equity markets is very interesting. In the graph above, especially during the last few major S&P 500 bear rallies and subsequent downlegs, the dollar tended to move in lockstep with the equity markets. Major dollar interim tops occurred near the major interim bear-rally tops in equities, and major dollar interim lows closely coincided with major interim V-bounce lows in stocks.

Intuitively this high correlation makes sense. When foreign investors seek to deploy their surplus capital in the States as an investment, the primary destination of this capital is the US stock and bond markets. When stocks are going up and everyone is happy, demand for dollars increases as foreign investors sell their local currencies to buy dollars to use to buy US stocks. Increased dollar demand drives up the international price of the US dollar.

Naturally this relationship holds in bear-market environments too. As foreign investors already invested in the US equity markets watch the US stock indices plunge, they rapidly grow nervous. Not only do they face the equity loss that we Americans face, but foreign investors have to add a currency translation loss on top of that too! So, as the stock markets fall foreign investors want out so they sell their US stocks for dollars and then sell these dollars to buy back into their own local currencies. Increased dollar supply drives down the international price of the US dollar.

So ultimately the endless psychological ebb and flow in short-term equity trading helps drive global demand for US dollars. While I suspect that the stock-index behavior dominates this relationship, the dollar adds feedback into the loop too. A perfect example of this phenomenon is unfolding right now.

If you examine the lower-right corner of this chart, you will note a sharp slide in the dollar since the latest interim equity-market top in late November. Between the November equity top and the March 21st war-rally interim top, the S&P 500 lost 4.6%, the modest total pain that American investors have felt in this major S&P 500 downleg so far.

The US dollar also fell 4.5% between these same interim tops. While American investors are down 4.6%, foreign investors are down 9%+ when their currency losses are added to their US equity losses! A 9% loss in foreign-currency terms in the S&P 500 from interim top to interim top over only 15 weeks or so is pretty hefty. Foreign investors fully understand this and some will no doubt decide that enough is enough and sell their US stocks, putting farther downside pressure on the US equity indices.

While subtle, it is also provocative to note how the dollar led the final V-bounce stage of the last two major S&P 500 downlegs in the chart. Like our current S&P 500 downleg today, the dollar began to fall sharply while the downslope of the early equity downlegs still remained moderate. The dollar seemed to lead the waterfall plunges leading to the characteristic equity V-bounces, as if foreign sales of US equities reinforced a downward spiral in stocks leading to ever more foreign and US selling.

The same thing is happening today, which is another reason why I still think another brutal S&P 500 waterfall decline is rapidly approaching. While the downslope of US equities has been moderate thus far in this early downleg, the US dollar has already fallen sharply which may once again prove to be a harbinger of much more general selling approaching in the near future. As the war rally euphoria continues to fade, the probabilities for a rapid decline in both the dollar and US equities continue to increase daily.

The foreign capital that the American markets so desperately need to attract is not foolish and does not like being squeezed by both falling US stocks and a falling dollar. These rapidly compounding losses are almost certainly going to lead to increased selling of US stocks and dollars by foreign investors seeking to flee the ongoing US financial carnage.

With US stock markets so heavily dependent on foreign capital flows, American investors and speculators need to carefully watch dollar trading and monitor the unfolding primary dollar bear!

In addition to intimately affecting capital flows into the major US equity indices, the international dollar price is also very important to the US bond markets. Our next graph shows the US Dollar Index graphed with real interest rates, highlighting the powerful correlation between the dollar and returns in the bond world.


This comparison between interest rates after inflation and the dollar price is quite provocative as well! The strong correlation zones between real interest rates and the dollar are shaded in blue above. When real rates were healthy in 2000 before the foolish Greenspan Gambit attempted to bail-out stock speculators and reignite the doomed NASDAQ bubble, the dollar was in a strong primary bull market.

As the Fed began to viciously slash the rates of return that both American and foreign investors could earn in short-term Treasuries, the US dollar topped as supply and demand matched reasonably well. For over a year there was a time of indecision as investors were on the edge of their seats waiting to see if the Fed would really drive real rates negative to their lowest levels since 1980. Sadly following right in Japan’s footsteps, the US Fed pulled the trigger and carried out its mortal threat to short-term bond investors.

As soon as real rates of return after inflation began to plunge due to active Fed manipulation of short-term interest rates, the US dollar decline accelerated dramatically. Now any foreign (or American) investor will actually lose 2% of their purchasing power each year by merely holding 1-year US Treasury Bills, a sorry state of affairs. Naturally the global demand for the dollar is dropping as foreign investors flee from this predatory inflationary stealth tax on savers.

Just as the declining equity markets are accelerating the dollar’s slide, so are declining real returns in the US bond markets. Foreign investors are less willing to hold US bonds and finance the incredible debt binge in the States if they are going to lose real purchasing power because of inflation. As some of them start to sell and repatriate their capital back into their local currencies, the dollar decline will accelerate leading to even larger losses for the remaining foreign holders of US bonds. As they start to sell in ever greater numbers, the implications for today’s red-hot bond market are profound.

Watching the dollar’s trading and dominant trend is very important for American bond investors and speculators because any widespread foreign selling will crush the prices of bonds and lead to rising longer-term interest rates, which could spawn a vicious cycle leading to a catastrophic bond bloodbath.

As these comparisons between the dollar and both stocks and bonds illustrate, a falling dollar is bad news for all US intangible financial assets. The falling dollar leads to greater total losses for foreign investors which causes them to sell, driving down the dollar farther. This in turn magnifies the total losses for the remaining foreign investors in US financial markets and begets even more selling. Welcome to the dollar bear market!

While a falling dollar hurts intangible paper assets, hard assets like gold soar in primary dollar bear markets. As our final graph illustrates, each major downleg in the US dollar helped accelerate a major upleg in gold. While most US investors have suffered tremendously in the past few years, gold investors are blessed to be growing rich riding the new bull market in the Ancient Metal of Kings.


While the dollar is bumping its upper resistance line after its fleeting war-euphoria rally, gold is trading right in its secondary support zone. For over a year now gold has tended to charge higher after spending some time near this support, a very bullish omen for gold investors in the months to come. While US stocks and bonds will suffer with the dollar bear, gold will be the primary beneficiary of dollar weakness and its bull market will continue to dazzle.

So far in gold’s bull market to date the best way for investors to play it has been in quality unhedged gold stocks. Gold stocks have shown spectacular leverage to gold on the order of 5-to-1 since the US dollar topping process began. This means that, in general, for every 10% gain in the price of gold, unhedged gold stocks have managed 50% gains over time. I fully expect this awesome strategic leverage to gold to persist as the dollar bear continues helping to catapult gold prices higher.

If you are interested in knowing into which elite unhedged gold stocks my partners and I just recently redeployed our own capital for the next dollar downleg/gold upleg, please consider subscribing to our acclaimed Zeal Intelligence newsletter for full details. It is still a great time to buy these gold stocks before the war rally euphoria fades and the primary opposing trends of the dollar and gold reassert themselves with a vengeance.

Interestingly, major dollar bull and bear markets in history tend to run for 5-7 years or so. The last major US Dollar Index low occurred in mid-1995 in the low 80s. It ran for six years until mid-2001. Our current primary dollar bear today is also likely to follow this historical currency rhythm, running for 5-7 years after it started in mid-2001. This gives us a conservative dollar-bear-market ending timeframe around 2007 or so, quite a ways into the future from here!

As a mere mortal who cannot see the future I certainly have no idea if today’s dollar bear will really last this long or how low it will go, but I strongly suspect that this dollar bear has quite a ways to run yet. If it behaves like past dollar bears, it will probably plunge about 40% in total to a US Dollar Index level around 72-73 before it fully runs its course.

The overall implications of a primary dollar bear for the US financial markets are staggering. Without an enormous influx of foreign capital into the US each year, Americans will actually have to start saving for themselves rather than paying foreigners to do it for them. Total demand for both US stocks and bonds will decline, extending the Great Bear market in stocks and spawning another bear market sooner or later in bonds.

In such a surreal and dangerous environment, there are not many safe destinations for capital left. Folks buying the major US equity indices today when the S&P 500 is still trading above 22x earnings and only yielding 1.85% after a major bubble burst are falling prey to madness and will ultimately pay a heavy price for their lack of discretion.

At the same time placing long-term core capital into the bond markets with interest rates at anomalous and unsustainable 45-year lows is foolish as well. I recently saw a news item detailing a survey where 70% of American bond investors had no idea that rising interest rates could cause them catastrophic losses of principal as their bond portfolio is gutted. Unreal!

When a primary dollar bear is combined with a brutal equity Great Bear and a coming bond bear once interest rates inevitably respond to the Fed’s massive monetary inflation, for my money the best place to park long-term capital today is in physical gold and quality unhedged gold stocks.

Since all financial markets are cyclical, the time to sell gold and buy undervalued stocks and bonds once again will come someday, but for now the dollar bear is the dominant force exerting immense selling pressure on US financial assets. Only gold will continue to shine in such a difficult environment!

Adam Hamilton, CPA
April 11, 2003

Quelle (http://news.goldseek.com/Zealllc/1050082911.php)


22.04.2003, 11:45
Saville-Update, Ziel Parität CHF/$...........

The Dollar Bear and the Money Supply

Steve Saville
21 April, 2003

The Long-Term Dollar Bear

A point we've made a few times in the past is that bear markets in the US$ tend not to end until after the US current account has moved into surplus. In other words, once a US$ bear market is set in motion it will continue until the quarterly current account deficit has been eliminated. The latest bear market in the US$ has been underway for about 2.5 years. And, since the current account deficit is still hitting all-time highs almost every quarter there is a very high probability that this bear market is still in its infancy.

We can get some sense of where we are in the dollar's current bear market by looking at a long-term chart of the US$ relative to the Swiss Franc (SF). The below chart not only illustrates the SF's long-term uptrend relative to the US$ (the trend is defined by the upward-sloping channel), it also shows how the US$/SF exchange rate experiences multi-year bull and bear markets within the overall confines of the long-term channel. In fact, the oscillations between the long-term channel top and the channel bottom have been remarkably consistent in that each of the two SF bear markets (US$ bull markets) that occurred since 1971 lasted 6 years while each of the two SF bull markets (US$ bear markets) lasted 8-10 years. If this pattern continues then the US$ is presently 2.5 years into a bear market that will last a total of at least 8 years. Given that the US current account deficit has not yet even begun its corrective process, a further 5-6 years of bear market action in the US$ does not seem unreasonable.


Based on the historical pattern, the SF will reach its long-term channel top some time in the 2008-2010 period. And in order for it do so it will need to appreciate by about 50% from its current level over the next 5-7 years.

The Money Supply and War

As far as the financial establishment is concerned it is not just desirable that the total supply of money always expand, it is an absolute necessity. In fact, the current monetary system cannot continue to function unless the supply of money continues to grow. This is because almost all money is borrowed into existence, that is, it is created out of thin air when loans are made. A consequence of this is that every new dollar (or euro or yen or peso) brings with it a liability in excess of one dollar due to the obligation to pay interest. This, in turn, means that there is never enough money in existence to pay off all current debts. So, the total supply of money must continue to grow at a fast enough pace to enable the majority of borrowers to get their hands on enough money to at least pay the interest on their debts. If the money supply contracted for more than a brief period of time the system would collapse.

Below is a chart showing, in red, the year-over-year change in the total supply of US dollars (M3). While the M3 growth rate is still reasonably healthy by historical standards, it has plunged over the past 15 months. Furthermore, if the trend in money supply growth illustrated on this chart continues for another year then the money supply will start to contract (the US will experience genuine deflation).


The US Government and its central bank can be expected to do everything in their power to prevent the current trend from persisting. As explained above, they have no choice in the matter if they want the current monetary system to survive for a while longer.

Over the past two hundred years there have been three major strategies regularly used by governments, including the US Government, to reverse downward trends in money supply growth. These are a) increase spending on public works; b) cut taxes; c) go to war. Over the past 10 years the Japanese Government has concentrated totally on strategy a), whereas over the past 2 years the US Government has already tried strategies a), b), and, it could be argued, c).

Some people have recently hypothesised that the US' invasion of Iraq was not the result of genuine security concerns, but rather the result of a plan to prevent oil from being traded in euros. However, if you really believe there must be an ulterior motive for the war the above chart provides a far more plausible one than the recently discussed oil-euro-dollar link.

The war against Iraq may or may not be the result of genuine security concerns on the part of Bush and Blair, but either way it is not coincidental that wars often happen after the money supply growth rate has dropped to levels that are considered to be dangerously low. It seems that opportunities to go to war are 'jumped at' when the money supply growth rate is low whereas peaceful solutions will tend to be more vigorously sought during those periods when credit is expanding at 'healthy' clip.

Steve Saville
Hong Kong
21 April, 2003

Quelle (http://www.321gold.com/editorials/saville/saville042103.html)


30.04.2003, 08:53

Wednesday, April 30, 2003

Dollar or Dinar?

by William L. Anderson


In the election of 2000, John Ashcroft managed to lose his Missouri seat in the U.S. Senate by losing to a dead man. However, in the last few weeks, we have seen the U.S. dollar do one better, as it has lost ground to what was supposed to be a dead currency, the Iraqi dinar, better known as the Saddam dinar, which portrayed the face of the allegedly-deceased Iraqi president. In both cases, the loser was thought to be invulnerable only to be bitten by reality.

When the first wave of hostilities ceased in Iraq (we shall see if a second wave appears later as Iraqis tire of the U.S. occupation), U.S. authorities made sure that dollars—lots of dollars—followed in the wake of the armed forces. The plan seemed to make sense; with the government of Iraq imploding, it was believed that the dinar would disappear with it, to be replaced by dollars, and at first glance that is what looked to be happening.

As the Wall Street Journal tells its readers, when U.S. forces entered Baghdad April 9, the dinar traded at about 4,000 to a dollar. Whenever U.S. personnel paid for anything in Iraq, it was in dollars, not dinars. However, the dollar's apparent rise has gone south, as the Saddam dinar two weeks later traded at 1,800 to the dollar. To put it another way, the dollar lost more than half of its value to what surely has to be one of the weakest currencies in the world. The dinar, like the regime that printed it, was supposed to fade into history. Instead, it roared back to the point that it was even preferred, on the margin, to the mighty dollar.

With Saddam's picture all over the dinar, the U.S. looked upon this turn of events as something of a humiliation. For all the U.S. government's weaponry, all its tactics and bombs, its ability to overthrow governments and install new ones, and seemingly direct the course of history through sheer firepower, there is one thing that the U.S. was not able to do: abolish the operation of the economic laws of supply and demand. The central bank having been bombed, the supply of dinars was limited and fixed, even as dollars flooded into the country. That led to the stunning result that the dinar grew in value as the dollar fell, and all the firepower in the world couldn't stop it, at least it has not yet.


To suspicious minds, at least one of the reasons for the hostilities in Iraq was the fact that the U.S. dollar has become a second-fiddle currency to the Euro, at least when it comes to oil-producing countries accepting payment for petroleum. A stronger U.S. military presence in the Middle East supposedly would put a stop to that nonsense. But unlike the mid-and-late 1980s and 1990s, when the dollar was the de facto world currency, the dollar seems to have run out of steam.

American authorities, not surprisingly, have tried to put the best spin on this turn of events. Iraqis are patriotic, we hear, tending to gravitate toward national pride. Perhaps so, but it would seem that the reasons are deeper and more complex than just Iraqi patriotism. After all, if Iraqis truly believed that the dollar was the better deal for them, they would be more likely to swallow hard and accept the greenback. Devotion to a dead tyrant does not seem to be reason enough for people to risk their life savings.

The dinar rose because it still worked to facilitate exchange, and, without a central bank, it was suddenly protected from inflationary pressures. The dollar, meanwhile, was circulating in ever growing quantities, and the Federal Reserve always stands ready to print more.

And there's a larger issue too: the dollar's decline in Iraq is a microcosm of a larger but more troubling issue, one that the White House and the Federal Reserve System cannot spin away with its political happy talk or pretend does not exist. Both the U.S. economy and the dollar are in trouble, and their difficulties are intertwined with each other.

During the early 1980s, the U.S. economy was in its worst downturn since the end of World War II, yet the dollar was strong relative to other world currencies, many of which were mired in an inflationary morass, a holdover from the creepy decade of the 1970s. Although the U.S. Government had begun to incur massive budget deficits, the dollar was still the favored world paper, as producers of oil and manufactured goods overseas were more than willing to take dollars as payment.

In return, dollars flowed back here to purchase U.S. securities to finance the deficits, build manufacturing plants, and Japanese investors even went on a real-estate buying binge in this country, purchasing landmarks such as the Rockefeller Center in New York City. Even though the bottom dropped out of the real estate market in the early 1990s, foreigners holding U.S. dollars still had not had enough as money found its way into the stock market boom.

As we so well know, the party is over, and it has been over for a long time, except that few people here want to believe it, especially those who hold political power, at least for now. The dollar has been taking a beating for some time on overseas markets, and seen in that context, it is not surprising that Iraqis are making the same decisions that so many others have already made: dump your dollars.

It would be nice to say that this is a temporary problem, but the facts speak otherwise. For one, the U.S.A. is not such a great place to invest. Sure, there are the U.S. securities to finance what is going to be another round of massive budget deficits, although one wonders if there are enough people out there willing and able to purchase at least $400–$500 billion of U.S. paper each year. After all, the Japanese "economic miracle" ended more than a decade ago and oil-producing states like Saudi Arabia have seen oil prices fall by more than 50 percent in real terms since the heady days of OPEC in the late 1970s and early 1980s.

Moreover, the prospect of profitable investing in something like manufacturing here is at its lowest point in many decades. Savvy investors from overseas take note of things like the tobacco "settlements," and the asbestos quagmire that has bankrupted numerous firms and seemingly has a healthier appetite than a Great White Shark. From environmental regulations to the rigged civil court system, investors understand that the litigation explosion here presents a risk they would rather not undertake. Furthermore, we have seen assault after assault of governments at all levels upon private property rights, and no one wants to be played for a sucker if such actions are avoidable.

That is why places like China—a supposed "communist" country—have become hot property for investors. For all of its ideology, at least investors believe the Chinese Government will be more likely to protect their property rights than the U.S. Government. This is nothing less than a searing indictment against the legal climate in this country, and nothing currently demonstrates that change for the better is coming.

Ultimately, these things are—for lack of a better term—capitalized in the currency. Once upon a time, people overseas would have swallowed hard and bought dollars. Today, there is competition from the Euro, which goes in hand with the sad fact that the United States through thousands of self-inflicted wounds is losing its economic edge. The seller may be running out of suckers.

William Anderson, an adjunct scholar of the Mises Institute, teaches economics at Frostburg State University.

Quelle (http://www.mises.org/fullstory.asp?control=1217)


05.05.2003, 18:46

06.05.2003, 19:03
Hmmm:confused: ? Ok, weiter geht's :lach!

The dollar is on borrowed time

Expect a crisis of confidence when reality finally sinks in. It's the reason I think the place to be is in currencies that have lasted 5,000 years, can't be forged or rendered valueless by inflation: gold and silver.

By Bill Fleckenstein

I’d like to share a speech I gave April 26, called "Precious-Metallic Armor for the Coming Crisis of Confidence," at the Las Vegas Precious-Metals Conference. This crisis I see is incubating thanks to a constellation of factors now gathering force. We face a weakening dollar and, more importantly, a sea change in attitudes, as folks finally realize that our problems stem from the 1990s stock market mania and that there really is no magic Fed wand to get us out of them. When confidence shatters, stocks will sink -- and precious metals will soar.

Here’s the speech:

I have been in the money management business since 1982. I decided to set up a short-only fund in 1996 because I thought that things were headed in a very bad direction, though my timing was a little on the early side. My goal was to distance myself from the "speculative performance derby" and greed that was building, so that one day I could return to the long side of the business with my credibility intact, which I still plan to do when I feel it's safe to be bullish on stocks. For those of you who care, I will start a mutual fund that will be open to everyone.

I thought I might state my prejudices at the outset. I believe that the mania for stocks and the revulsion against precious metals that we saw in the late 1990s were opposite manifestations of the same psychology. I believe that, while that psychology has been dented, later this year it will be shattered, and stocks will sink as precious metals soar.

I believe that the stock market averages are headed much lower. I believe a dollar crisis lies in our future. I believe that the move that we will see for silver will dramatically outpace gold to the upside, though I own both, and I am a director of and own a sizable position in Pan American Silver (PAAS, news, msgs) and one gold stock. However, I do not believe that a so-called plunge protection team actively manipulates the stock market (for the government) And I do not believe that gold is actively manipulated, as is suggested by many gold bulls.

Lastly, and most important, I believe that, in a social democracy with a fiat currency (like ours), all roads ultimately lead to inflation. And in fact, that is the story of all paper currency regimes. They all collapse.

The biggest bubble in the history of the world that we recently experienced was powered by the most incompetent and irresponsible Fed in history, along with the public's willingness to suspend disbelief. It was a state of mind as much as anything else. Folks believed in the existence of a "new era," in a Greenspan put, and in retiring early, and rich.

Techs as great investments? Hardly

Folks believed that the wonders of technology automatically meant that tech stocks were great investments. They even thought that two small pieces of paper were more valuable than one larger piece of paper, as they believed that stock splits meant stocks should go up -- though I don't suppose they expected to pay more for a pizza that was cut into eight slices than just four. In short, it was all about confidence and, ultimately, near-arrogance on the part of those involved.

In a period when an Internet "incubator" (whatever the hell that is) like Internet Capital Group (ICGE, news, msgs) could be valued at over $40 billion -- more valuable at the time than, say, Boeing (BA, news, msgs) -- and sported a valuation of approximately 150% of all the world's gold companies combined, is it any wonder that no one thought they needed to own gold?

Paper reigned supreme, as people were bursting with confidence. At the peak, Cisco (CSCO, news, msgs) claimed a valuation of over $500 billion. I saved a description from February 2000 by an analyst who followed Cisco and thought that within 18 months, it would be valued at a trillion dollars, never mind that its revenues were on track to be about $25 billion or $30 billion. Here was a company doing, in essence, about one-quarter of 1% of GDP that was deemed soon to be worth 10% of GDP. Those are just a couple of examples of hundreds that I could pick to illuminate the overconfidence of the public at that time.

I believe that, as much as the mania for stocks was an expression of confidence in paper, the metals are just the opposite. They are an expression of a lack of confidence. I believe that given the pendulum's extreme swing to the side of confidence, it is now destined to travel back quite a ways in the other direction.

Inflation is how government cheats us

We all know that the government will cheat us over time, via inflation. We just don't know at what rate. While lots of intelligent people believe that deflation is right around the corner, this is not my belief (nor has it ever been). I believe that people have come to confuse declining asset markets with "deflation." Deflation, to me, means that the value of the dollar appreciates against a basket of goods and services.

A recession, coupled with a declining stock market and declining house prices, would be just typical consequences of what happens after a boom, much less the biggest speculative mania in history. I do not consider that to be deflation. So, I believe it's entirely consistent to expect a declining stock market and declining housing prices in the wake of a bubble, and higher inflation. That does not mean that inflation rates have to run at a high level initially. But over time, higher rates of inflation are what we should expect.

I believe we experienced deflation in the 1930s because we were still on the gold exchange standard, which was fairly rigorous, certainly compared to the confetti standard that we're on right now. As far as people asking, "What about Japan?", I don't believe Japan is a true social democracy. It may be moving in that direction, but when politicians there seek re-election, they don't tend to act in quite the same way as ours do.

The Depression still throws a long shadow

And, I believe that the mindset existing in America is to never relive the Thirties again. I think that explains the statements we've seen from the central bank, in terms of Fed Governor Ben Bernanke talking about using the printing press to fight deflation, and FOMC secretary Vince Reinhart talking about buying Treasurys if asset markets don't respond in a way that the Fed likes. The Fed has basically said it will not accept "no inflation," and given its outstandingly consistent record of destroying the value of the currency over time, who wants to argue with it about that? However dangerous you may think the Fed has been historically, the Greenspan Fed takes that to an entirely different dimension.

Here, it might be useful to take a moment and review the history of the dollar. What I have prepared is a chart of the purchasing power of the dollar through something that we can all appreciate. I created it from data that the Hershey (HSY, news, msgs) company gave me, after I asked them what a Hershey bar has cost at retail since its introduction in 1908.

You have obviously noticed that, from time to time, the price goes up and the amount of chocolate per bar changes. So what I have done is to take the price and turned it into the price of chocolate per ounce of a Hershey bar. What you can see here is that, surprise, surprise, the price of chocolate per ounce of a Hershey bar has risen over that period, and in fact is up about twelve-fold. Measured thusly, the dollar has lost 92% of its purchasing power.

Source: Hershey Foods

Interestingly enough, however, the value of Hershey stock, since it came public in 1927, is up about 295-fold, with one share purchased at $39.58 now worth 180 shares at roughly $65 each. Even after adjusting for inflation, as I have calculated it, that's still a gain of 14 to 15 times in after-inflation terms. Obviously, Hershey has been one of the rare, huge winners.

In the mania, all stocks were expected to eventually do as well "over time," as people were blinded by long-term returns of stocks like Hershey's -- though they were more interested in stocks like chocolate.com -- and completely oblivious to the risks. But folks were also completely oblivious to the No. 1 financial risk that we all face as investors/citizens, and that is inflation. In that regard, I consider the Fed to be Public Enemy No. 1.

The housing bubble: Consumers dig deeper holes

Not only did guys like Greenspan, McDonough and McTeer help the Fed power the mania by making up new-era rationalizations for it, since the market peaked in March 2000, they have fomented another bubble, this one in housing prices. This has enabled consumers to continue to live beyond their means, thereby making the ultimate adjustment more protracted. Rather than taking the bubble as a warning sign and urging folks get their financial house in order, the Fed has given folks the shovel, via the housing bubble, to dig themselves deeper and deeper in the hole.

It's sort of like lending money to somebody who had a margin call, rather than making him meet the margin call, and then lowering margin requirements as well, so he can buy more. That is, in essence, what has occurred in the housing market, as many people have increased their mortgages as housing prices have gone up.

Further, we have put ourselves in a position of being completely at the mercy of foreigners. Thanks to our trade deficit, we are dependent on foreigners to be willing to accumulate an additional $1.5 billion every single day, just to keep the dollar where it is.

The era of denial

This period that we have experienced since the market peak has really been a period about denial, and it's gone on longer than I would have guessed possible. But it is what it is. Initially, folks were in denial about the fact that stocks had peaked and that we were in a bear market. Then, all of our economic and stock-market problems were blindly pinned on the attacks of Sept. 11, even though that wasn't the market or the economy's problem. And now, all the problems of the last six months have been pinned on Iraq.

Thus far, Greenspan and the Fed have basically been issued a pass after going 0-for-12 on the rate-cut front. Folks still have faith in the Fed, I believe, because the housing bubble has kept the consumer feeling more or less OK, even as people lose their jobs or know someone close to them who has lost his job.

However, I believe that later this year, people will finally be forced to realize that our problems are a result of the mania, and are long-lived. That psychological readjustment will come about when the economy and the stock market don't come back (excluding some minor postwar relief bounce).

Along with that realization, folks will start to contemplate what happened in the 1930s, even though things are different now, especially in terms of our currency regime. They will contemplate what's gone on in Tokyo for the last 12 years, where now 60% of the stocks on the Tokyo Stock Exchange sell below book value, contrasted to the three times book value that stocks sell for here.

The Fed has become powerless:D

I think that at some point, the exact moment being unknowable, folks will recognize that the Fed has ruined the financial system, the Fed is powerless to stop the bear market, and the Fed is powerless to fix an economic bust precipitated by the misallocation of capital that occurred in the mania.

That realization, I believe, will cause folks to lose confidence, and that loss of confidence will set off an avalanche in stock prices, forcing them to be valued as the fractional shares of businesses that they are, instead of the conceptual fantasy lottery tickets that they have become. I believe that this loss of confidence, both here and worldwide, will also cause the dollar to be reappraised as the piece of confetti that it has become.

Now, I don't say any of this because I want it to happen. I say this because to me, it was preordained by the policies that precipitated the bubble and the policies that have gone on since the bubble. I don't root for any of this to occur, but I fear it will occur. My choice is to be prepared, and to do the best I can in that environment.

Gold looks good because currencies don’t

Unfortunately, when it comes to looking at other currencies, the euro and the yen are not a whole lot better than the dollar. I sort of view each of them versus the dollar as a one-eyed man in the land of the blind. Not too interesting, just slightly better alternatives. However, all of this is very bullish for the only currency that has been in existence for 5,000 years, that cannot be printed, and is no one else's liability – i.e. gold. I would like to be clear that when I say gold, I also mean silver in the same breath, as I stated at the outset. Just as buying stocks until your hands bled was a state of mind of supreme confidence in the mania, owning precious metals is, to repeat, the expression of the lack of confidence in the monetary authorities, an oxymoron if there ever was one.

I believe that investor demand, the lack of which has been responsible for holding back the metals, will finally manifest itself as this year unfolds and the problems that I have articulated become clearer to people. Greenspan, in particular, has painted himself into a corner, at last, by blaming all of our current problems on "geopolitical uncertainties" surrounding the Iraq war. This is why I feel that we have a potential catalyst to cause people to re-evaluate their thinking. When the alleviation of those geopolitical concerns fails to ignite the economy and the stock market, the game will be up, and the race to protect oneself will be on.

I have no clue as to the precise timing of this scenario, since a lot depends on the length and potency of the relief rally in stocks and the economy. However, the relief rally in the dollar has been especially pitiful. Basically, the euro traded from $1.10 to $1.06 in three days, so we had a mild 5% correction, after a nearly 25% move in the euro. And of course, the euro is now back over $1.10. (Editor’s note: you can track the Euro here.)

This suggests to me that the dollar is on borrowed time, and trouble is coming, sooner rather than later. It also means to me that the price of gold has seen its lows. And, while the tsunami of investment demand that I envision may still be months away, I believe the surprises will now all be on the upside for gold.

I would just like to close by leaving you with one of my opening thoughts: In a social democracy with a fiat currency, all roads ultimately lead to inflation.

Bill Fleckenstein is the president of Fleckenstein Capital, which manages a hedge fund based in Seattle. He also writes a daily Market Rap column for TheStreet.com's RealMoney. At the time of publication, he owned shares of Newmont Mining and Pan American Silver. He’s also a director of Pan American Silver. His investment positions can change at any time.

Quelle (http://moneycentral.msn.com/content/p46779.asp)


19.05.2003, 23:08
Weil es gerade Tagesgespräch ist;).

US dollar plunges, tips deflation fears Europe's way

Mon May 19, 1:37 PM ET

WASHINGTON (AFP) - Nerves gripped investors worldwide after US Treasury Secretary John Snow appeared tacitly to abandon an eight-year policy of supporting a strong dollar.

The perceived shift raised fears that further dollar declines would erode the value of foreigners' US investments, economists said.

And while soothing concerns of deflation in the United States, it also ramped up those same fears in Europe, and complicated the long deflation battle in Japan, they said.

"What the United States has made clear is that they are not going to undertake any efforts to try to defend the currency," said Citigroup global currency strategist Robert Sinche.

"We think that is exactly appropriate in this environment," he said.

"In a world where the major concerns appear to be about deflation rather than inflation, the last thing the world economy needs is to have the United States trying to artificially tighten policy."

US Treasury Secretary John Snow described recent currency fluctuations as being "really fairly modest" during a weekend Group of Seven finance ministers in Deauville, France.

A "strong dollar" policy did not mean that the currency should be at any particular exchange rate, he said, emphasising that it incorporated other values such as confidence, or being a good medium of exchange.

The euro rose to 1.1720 dollars in late morning deals in Europe, against 1.1581 on Friday in New York.

In Japan, already battling deflation for four years, the authorities in Tokyo intervened heavily to prevent a yen appreciation. The dollar tumbled to 115.13 yen from 115.90 on Friday.

"I think for the longest period of time in effect the dollar exchange rate has been market-determined," said Moody's Investors Service chief US economist John Lonski.

Chronic deficits in US financial dealings with the outside world -- shown by a current account shortfall of more than half a billion dollars last year -- might have caught up with the currency, Lonski said.

"We are simply not able to attract as much foreign capital as we need to prevent the dollar exchange rate from moving lower. I wonder how much of this is really the product of any change in policy," he said.

Major investors in dollar-denominated assets also might have decided to diversify because of heightened geopolitical concerns, Lonski said.

In addition, the US Federal Reserve had cut the key federal funds target rate to a four-decade low of 1.25 percent. Lower rates reduce the returns on US investments, eroding demand for dollars.

For now, the slide in the dollar worked in favor of the US economy, where underlying inflation fell to a 37-year low of 1.5 percent in April when compared with April 2002.

"One of the perfect antidotes for deflation is a weaker currency," Lonski said. But "in Europe, it has the opposite effect," he added.

The appreciation of the euro, and the higher risk of deflation, might force the European Central Bank to cut rates sooner, the analyst said.

"The attack against deflation becomes globalized if the ECB decides that it has no choice but to cut rates pretty soon." The ECB holds its next meeting June 5.

In Japan, the Bank of Japan had waged a long battle in vain against deflation. "The last thing they need is a further appreciation of their currency," Lonski said.

Snow would still step in to support the dollar if the decline ran out of control, leading to a flight of funds from both the equity market and the bond market, he predicted.

"Snow made it perfectly clear, the strong dollar policy has been abandoned up until we reach that point where expecations of further dollar weakness prove to be disruptive to US financial markets," Lonski said.

Wall Street tumbled Monday. The Dow Jones industrials average of 30 top stocks plunged 171.33 points or 1.97 percent to 8,507.64 by early afternoon. But the bond market held up relatively well, Lonski said.

"If both equity and credit markets deteriorate together, chances are the dollar depreication will no longer be tolerated by the US government," the economist said.

Quelle (http://story.news.yahoo.com/news?tmpl=story&u=/afp/20030519/ts_afp/us_economy_forex_030519173758)


20.05.2003, 07:52
Syr, längerfristig sieht das Bild übe aus für de Dollar .... allerdings "könnte" er gestern ein mittelfristiges Tief gemacht haben ....... gilt zu beobachten, denn ganz sicher ist es noch nicht!

C:R => 2:1 and improving! :cool:

20.05.2003, 09:03
Hoofie, bitte jeweils mit Begründung, ok? So bringt's keinem was :(...


20.05.2003, 09:22
Ackermann zu Snow und dem $$$$ :sss........


'Snow-Job' Won't Fool Gold

by Rick Ackerman

Monday’s forecasts straddled the fence in a manner that may not have been entirely helpful to some of you. All last week, activity related to the expiration of May options advertised the stock market’s weakness. Floor pros who were in a position to manipulate stocks with cheap, expiring puts and calls stayed relatively docile, seemingly lacking the confidence to effect short-squeeze rallies in numerous stocks that had appeared primed to fly. Friday’s turgid action reinforced this impression, and the tone of Monday’s Black Box was properly bearish to reflect it.

So why were nearly all of the specific price targets for Monday higher rather than lower? Simply because long-standing upside targets had not yet been reached. I gave the bull the benefit of the doubt as the week began because the upside target for one bellwether in particular, IBM, was just inches above last week’s high and therefore a decent bet to be achieved. As longtime subscribers will already know, the breach of a hidden pivot usually indicates that the underlying trend will continue until the next pivot is reached. But interpreting this dynamic can be subjective, at times hinging on how decisively a pivot has been penetrated. In retrospect, the minor rally cycle has shown little gumption relative to the upside targets we’ve been using.

Dollar Safety Net Gone

Now, unless stocks come roaring back within the next few days to meet those targets, my outlook for the next month or so will turn bearish. My earlier bullishness on stocks for the intermediate term was based in part on the assumption that the dollar index would find major support in the range 92.50 – 95.00. Odds still favor a bounce from within that range, since many months’ worth of consolidation/distribution have occurred there in the past. But it may be a feebler bounce than we’d initially expected, given the extremely negative press the dollar has been getting following a watershed speech over the weekend by Treasury Secretary Snow. Snow allowed that the U.S. is ready to abandon its verbal support for the dollar – to abandon, even, the pretense of supporting it.

The administration has spun this decision in a peculiar – make that, dumbfoundingly stupid -- way by suggesting that the dollar’s true strength is not reflected by its market value, but by the “confidence” which it inspires in the public. Oh, and also by its resistance to counterfeiting. Got that? The big question now is, does the administration truly believe that cheapening the dollar will help cure our trade deficit? For if competitive devaluations are really just a game of beggar-thy-neighbor, then we are a tad late in our attempts to undermine the exports of Germany, Japan, Canada and some of our other major trading partners. The respective economies of each country are teetering on their own -- most significantly Germany’s, whose deflationary tendencies could reach critical mass even before America’s. Another factor which will moot the trade-balance effect of a cheaper dollar is that China has pegged its currency to the dollar. In manufacturing, China is the global deflator, the 800-pound gorilla of exports, and unless it allows the yuan to float higher against the dollar – don’t hold your breath on that one – chances are slim of a significant pickup in U.S. exports or a big decline in the trade deficit.

Why Let the Dollar Fall?

Our guess is that Snow and his cohorts at the Federal Reserve understand that devaluing the dollar will not much stimulate U.S. exports in a global recession. So why are they permitting the dollar to fall? The answer is that they aren’t -- that they know the dollar is headed for a potentially catastrophic decline regardless of whether or not it is official policy. So, with their facile pronouncements, Treasury Secretary Snow et al. would have us believe that a weaker dollar is the economic outcome the U.S. desires. That kind of Snow-job may fly on CNBC, but nowhere else – most especially among foreigners who still hold huge dollar reserves in the form of U.S. Treasury paper and other dollar-denominated securities.

All of which leads us -- yet again -- to the inescapable conclusion that gold’s day in the sunshine is not too far off. We had expected bullion prices to take their good old time getting off the runway following the recent correction from $390 to $320. But this assessment may have been short-sighted and parochial to the extent it focused mainly on domestic factors of supply and demand. The theory was that so many gold-lovers got caught long at the $390 top that they would have little buying power to accumulate more of the stuff as prices collapsed. We further reasoned that lifting gold thereafter from the mire at $320 would require an infusion of capital from newly bullish investors who up to that point had skeptically avoided gold.

“Gold Dot-Com”?

We now think that much larger, bullish forces are at work, and that foreign capital that until now has flowed from dollars into euros will start to move less reluctantly toward gold assets in the coming months. That flow is almost certain to become a torrent at some point, although it’s anybody’s guess exactly when. In the meantime, the shift into euros as a dollar alternative may already have been dangerously overdone, since the D-mark surrogate is intrinsically, fundamentally and ultimately the same worthless air ball as the dollar. Moreover, to the extent a country’s economic prospects are a factor in determining the present and future value of its currency, demographic trends say the euro may be in even worse shape than the dollar once the global credit bust has run its course. For while the U.S. economy could conceivably make a fresh start, the welfarist eurostate would be bucking intractable problems of structural unemployment and non-competitiveness that could restrain growth for decades.

As such, the still-strong euro should be considered no more than a stop-gap investment – the place where the world has chosen to park its investable cash until the money can be re-directed into a far less liquid but ultimately more promising gold market. An analogy would be the homeowner who, fearful of a deflationary bust, sells his house and puts the money in T-bills or money market funds. Sooner or later, however, much of the world’s safety-seeking money is going to find its way into gold. At that point, as we have asserted here before, it will not matter in the least which gold stocks to own, for even the sorriest of them will soar like the high-falutin’ dregs of the late, great dot-com era. It could be argued that gold’s ascent will be even more spectacular than that of the dot-coms, since there was effectively no limit to the number of fly-by-night Internet companies that could be created to satisfy investor demand. The world’s supply of mining shares, on the other hand, is not only finite, it is smaller in dollar value than the shares of just one dot-com stock, Cisco Systems, during the communications hardware firm’s heyday.

Classical Fooler

Meanwhile, the nascent bull market in gold is looking more and more like a textbook classic :), since it is managing to fool bulls and bears alike – to fool us, at least, since we thought we’d have all the time in the world to pick up mining shares when the POG was touching bottom near $320 not long ago. Instead, bullion quotes crept quietly higher over the last six weeks, leaving those who were indecisive at $320 to wish they’d had more confidence. Now the opportunity to scoop up such bargains is gone, and the short-squeeze that will propel an ounce of gold past $400 is still yet to come. Next time gold’s price dips, we’ll know better.

Quelle (http://www.marketwise.com/MW_WiseG/BBF_Archive/20030519.htm)

syr :rolleyes:

22.05.2003, 14:24
to the point ;).......


Thursday, May 22, 2003

The Dollar and the Balance of Trade

By Frank Shostak

Since January 2002 the U.S. dollar has fallen by 25.6% against the Euro and 13.2% against the yen.


Most experts are of the view that the sharp fall in the dollar is the result of the fact that American imports of goods by far exceed exports of goods. In March the trade gap stood at $43.5 billion, not far from the record deficit of $44.9 billion in December of last year. As a percentage of GDP the annualized trade deficit stood at 4.7% in Q1 against 4.5% in the previous quarter.


But is it true that the state of the trade account is what is behind the fall in the exchange rate of the U.S. dollar? Every participant in a market economy is a seller and a buyer of goods and services. In his capacity as a seller of goods he exports those goods to other individuals. While in his capacity as a buyer of goods he imports these goods from other individuals.

In other words, every participant in a market economy is both an exporter and an importer. For instance, a baker that produces 10 loaves of bread and consumes two loaves can now sell, i.e., export eight saved loaves of bread to a shoemaker for a pair of shoes. The pair of shoes that the baker secures for the eight loaves of bread is his import. Observe that he paid for the import with his export, i.e. eight loaves of bread is payment for the pair of shoes.

The introduction of money does not alter the essence of what we have said, i.e. that individuals pay for their imports by means of exports. A producer exchanges the goods he produces for money and then employs money to secure, i.e. to import, goods from other producers.

As with the price of goods, the supply and demand for money determines the price of money, or its purchasing power. For a given supply of money an increase in the production of goods implies that producers would demand more money since more goods must now be exchanged for money. As a result of this, the exchange value or the purchasing power of money will increase. Every dollar will now command more goods. If the supply of money increases for a given stock of real goods, the purchasing power of money falls since now there are fewer goods per dollar. In short, the prices of goods at any point in time are the manifestation of a given state of supply and demand for money.

Does the calculation of the balance of payments alter our conclusion that the purchasing power of money is determined by the supply and demand for money? For the balance of payments to influence the purchasing power of money, one needs to show that it can alter the supply and demand for money. Can the balance of payments, which is the difference between the monetary value of what was sold versus the monetary value of what was bought, alter the supply of money?

Obviously not, since the supply of money is determined by central bank monetary policies. Likewise, the balance of trade cannot determine the given stock of goods. The balance of payments only records the value of given goods bought and sold by an individual or a group of individuals.

We can thus conclude that balances of payments within a country do not cause the purchasing power of money in that country.

Now, if a given basket of goods is exchanged in the U.S. for one dollar and the same basket of goods is exchanged for two euros in Europe, the rate of exchange between the U.S. dollar and the Euro will be set as one dollar for two Euros. If money supply increases in Europe and as a result three euros are now exchanged for the same basket of goods, the rate of exchange between the U.S. dollar and the euro will be set as one dollar for three euros. Any deviation of the exchange rate from the level dictated by the purchasing power of currencies will set corrective forces in motion.

To put it simply, if in the U.S. the price of 1kg of potatoes is one dollar and in Europe two euros, then according to the purchasing power framework the currency rate of exchange should be one dollar for two euros. Now suppose that the rate of exchange was set in the market at one dollar for three euros. In other words, the dollar is now overvalued. It will pay to sell potatoes for dollars then exchange dollars for euros and then buy potatoes with euros—thus making a clear arbitrage gain.

For example, individuals will sell 1kg of potatoes for one dollar, exchange the one dollar for three euros, and then exchange three euros for 1.5 kg of potatoes, gaining 0.5 kg of potatoes. The fact that holders of dollars will increase their demand for euros in order to profit from the arbitrage will make euros more expensive in terms of dollars and this in turn will push the exchange rate in the direction of one dollar to two euros.

According to Rothbard, "the exchange rate between any two monies will tend to be at the purchasing power parity. Any deviation from the parity will tend to eliminate itself and re-establish the parity rate."[1]

As with the balance of payments within a country, the balance of payments between countries does not cause the respective purchasing power of money and hence does not cause the currencies rate of exchange. Within a country when a baker imports shoes from a shoemaker he pays with the bread he produced. Things will not be different if an American baker has exchanged his produce with a Japanese shoemaker. Note that the respective import and export of goods doesn't alter the overall stock of goods. Hence for a given stock of money no change in the purchasing power of money emerges.

Let us assume that the rate of exchange between the U.S. dollar and the Yen is 1:1, i.e., one dollar for one yen, and it is also in line with the respective purchasing power parity of the U.S. and Japan. Now let us further assume that money is created out of "thin air" in the U.S. American importers employ the new money to buy Yen. In the process, the exchange rate of Yen against the dollar appreciates to $2:1Yen. With Yen, Americans now buy Japanese goods. The trade balance of the U.S. with Japan moves into deficit.

Observe that what we have here is an exchange of nothing for something. Americans exchange unbacked by production money for goods. Japanese would have difficulty to secure real goods from Americans for dollars they have received since these dollars are unbacked by production. This will be manifested by an increase in prices in the U.S. In short, by means of empty dollars Americans have diverted real Japanese savings.

Consequently, what we have here is a fall in U.S. money purchasing power, a fall in the U.S. dollar rate of exchange against the Yen and the U.S. trade deficit with Japan.

So while the trade balance doesn't cause the currency rate of exchange, it does provide an indication of the extent of monetary abuses by the central bank. In short, it provides an indication regarding the diversion of foreigners' real savings to the country that is engaged in reckless monetary policy.

Since the U.S. dollar is the most acceptable medium of exchange, the U.S. central bank's monetary policy is an important means in the diversion of foreigners' real savings. Can this diversion continue without consequences?

Now, within the framework of a fixed exchange rate excessive monetary pumping by a country's central bank will lead to a run on the currency of the country and put a halt to loose monetary policy. However, in the framework of a floating exchange rate system the adjustments in rates of exchange are smooth and it takes a long time before the crisis point emerges.

Moreover, if all central banks are coordinating their monetary policies, as is the case at present, the crisis can be averted for a long period of time. Only if central banks stop coordinating their policies can a currency plunge and an economic crisis emerge–following one central bank's having pushed its monetary pumping more aggressively. It remains to be seen whether the U.S. central bank has decided to go its own way and accelerate its monetary pumping relative to other central banks. If this is the case then the dollar could fall sharply and a possible financial crisis could emerge.

As a rough guide, looking at changes in the supply of money relative to its demand can do much to explain movements in the purchasing power of money and the exchange rate. A comparison of money supply growth versus the rate of growth of a country's economic activity gives the "excess money supply rate of growth". (An increase in economic activity implies more goods are produced and hence a greater demand for money).

The relative excess money supply rate of growth provides an important clue for the likely direction of a currency's rate of exchange. Thus, if over time the excess money supply rate of growth in the U.S. exceeds the excess money supply rate of growth in Europe, the U.S. dollar will depreciate against the Euro. The converse will happen if over time the excess money growth will fall in the U.S. versus Europe.

In this regard, the excess money growth of the EMU in relation to U.S., or the excess money growth differential between the EMU and the U.S., after falling to -4.3% year-on-year in September 2001 jumped to 5.5% in March this year. In short, Europeans print money at a faster pace now than Americans. Given the fact that the effect from changes in money supply operates with a lag, this means that the strong rebound in the excess money growth differential between the EMU and the U.S. raises the likelihood that in the months ahead the U.S. dollar should strengthen against the Euro.


After falling to 0% in February 2001, the excess money growth differential between Japan and the U.S. climbed to 27.6% by April last year. From then onward the excess money growth has been on a decline falling to 7.8% by March this year. Given the lag, we suggest that the effect from the acceleration in the differential between February 2001 and April 2002 is likely to assert itself in the months ahead. In short, the U.S. dollar is still likely to strengthen against the Yen before the effect of the falling differential between April 2002 and present asserts itself.


Contrary to popular thinking, it is the purchasing power parity, and not the state of the trade account, that sets the exchange rate between any two monies. The latest fall in the US$ is not so much a crisis of the US currency in response to the trade deficit as it is a crisis of the present floating exchange rate system, which permits unchecked loose monetary policies by central banks. These unchecked policies create the conditions for severe distortions.

In the floating exchange rate framework by means of monetary policies coordination, central banks can create the illusion of currency stability. But this approach can undermine real economies over a prolonged period of time. The longer the current floating exchange rate regime is allowed to function, the more damage is inflicted on wealth producers. The only way out of this mess is to seal off all loopholes to monetary pumping.


Frank Shostak is an adjunct scholar of the Mises Institute and a frequent contributor to Mises.org.

[1] Murray N. Rothbard. [1962] 1970. Man , Economy and State Nash Publishing. P. 726.

mises.org (http://mises.org/fullstory.asp?control=1233)

syr :D

23.05.2003, 08:08
Russian Rubel vs. US Dollar :p..........

The Dollar Will Continue Its Fall
The ruble is becoming stronger

05/22/2003 17:45

George Soros has recently placed the US dollar down at a near-all-time low. This action on the part of the world-known financier has made financial analysts talk something about which they have never talked before - a serious split in the American political and economic elite. Soros is basically known for his attack against the British pound sterling in 1992, which made the British currency stop being a world currency.

It seems not to be possible to overcome the crisis of the American economy. The Bush's administration is creating special conditions for companies that are closely connected with White House personalities. As a result, the financiers that support the US Democratic Party have been cast aside. This definitely exacerbates the pre-election opposition. The only opportunity for Democrats to make George W. Bush stumble and fall at the coming election is to aggravate the economic situation in the States and to make the dollar go down.

However, the US dollar has been a tool for saving money and deriving profit throughout the whole world. Therefore, the reduction of the American currency will ruin millions of people worldwide. This is especially dangerous for Russia, since the dollar became the major currency in Russia in 1991.

Russian financiers keep talking about the current situation with the US dollar: how to keep savings, how to obtain profit from the difference of the dollar and the euro. However, no one wants to say anything on what the strengthening of the ruble means for the country and for the people. It has already become evident that the Russian Federation-s Central Bank is not capable of struggling with the objective tendencies of the world financial market. The strengthening of the ruble is cutting into the profitability of Russian exports, and people are losing their dollar savings.

The declining dollar allows political problems to be solved in the USA and revives American exports. Therefore, one shall assume that the USA will not try to maintain its national currency. American military power is always capable of bringing the dollar back to its absolute status. That is why there is no point in the Central Bank struggling to preserve the current dollar rate against the ruble. Russian exports become less profitable, and Russian companies and the budget suffer losses, not to mention the population.

The Central Bank accumulates gold and currency reserves, which are placed abroad, working for the economy of the USA and EU states. However, record reserves make a very good trump card. In addition, a low dollar rate is very good for Russia from the point of view of foreign debt. President Putin pointed out in his address to the Federal Assembly that Russia's gold and forex reserves had increased by 5.5 times during the years of his presidency.

According to experts' estimates, the Russian Central Bank is repeating the mistakes of South East Asian national banks that caused the Asian crisis in 1998 (and the default in Russia as well). The RBC news agency reports that the official currency rate dropped from 31.38 to 31.10 rubles per dollar in April of the current year - by 0.9 percent that is. The strengthening of the real ruble rate against the dollar came to 2.2 percent (taking into account consumer prices in Russia and in the States). The ruble gained 7.6 percent against the dollar during the first four months of 2003.

The Central Bank is continuing its policy of revaluating the ruble against the US dollar. There is too much foreign currency in Russia, and it is not working. For the time being, the Russian Finance Ministry does not see anything frightening about the strengthening of the Russian currency. Ministerial officials say that the economic situation allegedly allows gradually adapting to the strengthening of the ruble. However, the inflation rate is about to get out of control. Deputy Finance Minister Aleksey Ulyukayev believes that everything will be just fine if the ruble-s growth against the dollar does not exceed a level of 10 percent. This official mentioned a six or eight percent level before, though.

The Russky Focus news agency believes that if the growth of the real ruble rate achieves the level that was mentioned by Aleksey Ylyukayev, the cost of the American currency will return to the pre-crisis situation by the year 2005 - six rubles per one dollar.

In the meantime, the whole world keeps buying European, Canadian, Asian currencies - any other currencies but the USD. Deutsche Bank, the largest European bank on the forex market, has already recommended that its clients get rid of the dollar and invest in the euro. Bank analysts say that the euro rate vs. the dollar rate will go up to $1.20 per one euro as early as September. The Bank also predicted that the dollar rate would drop down to $1.40 per one euro within two years.

On the other hand, the fate of the European currency does not give too much cause for optimism either. The European macroeconomic statistics do are not encouraging to anyone. The surplus of the balance of trade in Europe dropped down to 1.6 billion from 5.2 billion in March of the current year, according to the Eurostat statistics agency. Moreover, the industrial output in Europe dropped by 1.2 percent in March.

However, no one doubts now that the dollar will continue falling. There will be no reason for its growth as long as the American government derives profit from a weak USD.

Akhtyam Akhtyrov

Read the original in Russian: http://economics.pravda.ru/economics/2003/7/21/61/10680_DOLLARKAPUT.html

Pravda (http://english.pravda.ru/main/18/89/358/10057_dollar.html)


28.05.2003, 10:40
The Perils of a Weak Dollar

Yes, there could be a big upside. But it risks economic warfare and ‘beggar thy neighbor’ policies. That’s political trade, not free trade.


June 2 issue — To anyone with a sense of history, the Bush administration’s decision to bless a cheaper dollar must seem disquieting. It may be defensible as economic policy or simply as acceptance of the inevitable. After all, huge U.S. trade deficits (now roughly $500 billion annually) have flooded the world with so many dollars that a sizable currency decline was, at some point, likely. But the cheaper dollar, by making U.S. exports more price competitive and hurting other countries’ exports, raises the unsettling specter of “beggar thy neighbor” policies.

OK, “BEGGAR THY neighbor” is a mouthful. In plain language, it means that countries protect their own industries—through cheaper currencies, trade barriers, subsidies and regulatory preferences—at the expense of other countries. It’s not free trade; it’s political trade. In the 1930s, this sort of economic nationalism arguably contributed to World War II by weakening opposition to Germany. Countries don’t easily cooperate when they’re blaming each other for their economic problems.

We need to recall this history—and avoid repeating it. In early June, leaders of the world’s wealthy democracies will meet for their annual economic “summit.” Squelching economic nationalism ought to top their agenda. The war in Iraq has already strained relations between the United States and many countries. A further poisoning of the climate could hamper negotiations on everything from trade to terrorism to AIDS. Preventing this sort of calamity is a no-brainer. But it may be hard for two reasons: (1) the world economy is already weak, and (2) a cheaper dollar threatens so many other countries.

Consider: in 2001, the United States bought 88 percent of Canada’s exports, 30 percent of Japan’s, 21 percent of South Korea’s, 20 percent of China’s, 11 percent of Germany’s and 9 percent of France’s. Except for China and South Korea—more on this in a minute—the cheaper dollar threatens them all. Look at the European reaction. “Recession fears grow as U.S. launches ‘weapon of mass destruction’ against Europe,” warns The Guardian (U.K.). EUROPE LOSES THE CURRENCY WAR, says Le Monde (France). HARD EURO, WEAK NERVES—”The weak dollar causes problems to German exporters,” says Der Spiegel (Germany).

The headlines speak volumes about politics; a weaker dollar feeds anti-Americanism. By contrast, the true economics are more complicated.

First, the Bush administration didn’t cause the cheaper dollar, even if it likes the result. What’s lowered the dollar’s exchange rate is an imbalance between supply and demand: foreigners have become less willing to hold all the dollars they earn from their exports to the United States. If they sell dollars and buy euros, the dollar falls and the euro rises.

Second, the dollar’s drop has so far reversed only about a third of the previous 34 percent increase between mid-1995 and early 2002. Other countries “benefited hugely [through exports] from the appreciation of the dollar,” says Fred Bergsten of the Institute for International Economics. It’s “churlish” for foreigners to complain now about a modest “correction.”

Finally, Europeans (and others) can deal with the consequences of a cheaper dollar. One obvious response is to stimulate their domestic economies. “The European Central Bank [the equivalent of the Federal Reserve] can cut interest rates,” says economist Barry Eichengreen of the University of California, Berkeley. He suggests the ECB should cut its main interest rate from 2.5 percent to 1.5 percent.

Still, early signs of economic warfare abound. It’s not merely that a cheaper dollar is regarded elsewhere as a hostile act. In Asia, countries try to rig their currencies to produce trade surpluses. China (with a U.S. trade surplus exceeding $100 billion) has pegged its currency to the dollar; other countries intervene in foreign exchange markets. That’s why they may be less affected by the dollar’s fall. As for the European Union, it seems increasingly mercantilist. Its ban on genetically modified crops discriminates against American farm imports (and the United States has complained to the World Trade Organization).

If economies worsen, nationalistic pressures will intensify. The easiest thing for any democratic government is to try to solve its local problems by punishing some other country’s voters. This was true in the 1930s (“The world trading system fell apart,” notes Eichengreen), and it’s still true. Given the interdependence of major economies, a chain reaction of nationalistic policies—though superficially appealing—could be self-destructive. It could undermine confidence and global investment.

The leaders at the upcoming economic summit should defuse this danger. They need to nudge the ECB toward deep rate cuts and Asian countries (including China) away from protective currency policies. The cheaper dollar signifies that the U.S. economic engine can no longer singlehandedly support the rest of the global economy. If other engines don’t come up to speed, the craft will continue to lose altitude and, possibly, crash—with huge political, as well as economic, side effects.

Newsweek (http://www.msnbc.com/news/917931.asp?0si=-&cp1=1#BODY)


29.05.2003, 16:06
Auch wenn der Verfasser einen ungewöhnlichen Werdegang hat, interessante Analyse;):...

Market Harmonics of the HUI, S&P and USD Index

Market Harmonics

Just as all creatures have different circadian rythmns....so does each market. The stochastic settings for each index are Fibonacci number based, I find indices fascinating, because they will give the quick ability to determine which sectors will be hot and what will not. The stochastic oscillator used in the charts below is the full stochastic setting. The first number (ie 89,21,55) 89 represents the number of periods used to create the stochastic. The second number %K (second value)is a moving average of the original stochastic. The %D is a moving average of the %K. Look for the %K (faster moving line) to do one full oscillation between the two channel lines. This gives clearer signals for tops or bottoms. The stochastics are a bit "IFFY" for calling bottoms, but works like a charm for calling tops. The green lines mark the market tops, and the red lines mark the market bottoms.

The chart below shows the USD Index. Most people are anticipating the USD to bottom in the next week or so. Look at what the stocs suggest. The bottom is probably 2 months away at a minimum.


The chart below shows the HUI. The HUI gave a buy signal two weeks ago The advance suggested here is about 3-4 months remaining, or around mid-September to early October.


The next chart shows the S&P nearly has a sell signal upon us. Again, the bottoms, especially in early 2001 were not very reliable. However, the tops were a near perfect match with the settings.


Elliott Wave on Gold itself is Difficult

The gold market is so manipulated, that to try and throw an accurate Elliott Wave count upon it is fruitless. The "thing" that has most e-wavers going nuts is we are all expecting a downward wave to finish the correction. The HUI is in an uptrend and is very bullish, just so people do not mis-interpret the next statement. Based upon the wave pattern, the move up is either impulsive or corrective......the way the final wave pattern develops in length, time, velocity, wave structure and intricacy will determine which it is. If it is a corrective wave, then the move down could retrace the pattern advance from 2001 by 38.2% to 50% (120-140 if we go to 190-200 on this move) and this would be the bottom of the bear since 1980.....based purely on the wave structure. If this was the case, then it is rare for a wave structure to end so high above a low that was placed in. The move up in gold would be incredibly strong if this pattern was the one that develops.......actually the end results are far more bullish for the corrective wave scenario than if we were in the impulsive leg of a new bull market.

Best for everyone to look at the indices, commodity traders will have a totally different mentality and outlook than an individual trading the stock itself.

David Petch

David Petch has a background in Science, holding a BScH. and Masters degree in Microbiology. He has spent the last five years learning about investing, and the last 1 1/2 years learing Elliott Wave three hours a night on average.

saveheaven.com (http://www.safehaven.com/Editorials/petch/052803.htm)


31.05.2003, 21:27
Elliott Wave on Gold itself is Difficult

Eigentlich ned... ;) :)

01.06.2003, 16:58
Also wenn ich mir Onischka und Hochberg bei Gold anschau ;) :rolleyes: ...... Aber zum Thema :a:



Central Bank decides to keep part of Russia's gold and hard currency reserves in euros

Russia's Central Bank has decided to keep part of Russia's gold and hard currency reserves in euros. This was announced by Russian President Vladimir at a press conference after the Russia-EU summit.

In Putin's words, at the time when he became Russia's president 3 years ago, the gold and hard currency reserves stood at 11 billion dollars. "Now they amount to over 61 billion," Putin added, noting that these reserves were constantly growing.

The European Union is a major trade and economic partner of Russia, Putin pointed out. "As the EU expands, in case we overcome difficulties in economic interaction, our trade turnover will be growing," he stressed.

According to the president, this will certainly lead to an expansion of the euro area in Russia-Europe relations.

"This is an inevitable result of our interaction's expansion," the Russian head of state believes.

Answering journalists' question about which currency, the dollar or the euro, he preferred himself, Vladimir Putin said with a smile: "The rouble."

link (http://newsfromrussia.com/main/2003/05/31/47705_.html)


02.06.2003, 13:48
ich will mal meine momentane Sicht der Dinge abgeben .........

....Dollar unter 1.17 ........ mittelfristiger Boden? ...... könnte heute so bestätigt werden

Der Dollar "könnte" vor einer monatelangen Rallye stehen, die eine Fibo-Korrektur zwischen 109.77 und 92.21 im trade-weighted index ermöglichen könnte, vorausgesetzt dass 92.21 das tief ist (wonach es im Moment sehr aussieht).

..... sieht nicht schlecht aus für den Dollar! ......... mal sehen, was die Börsen daraus machen!

03.06.2003, 23:15
.... bisher passt das vorgezeichnete Szenario recht gut (ein anderes fällt mir aber auch nicht ein) :confused: ..... die nächste wichtige Marke liegt bei 94 im TWI (20 SMA)

..... mal sehen!

07.06.2003, 14:24
Unter der Woche war ja noch die Zinssenkung der EZB. Wider Erwarten hat es den Euro nicht zerlegt, da wurden dann wohl auch gleich ein paar auf dem falschen Fuss erwischt ;). Einer der grössten Tagesverluste der letzten Jahre hatte Folgen:


Parabolic SAR mit neuem sell :rolleyes: .

IMHO Auslöser für "Überlegungsfehler": EZB wurde zu lange kritisiert für das Nicht-Senken, nun hat sie gesenkt was den Spread abschwächte, hat auf dem Weg allerdings die Attraktivität an sich eher erhöht. Die EZB macht endlich etwas und hat immer noch Platz, die FED wird nachziehen und der Spread wieder grösser.


21.06.2003, 09:53
Venzuela im Blickpunkt, Vorgarten der USA ;).....

Wednesday, June 18, 2003
By: Roy S. Carson

Venezuelan move to replace US$ with the €uro upsetting Washington more than Saddam's €uro conversion last November

A move by Venezuelan President Hugo Chavez Frias to replace the US$ with the €uro is seen as upsetting Washington more than when Iraq's Saddam Hussein started using the €uro for oil transactions last November ... precipitating the US-led action to invade Iraq. Beltway bullies are now said to be angered by Venezuela's decision to barter oil with thirteen other Latin American countries, dealing moves to dollarize South America currencies. Intelligence reports say that while the US was able to pull the wool over the international community and ally with Britain's Blair to bulldoze action against former Iran War ally Hussein, the situation with Venezuela is proving more difficult.

While there has been political pretext to cold-shoulder Chavez Frias and his government for supposed links with Cuba's Castro and Libya's Khadaffi, the United States is loathe to do more than to give subversive support to anti-Chavez elements in Venezuela fighting against the Venezuelan President's domestic war against political and economic corruption which have permeated the South American country for the last half-century.

International finance experts see how the US dollar has been devaluing against the €uro, as important players on the international scene convert to the European currency for more stable transactions ... Russia, China, North Korea and Malaysia have begun holding €uros as important hedgings in their foreign exchange reserves as faith in American greenbacks floats down the river.

CIA and other intel organizations, including Britain's MI5, now fear that the next step is that the Organization of Petroleum Exporting Countries (OPEC) is about to switch to €uros ... the immediate effect would be a massive devaluation, perhaps sparking of domino-effect devaluations worldwide in US$-related foreign reserves and foreign debt calculations.

With a massive budget deficit, the United States is running scared of latest intel that the Kingdom of Saudi Arabia is on the brink of converting to the €uros and the opinion held by many OPEC ministers is that the conversion is an inevitability ... the only question left is WHEN?

Arab sources claim that €uro conversion across the Middle and Far East is a rational step to counteract the United States' capacity to "wage further illegal wars (a.k.a. State-sponsored terrorism)" around the world and that any prolonged occupation of Iraq by US/British forces ... and any move towards withdrawal of Iraq from the OPEC cartel ... will only precipitate "remedial action" by like-minded Arab nations to protect their own best interests over Washington's.

A significant step in this direction is that Iran is contemplating switching to the €uro and, as a result, is the latest object of United States undiplomatic interference ... an intel sources says "they are stimulating opposition forces, making covert threats ... the next step is destabilization and quasi-liberation warfare under the pretext of promoting US-style democracy but essentially aimed at maintaining the US dollar as a global transaction currency."

VHeadline.com Venezuela (http://www.vheadline.com/readnews.asp?id=8613)

syr :rolleyes:

23.07.2003, 22:34
Mal wieder Charts :sss.....

Bigcharts führt den € halt immer noch als Ecu :hihi.....


Derzeit beide an wichtigen Stellen im ersten Versuch abgeprallt und $$$ steht schwach da.....

syr :rolleyes:

05.08.2003, 08:06
Ob bald das Top kommt? :rolleyes:

06.08.2003, 02:14
Dienstag, 5. August 2003

Das Schlimmste aus 2 Welten

von unserem Korrespondenten Bill Bonner

Oh là là ... das wird immer interessanter.

Ich rede von der Wirtschaftslage.

Der Aktienmarkt lenkt nur ab; ignorieren sie ihn. Was interessant ist, ist der Anleihenmarkt ... der Dollar ... Gold ... Japan ... und Argentinien.

Der amerikanische Anleihenmarkt setzte seinen Kollaps letzte Woche fort. Die Renditen der 10jährigen US-Staatsanleihen standen am 13. Juni bei 3,07 %. Jetzt stehen sie bei 4,40 %. Das ist das schlimmste Anleihen-Massaker seit 20 Jahren. Das ist "ein Jahrhundersturm", so Franklin Raines, Vorstandsvorsitzender der US-Hypothekenbank Fannie Mae, deren Anleihen sogar noch stärker gefallen sind als die US-Staatsanleihen.

Aber was bedeutet das?

Welchen Weg nehmen die USA ... Richtung Japan oder Richtung Argentinien? Das eine Land lebt mit einer langen, langsamen, soften Depression ... mit Deflation. Seit 1990 sind die Aktienkurse in Tokio per saldo um 80 % gefallen, womit 20 Jahre Kursgewinne in Nichts aufgelöst wurden. Jetzt könnte vielleicht der endgültige Boden erreicht sein.

Argentinien hat eine andere Art der Folter erlitten – eine Wirtschaftskrise mit einer Hyperinflation, und fast ein Drittel der Bevölkerung hat keine Arbeit. Aber auch Argentinien könnte sich bereits auf dem Pfad der Erholung befinden. In den letzten 12 Monaten hat der argentinische Peso gegenüber dem Dollar zugelegt, und die Arbeitslosenquote ist auf 15 % gefallen!

Was die USA betrifft ... ich dachte ja eigentlich, dass sie zunächst den japanischen Weg gehen würden, und danach den argentinischen. Das schien unausweichlich. Die USA sind Japan mit einer gewissen Zeitverzögerung jahrelang gefolgt; warum sollte das jetzt aufhören?

Letzte Woche gab es mehr News, die für den "japanischen Weg" der USA sprachen. In den USA ist die Zahl der Beschäftigten den 6. Monat in Folge zurückgegangen. Mehr als eine halbe Million Arbeitslose sind so entmutigt, dass sie die Suche ganz aufgegeben haben.

In den USA gingen auch die Autoverkäufe zurück. Und der Goldpreis ist etwas zurückgekommen, fast in meine Kaufzone – die bei Kursen unter 350 Dollar pro Feinunze liegt. All diese News riechen nach Sushi.

Ah, aber es gibt einen großen Unterschied zwischen den USA und Japan. Die japanische Volkswirtschaft wurde intern finanziert – durch eine Bevölkerung von Sparern. Die USA hängen hingegen vom Wohlwollen der ausländischen Geldgeber ab. Während die Japaner in ihren langen Abschwung auf einem Kissen von Ersparnissen gleiten konnten, haben die Amerikaner nichts, auf das sie fallen könnten – außer dem harten Beton der Schulden. Und Tag für Tag schütten die Fed von Alan Greenspan und die US-Regierung unter George W. Bush mehr Beton auf. Greenspan hat die Leitzinsen 13 Mal gesenkt, um die Konsumenten tiefer in die Schuldenfalle zu locken. Und die US-Regierung leiht sich fast 500 Mrd. Dollar pro Jahr.

Früher oder später müssen die USA ihren Weg nach Japan aufgeben – und nach links abbiegen, Richtung Argentinien. Denn wie Argentinien – und Deutschland in den 1920ern – und anders als Japan ist Amerika gegenüber dem Rest der Welt stark verschuldet. Deshalb können sich die USA einen langen, deflationären Rückgang nicht erlauben.

Ich fragte mich, ob das große Schiff zurück in den Hafen lief, als am 14. Juni der Abschwung des US-Anleihenmarktes begann. War das nicht ein Signal dafür, dass das Ende des Beginns gekommen war ... dass der Boom am Anleihenmarkt vorüber war ... und dass jetzt Inflation, nicht Deflation, der Feind der Anleihenkäufer sein würde?

Es schien plausibel genug. Aber ich zweifle inzwischen daran. Und hier wird es so lieblich ... so täuschend rasend machend ... so pervers und verrückt: Weil es jetzt so aussieht, als ob die USA jetzt die Deflation von Japan mit steigenden Zinsen bekommen werden!

Ich dachte, das wäre unmöglich ... denn wie könnte eine Wirtschaft gleichzeitig in zwei gegensätzliche Richtungen laufen? Und dennoch – das scheint es zu sein, was gerade passiert. In einem deflationären Abschwung vergrößern sich die Renditeabstände zwischen den Anleihen von guten und denen von schlechten Schuldnern. Mit anderen Worten: In einer Welt der fallenden Preise akzeptieren die Investoren bereitwillig niedrigere Renditen, aber sie machen sich Sorgen über erhöhte Kreditausfallrisiken. In einem inflationären Abschwung hingegen steigen die Zinsen am kurzen wie am langen Ende, die Renditeabstände hingegen vergrößern sich nicht. Die Investoren machen sich nicht soviel Gedanken darüber, dass die Gesellschaften Pleite gehen – sondern sie machen sich Sorgen über den realen Wert der Zins- und Tilgungszahlungen, die sie erhalten.

Derzeit haben wir steigende Renditen (bei lang- und kurzfristigen Anleihen) und gleichzeitig sich vergrößernde Renditeabstände – zur großen Verwirrung der Investoren, Volkswirte und Kommentatoren.

Stephen Roach nennt das den "ultimativen Teufelskreis". Steigende Zinsen zerstören nicht nur den Aufschwung ... sondern sie zerstören auch investiertes Vermögen der Anleihenbesitzer (steigende Renditen bedeuten schließlich fallende Anleihenkurse). Und die fallenden Preise zerstören die Unternehmensgewinne (die noch übrig sind) und Arbeitsplätze. Könnte das sein, liebe(r) Leser(in)? Könnten die USA weder den Weg nach Japan noch den nach Argentinien einschlagen, sondern das Schlimmste aus beiden Welten mitnehmen ... Sushi mit Salsa?

Wir werden es sehen.

07.08.2003, 01:27
Der Euro hat ja bekanntlich die Parität zum Dollar letztes Jahr geschafft.

Jetzt ist der Schweizer Franken dran :lach :lach

The Long-Term Gold Bull
By Steve Saville
July 31, 2003


Below is the long-term chart of the Swiss Franc that was included in our 16th April commentary. We haven't bothered to update the chart because the picture looks very much the same today as it did back in April.


We used the above chart in the earlier commentary to come up with a rough target, in terms of both time and price, for the bull market in the SF that began in October of 2000. Our reasoning was simply that the SF has been in a long-term up-trend since the early 1970s, but within that long-term up-trend there have been two (completed) cyclical bull markets and two cyclical bear markets. Each of the cyclical bull markets reached the top of the long-term upward-sloping channel and lasted 8-10 years while each of the cyclical bear markets ended at the channel bottom and lasted 6 years. If we assume that this cyclical behaviour is going to continue, an assumption that seems reasonable given the price action of the past 3 years and the dollar's poor fundamentals, then the SF will peak in the 2008-2010 period at a SF/US$ rate of greater than 1. In other words, we think the bear market in the US$, relative to the SF, is presently less than half over in terms of both time and price.

Now, as we've explained on many occasions in the past, there is a high positive correlation between the gold price and the SF. We expect this positive correlation to continue, so on this basis it is probable that the long-term trend for gold will remain bullish until 2008-2010.

Despite the high positive correlation between gold and the SF, which, by the way, has been as strong over the past 2 years as it has been at any time over the past 30 years, the long-term gold chart looks different from the long-term SF chart shown above. This is perhaps because gold is a less-liquid market and therefore tends to make larger moves in both directions. In any case, the below chart shows that gold, like the SF, has been in a long-term bull market against the US$ since the early 1970s and that another leg in gold's long-term bull market began over the past 3 years. As opposed to a steady progression within an upward-sloping channel, as has been the case with the SF, gold's long-term chart can best be described as a 5-wave structure. The way we see it, Wave 3 was complete at the 1980 blow-off top, Wave 4 was complete at the 1999 bottom, and Wave 5 to a new all-time high is currently underway.


It is important to keep the above 'big picture' views in mind at all times and to continue checking the evidence against these views to make sure they remain valid. However, it really isn't enough to simply understand that the gold price is probably going to reach a long-term peak in 5-7 years time. This is because at some point there is probably going to be a large counter-trend move lasting 1-3 years, which, unless you are a masochist, you will want to avoid. For example, the SF rose strongly during the 1972-1975 period but then spent 2-3 years trading sideways before rocketing higher to its major peak. And, during this period of currency market stability that occurred between the two big dollar declines of the 1970s the gold price fell by around 50% and the average gold stock fell by around 70%. If you are an investor in gold and gold stocks at the present time it is therefore important to understand what could bring about a multi-year period of stability in the currency market.

We have recently discussed the role that the Fed will potentially play in bringing about a lengthy period of currency market stability. The driving force behind gold's bull market is falling confidence in the US$ in particular and fiat currency in general, but no market moves from the point of maximum confidence to the point of minimum confidence in a straight line. We are therefore anticipating that a substantial counter-trend move in 'dollar confidence' will begin at some point over the next 12 months. As explained in last week's commentary, such a period is likely to begin when the markets come to believe that the Fed has a handle on the inflation problem.

Steve Saville

Quelle: http://www.kitco.com/ind/saville/aug012003.html#top

14.08.2003, 02:07
Man muss sich das mal vorstellen: Die Schulden der USA wachsen um 1 Mio$ - pro Minute! :ek :ek :ek
Die Asiaten machen sich langsam Sorgen: Es kann nicht mehr lange gut gehen, dass sie den Amis Waren auf Kredit liefern dürfen. :p


Asia, its reserves and the coming dollar crisis
By Richard Duncan 21 May 2003
Author of the new book, The Dollar Crisis, Richard Duncan explains why the dollar is the source of global deflation.

FinanceAsia: Posterity may remember it as a seminal book in the field of 21st century economics. Indeed, rarely has a book offered such a grim yet well argued view of the current economic situation facing the world and Asia. The author - a former Salomon banker, and World Bank staffer - is Richard Duncan and the book is called the Dollar Crisis. In this essay, the American explains why the US dollar is at the root of global deflation, and recent bubbles, and what it will mean for Asia.

During the 30 years since the breakdown of the Bretton Woods International Monetary System, the global economy has been flooded with dollar liquidity. International reserves are one of the best measures of that liquidity. During the quasi-gold standard Bretton Woods era, international reserves expanded only slowly. For example, total international reserves increased by only 55% during the 20 years between 1949 and 1969, the year Bretton Woods began to come under strain. Since 1969, total international reserves have surged by more than 2000%. This explosion of reserve assets has been one of the most significant economic events of the last 50 years.


Today, Asian central banks hold approximately $1.5 trillion in US dollar-denominated reserve assets. Most of the world's international reserves come into existence as a result of the United States current account deficit. That deficit is now $1 million a minute. Last year, it amounted to $503 billion or roughly 2% of global GDP. The combined international reserves of the countries with a current account surplus increase by more or less the same amount as the US current account deficit each year. So central bankers must worry not only about their existing stockpile of dollar reserves, but also about the flow of new US dollar reserves they will continue to accumulate each year so long as their countries continue to achieve a surplus on their overall balance of payments.

With the depreciation of the dollar rapidly gaining momentum, Asian central bankers are scrambling to find alternative, non-dollar denominated investment vehicles in which to hold their countries' reserves. Consequently, this is a topic that is attracting considerable attention in the press.

There is a related issue of much greater importance being entirely overlooked, however. The surge in international reserves has created unprecedented macroeconomic imbalances that are destabilizing the global economy. The global economic disequilibrium caused by these imbalances is the subject of this article. It is also the subject my recently published book, THE DOLLAR CRISIS: Causes, Consequences, Cures (John Wiley & Sons, 2003).

Since the breakdown of Bretton Woods, dollars have replaced gold as the international reserve currency. The international monetary system now functions on a Dollar Standard rather than a Gold Standard.


The primary characteristic of The Dollar Standard is that it has allowed the United States to finance extraordinarily large current account deficits by selling debt instruments to its trading partners instead of paying for its imports with gold as would have been required under the Bretton Woods System or The Gold Standard.

In this manner, The Dollar Standard has ushered in the age of globalization by allowing the rest of the world to sell their products to the United States on credit. This arrangement has had the benefit of allowing much more rapid economic growth, particularly in large parts of the developing world, than could have occurred otherwise.

It also has put downward pressure on consumer prices and, therefore, interest rates in the United States as cheap manufactured goods made with very low-cost labor have been imported into the United States in rapidly increasing amounts.

However, it is now becoming increasingly apparent that The Dollar Standard has also resulted in a number of undesirable and potentially disastrous consequences.

First, it is clear that countries which built up large stockpiles of international reserves through current account or financial account surpluses have experienced severe economic overheating and hyper-inflation in asset prices that ultimately resulted in economic collapse. Japan and the Asia crisis countries are the most obvious examples of countries that suffered from that process. Those countries were able to avoid complete economic depression only because their governments went deeply into debt to bailout the depositors of their bankrupt banks.

Second, flaws in the current international monetary system have also resulted in economic overheating and hyper-inflation in asset prices in the United States as that country's trading partners have reinvested their dollar surpluses (i.e. their reserve assets) in dollar-denominated assets. Their acquisitions of stocks, corporate bonds, and US agency debt have helped fuel the stock market bubble, facilitated the extraordinary misallocation of corporate capital, and helped drive US property prices to unsustainable levels.

Third, the credit creation The Dollar Standard made possible has resulted in overinvestment on a grand scale across almost every industry worldwide. Overinvestment has produced excess capacity and deflationary pressures that are undermining corporate profitability around the world.

To understand how this unprecedented expansion of dollar-denominated reserve assets has created bubble economies, systemic banking crises and deflation around the world, it is first necessary to understand how the large inflow of dollar reserves affects the banking system in countries with balance of payments surpluses. Next it is necessary to understand how the central banks in those countries come to hold the dollars that enter their economies as a result of current account (or, less commonly, financial account) surpluses. Finally, an examination of the investment alternatives available to the central banks, and the economic impact resulting from each of those alternatives, makes it clear why central banks hold most of their reserve assets in dollars.

The United States is the major deficit nation. When exporters from surplus countries bring their dollar earnings home, those dollars enter their domestic banking system and, being exogenous to the system, act just like high powered money.

The affect on the economy is just the same as if the central bank of that country had injected high powered money into the banking system: as those export earnings are deposited into commercial banks, they sparked off an explosion of credit creation. That is because when new deposits enter a banking system they are lent and re-lent multiple times given that commercial banks need only set aside a fraction of the credit they extend as reserves.

Take Thailand as an example. Beginning in 1986, loan growth expanded by 25% to 30% a year for the next 10 years. Had Thailand been a closed economy without a large balance of payments surplus, such rapid loan growth would have been impossible. The banks would have very quickly run out of deposits to lend, and the economy would have slowed down very much sooner.

In the event, however, so much foreign capital came into Thailand and was deposited in the Thai banks that the deposits never ran out, and the lending spree went on for more than a decade. By 1990 an asset bubble in property had developed. Every inch of Thailand had gone up in value from 4 to 10 times. Higher property prices provided more collateral backing for yet more loans.

An incredible building boom began. A thousand high rise buildings were added to the skyline. All the building material industries quadrupled their capacity. Corporate profits surged and the stock market shot higher. Every industry had access to cheap credit; and every industry dramatically expanded capacity. The economy rocketed into double digit annual growth.

And, so it was in all the countries that rapidly built up large foreign exchange reserves: credit expansion surged, investment and economic growth accelerated at an extraordinary pace, and asset price bubbles began to form. That was the case in Japan in the 1980s and in Thailand and the other Asia cisis cuntries in the 1990s. It is also true of China today. Wherever reserve assets ballooned in a short space of time, economic bubbles formed.

Unfortunately, economic bubbles always pop. And when they pop, they leave behind two serious problems.

First, they cause systemic banking crises that require governments to go deeply in debt to bailout the depositors of the failed banks. Economic bubbles always end in excess industrial capacity and/or unsustainably high asset prices. Banks fail because deflating asset prices and falling product prices make it impossible for over-stretched borrowers to repay their loans.

During the Bretton Woods era, systemic banking crises were practically unheard of. Since Bretton Woods broke down, they have occurred on a nearly pandemic scale.


The preceding table lists 40 banking crises between 1980 and today and provides estimates of their high fiscal costs as a percentage of GDP.

The second problem economic bubbles leave behind when they pop is excess industrial capacity caused by the extraordinary expansion of credit during the boom years. The problem with excess capacity is that it causes deflation.

Japan is suffering from deflation. Hong Kong and Taiwan have deflation. Even China, where an economic bubble is still inflating, has been experiencing deflation since 1998. The rest of the Asia crisis countries only avoided deflation by drastically devaluing their currencies and exporting deflation abroad. Think of the impact that the over expansion of Korea's semiconductor industry has had on global chip prices.

Hopefully the preceding paragraphs have clarified how unprecedented US current account deficits have sparked off extraordinary credit creation in those countries with the corresponding surpluses, causing unsustainable economic bubbles which subsequently implode, leaving behind wrecked banking systems, heavily indebted governments, excess capacity and deflation.

Now consider how those US current account deficits end up being held as dollar-denominated assets by the central banks of the surplus countries.

There are several reasons why central banks accumulate international reserves. The most compelling reason - in Asia, at least - is the desire of the central banks to prevent their currencies from appreciating. When Asian exporters sell products in the United States, they earn dollars. When they bring those dollars back to Asia, they either exchange them for their domestic currency on the currency market or deposit them in their banks, in which case their banks exchange them for the domestic currency.

This process puts upward pressure on the Asian currencies. Asian policy makers do not want their currencies to appreciate since currency appreciation would cause a reduction in exports and, therefore, a reduction in economic growth.

Consequently, Asian central banks intervene in the currency market and acquire the dollars that the exporters and banks wish to sell. They pay for those dollars by issuing their own currency, whether Yen, Baht or Yuan. Asia's export-led economic growth strategy therefore requires that the Asian central banks build up their dollar reserve assets to prevent their currencies from appreciating. This process simultaneously expands the domestic money supply, which further fuels the domestic economy.

In theory, it is possible for the Asia central banks to absorb the domestic liquidity created through this process by issuing bonds to soak back up the currency they issued to acquire the dollars. However, sterilization on a grand scale is expensive as the central banks must pay interest on the bonds they issue. Judging by the size of the economic bubbles that have arisen across most of Asia during the past two decades, it is quite clear that if such sterilization was attempted at all, it occurred on too small a scale to be effective.

Once the Asian central banks have acquired dollars, they must either convert them into some other foreign currency or else invest those dollars in an interest bearing dollar-denominated asset in order to earn a return on those funds.

They must decide between holding those dollars in dollar-denominated investments that will generate a return, converting the dollars into some other currency, or else buying some other store of value such as gold.

Their options are fewer than they at first appear however. That is because the amounts involved are so large.

For example, China and Japan each enjoyed a trade surplus of more than $100 billion with the United States last year. That is in addition to the hundreds of billions of dollar-denominated reserves assets they had accumulated in prior years.

Any attempt to convert even a small portion of that into gold would drive the price of gold wildly higher. Similarly, any strategy that attempted to convert a significant portion of those dollar holdings into Euros would cause a very sharp spike in that currency that the European Central Bank and other European policy makers would view as most unwelcome because of the negative impact it would have on Europe's exports.

It is quite probable that politicians and central bankers in Europe would call their counterparts in Asia and politely ask them to stop driving up the Euro. Or, imagine the response in Tokyo if China began converting its dollar hoard into Yen. Diplomatically, it would be unacceptable and, for that reason, it is not an option.

The fact of the matter is that Asia's dollar reserve holdings, both stock and flow, are so large that they only place they can be accommodated is in US Dollar-denominated assets such as Treasury Bonds; agency debt, such as Fannie Mae and Freddie Mac; corporate debt; equities; or bank deposits.

That is why it has been so easy for the United States to finance its enormous current account deficit. There is really nowhere else for that much money to go.

In other words, the US financial account surplus is actually merely a function of the US current account deficit. The surplus countries can't afford to convert those dollars into their own currencies because of the harm that would do to their exports, and other countries do not want the dollars converted into their currencies for the same reason.

Therefore, the dollar could be described as a boomerang currency. First it goes abroad as the export earnings of non-US exporters. Then foreign central banks send it back to be invested in US dollar-denominated assets because there is really no place else to put it.

It is ironic that not only has the US current account deficit fueled bubble economies in all the major surplus countries, it has also helped create the current economic bubble in the United States as the dollar export earnings of surplus nations come back into the US.

The investments by the surplus countries into US stocks, corporate bonds, and US agency debt have helped fuel the US stock market bubble, facilitated the extraordinary misallocation of corporate capital, and helped inflate the current US property bubble.

This year, the US current account deficit will be $500 to $600 billion. That means the surplus nations will have to find places to invest that sum of dollars in dollar-denominated assets. This is an annual task that is becoming increasingly difficult.

Which sector or sectors of the US economy can afford to issue and service $500 to $600 billion in additional debt - not only this year, but every year into the future so long as the United States continues to run such large current account deficits? The consumer sector has never been more indebted and corporations are going bankrupt in record numbers.

Neither the consumer sector nor the business sector can afford to take on any more debt. That leaves only the government sector.

Strangely, it is rather fortuitous - at least from the point of view of Asian central banks - that the United States government has once again begun to run such large budget deficits. At this stage in the business cycle, only the US government has the debt servicing capacity to issue and service the amounts of debt required to provide a safe home for the half a trillion dollars and more that the US current account deficit is adding to the world's stock of reserve assets each year.

This year, the US government deficit is well on its way toward $400 billion. Foreign central banks will be more than happy to snap all that up and then some.

It is no coincidence that the worst of the bubble excesses took place in the United Stated between 1998 and 2000 when the government briefly achieved a budget surplus. During those years when the government stopped issuing new treasury bonds, the many countries experiencing a current account surplus with the US had little choice but to buy other, more risky dollar-denominated assets such as Fannie Maes, corporate bonds or NASDAQ stocks.

Those are the years of supper easy credit when Fannie and Freddy dramatically expanded their balance sheets and sparked-off the US property boom. And those are the years when corporations found it so easy to raise and waste money. Finally, those were the years of the great NASDAQ blow-off.

Such excesses are unlikely to be repeated now that the Department of Treasury will be selling hundreds of billions of dollars of its debt at auction every few months now for years into the future. New US government debt will supply most of the dollar-denominated investment vehicles required to house the current account surpluses of the United States' trading partners. Fannie Mae and US corporates will be happy to supply the rest.

The United States' net indebtedness to the rest of the world is approximately $3 trillion or 30% of US GDP. It increased by approximately $500 billion, or 5% of GDP, last year and it will increase by a similar amount again this year and the year after and every year into the future until a sharp fall in the value of the dollar against the currencies of all its major trading partners puts an end to the gapping US current account deficit or until the United States is so heavily indebted to the rest of the world that it becomes incapable of servicing the interest on its multi-trillion dollar debt.

It is difficult to know which will happen first. However, it is certain that one of the two will eventually occur. Either outcome would put an end to the era of export-led growth that Asia has enjoyed for so long.

In the meantime, and here is the story that is of much greater significance than how much Asian central banks will lose as the dollar depreciates, so long as the US current account deficit continues to flood the world with US Dollar liquidity - in effect blowing up the global money supply - new asset price bubble are likely to inflate and implode; more systemic banking crises can be expected to occur; and intensifying deflationary pressure can be anticipated as falling interest rates and easy credit result in excess industrial capacity and falling prices.

In other words, so long as the US current account deficit persists, the global economic disequilibrium that it generates will continue to cause economic upheavals around the world. The costs of those upheavals will far exceed the foreign exchange losses Asian central banks will suffer as the dollar continues to weaken in the months and years ahead.

Quelle: http://www.financeasia.com/articles/E867AEB6-642E-11D7-81FA0090277E174B.cfm

14.08.2003, 20:24
Hallo Marcus

Eine weitere üble Prognose für den US-Dollar! Da das FED einen grossen Einfluss auf die USD-Entwicklung ausübt, scheint mir eine Spekulation mit USD-Put-Optionen, auch wenn man an dessen Fall aus fundamentaler Sicht glaubt, doch mit gewissen Risiken behaftet, da wir uns eben - zumindest in einem bestimmten Mass - nicht in einem "freien" Markt befinden. Doch auch das FED ist nicht übermächtig und kann die Staumauer auch nicht unendlich hoch bauen. Dies würde eigentlich dafür sprechen, USD-Put-Optionen mit LANGER Laufzeit (Mitte 2004) zu kaufen. Was meinst Du dazu? Hast Du insoweit eine Empfehlung? Ich habe bis vor kurzem nur in Aktien investiert bzw. mit ihnen getradet. Kannst Du mir eine Website empfehlen, die einen umfassenden Einblick in die Welt der Optionen und die dort zu beachtenden Kriterien gibt?


Es freut mich, nach Schliessung des Börsenfreunde-Forums deine interessanten Beiträge hier weiterverfolgen zu können. :)

25.08.2003, 14:54
So, Buddhi,

Nun ist der Dollar an der angestrebten Marke von 1.42 angekommen. Zeit für Puts aber für langfristige (2004)!

Ich habe USDPZ im PF.


25.08.2003, 17:35
Sorry, USDPC mit Laufzeit 16.3.04, nicht USDPZ


25.08.2003, 23:56
Original geschrieben von Buddhi
Hallo Marcus

Kannst Du mir eine Website empfehlen, die einen umfassenden Einblick in die Welt der Optionen und die dort zu beachtenden Kriterien gibt?


Es freut mich, nach Schliessung des Börsenfreunde-Forums deine interessanten Beiträge hier weiterverfolgen zu können. :)
hallo buddhy ;)

guck mal hier :eek:


http://www.warrants.ch/ ( know-how, Akademie)


gruss :winke:

26.08.2003, 00:59
da ist man wieder mal fleissig am stützen :eek: :eek: :eek: :eek:




27.08.2003, 23:32
Mittwoch, 27. August 2003

US-Haushaltsdefizit: 500 Mrd. Dollar möglich!

von unserem Korrespondenten Bill Bonner

Es wird jetzt erwartet, dass das amerikanische Haushaltsdefizit (auf Bundesebene) im nächsten Jahr eine halbe Billion Dollar erreichen wird – so ein Komitee des US-Kongresses. John Spratt von der Demokratischen Partei sagt, dass sich das Defizit in den nächsten 10 Jahren auf insgesamt 3,7 Billion Dollar belaufen könnte.

Eine halbe Billion – das ist auch der Betrag an Kapital, den die USA brauchen, um ihre Importe aus Übersee finanzieren zu können. So hoch ist ihr Handelsbilanzdefizit.

Wie können diese Defizite finanziert werden? Die Sparraten der Konsumenten liegen Nahe Null. Ersparnisse von Unternehmen oder das Zurücklegen von Gewinnen – negativ. Das Geld muss aus dem Ausland kommen.

Und dennoch sagen in den USA viele Volkswirte, dass diese Defizite gesunde Zeichen seien. Das Haushaltsdefizit stimuliere die Wirtschaft, sagen sie. Und das Handelsbilanzdefizit zeige doch, wie stark die Ausländer die Amerikaner verehren würden; die Investoren in Übersee kaufen amerikanische Aktien und Anleihen, weil sie wissen, dass die USA die dynamischste Volkswirtschaft der Welt haben. Und nebenbei – was sonst können sie mit dem Geld schon tun?

Deshalb ist es zu einer verrückten Situation gekommen: Die Gläubiger der Welt sind von der Gnade ihres größten Schuldners abhängig.

Die Idee ist absurd; meine Intuition sagt mir das. Steht nicht schon in der Bibel, dass "der Schuldner der Sklave des Gläubigers ist"? Und ist es bei einem Treffen von Bankern und Schuldnern nicht der Schuldner, der jammert?

Und dennoch meinen Fed-Gouverneure, Universitäts-Dozenten und TV-Kommentatoren, dass China und die anderen großen Handelspartner der USA ihre Handelsbilanzüberschüsse in den USA reinvestieren müssen.

Diese ausländischen Investoren haben bereits Billionen verloren – zunächst einmal, als der Dollar gegenüber den größeren Währungen in den letzten 12 Monaten fiel ... und dann, als die amerikanischen Anleihenkurse in den letzten Monaten kollabiert sind. Ich bezweifle nicht, dass die Investoren aus Übersee keine Genies sind. Aber selbst ein nicht so kluger Investor wird irgendwann merken, wie er den Verlust seines Geldes stoppen kann.

"Ja, aber wir haben sie in der Hand", sagen US-Volkswirte. "Wenn sie ihre Handelsbilanzüberschüsse nicht in den USA investieren, dann wird der Dollar noch weiter fallen. Und dann werden sie nicht mehr soviel von ihren Produkte in den USA verkaufen können. Es ist eine Tatsache: Ohne die US-Defizite würde die gesamte Weltwirtschaft den Bach runtergehen."

Die USA könnte man mit einer Gesellschaft vergleichen, die in einer kleinen Stadt gegründet wird ... und dann das größte Geschäft dieser Stadt wird. Bald hängt die ganze Stadt von dieser Gesellschaft ab. Sie ist der größte Käufer bei den anderen Läden. Ihre Angestellten sind die größten Käufer in den anderen Läden. Ihre Vorstände sind die besten Kunden der lokalen Kneipe ... und die größten Schuldner der lokalen Bank. Ihre Besitzer geben die nettesten Parties, und sie sind anerkannte Mitglieder der lokalen Kirche, bei der sie auch am meisten spenden.

Aber diese Gesellschaft macht jedes Jahr Verluste. Deshalb geht sie zu der Bank und zu den Kaufleuten und sagt: Gebt uns mehr Kredite, oder wir werden nichts mehr ausgeben. Die Gesellschaft erhält immer mehr Kredite, denn jeder Kaufmann will das Geschäft mit dieser Gesellschaft am Leben erhalten. Der Besitzer der Kneipe lässt anschreiben. Der Banker erhöht die Kreditlinie der Gesellschaft. Und in der Kirche gibt der Priester dem Besitzer des Unternehmens einen besonders warmen Handschlag.

Die Einwohner der Stadt könnten zusammenkommen und den Entschluss fassen, die Gesellschaft zu unterstützen, "zum Wohle der gesamten Stadt".

Aber wenn die Gesellschaft immer weiter Verluste macht und immer weiter Kredite fordert, dann können die Einwohner dieser Stadt langsam, nach und nach, beginnen, sich wie Idioten zu fühlen. "Wenn werden wir jemals bezahlt werden", fragen sie. "Und wie", wollen sie wissen. "Es mag im Interesse der ganzen Stadt liegen, dass die Gesellschaft Geld ausgibt", so der Wirt in der Kneipe zu sich selbst, "aber ich bin es leid, den guten Schnaps immer nur ohne Bezahlung auszuschenken."

Irgendwann einmal sind sie es alle leid, ... und sie versuchen, ihre Schuldscheine, die sie von dieser Gesellschaft haben, zu jedem Preis loszuwerden ... und sie vergessen, die Frau des Besitzers zum Tee einzuladen.

Irgendwann wird das auch beim Dollar der Fall sein. Wann? Das weiß ich nicht ...

Quelle: investorverlag.de

29.08.2003, 15:02
Dollar/Yen aktuell 116,20


unter 115,50 ist wohl der Ofen aus...

naja und die neue Leitwährung Gold zeigt es ja an wo die Reise hingeht

08.09.2003, 09:43
Das Sentiment im EUR/USD hat sich auch stärker zugunsten der Bullen verändert (Kontraindikator?):

Bulls (also EURO-positiv): 48% (+3%)

Neutral: 25% (+1%)

Bears: 27% (-4%)

Die Bärenquote ist recht niedrig. Auch wenn es vielleicht noch aufwärtspotential gibt (> 1.1140/50), so gilt es aber auch genauso, wichitge Unterstützungen zu halten (um die 1.1020/10) .......

Der USD-Index zeigt evtl. schon Anzeichen, wieder ein Top erreicht zu haben, das ihn letztendlich zu neuen Tiefs führen dürfte .... soweit ist es aber noch nicht und diese Bewegung wird auch sehr lange in der Ausbildung dauern .......... der USD wird für längere Zeit sehr wahrscheinlich einer relativ breiten Handeslspanne verbleiben.

08.09.2003, 19:27
Für MF: :D!

Bei uns windet es etwas sehr heftig, Hurricane im Unfeld wenn auch ein paar hundert Kilometer weg. Also wird's halt ein Tag im Hotel, mal wieder im Inet somit :)....

@hoofie, weshalb sollten Senti-Daten bei Euro eine Wirkung haben wenn dies im SPX gemäss deiner eigenen Aussage nicht der Fall ist ;)?

Aber eigentlich wollte ich ein Pic anhängen.....

Data source: CFTC.gov, blue = commercial traders | green = large traders | red = small traders



08.09.2003, 19:35
Original geschrieben von mfabian
Mittwoch, 27. August 2003

US-Haushaltsdefizit: 500 Mrd. Dollar möglich!

von unserem Korrespondenten Bill Bonner

White House says deficit is still `manageable`; expects the federal deficit to reach $562 billion

CBS Marketwatch ^ | 09-08-03

WASHINGTON (CBS.MW) -- President Bush still believes the federal budget deficit is manageable even after requesting an additional $87 billion to pay for the war in Iraq and other security measures, White House spokesman Scott McClellan said Monday.

With the $87 billion request from Bush on Sunday, the White House expects the federal deficit to reach $562 billion next fiscal year.



08.09.2003, 20:34
Original geschrieben von syracus
Für MF: :D!

Bei uns windet es etwas sehr heftig, Hurricane im Unfeld wenn auch ein paar hundert Kilometer weg. Also wird's halt ein Tag im Hotel, mal wieder im Inet somit :)....

@hoofie, weshalb sollten Senti-Daten bei Euro eine Wirkung haben wenn dies im SPX gemäss deiner eigenen Aussage nicht der Fall ist ;)?

Aber eigentlich wollte ich ein Pic anhängen.....


Das kann ich Dir ganz einfach erklären ...... die FX-Märkte sind längst keine Spielweise vieler individueller Anleger ..... die Aktienmärkte sehr wohl! ...... und der Ursprung der Sentiment-Daten sind bei Währungen und Aktien grundverschieden! ..... deswegen ist auch eine unterschiedliche Interpretation gerechtfertigt! ...... und da braucht's kein ;)

08.09.2003, 20:48
Doch, gute Antwort :), mich nervt ja die BoJ auch :hihi.... Könntest Du nicht bitte den Chart raus *edit*? Chartflut:(.


03.10.2003, 10:41
Ok, mittlerweile ist die Vermutung ja eingetroffen, die BoJ hat nachgegeben mit G7-Dubai :D......

The Market Nugget October 1, 2003

The Impending Currency Crisis

In the years that I have followed the markets I cannot remember the last time I heard an administration send out such mixed signals. First, we are told a strong dollar is the policy. Then, after a meeting of the world most industrialized nations, a communiqué is released indicating governments should refrain from interfering with free and flexible exchange rates. Yesterday, on behalf of the Bank of Japan, the U.S. Federal Reserve Bank of New York intervenes in the foreign exchange market to prop up the dollar.

What is the policy a strong dollar gained though manipulation, or free and flexible exchange rates? This administration needs either to remain mum or send out a consistent message, but the mixed signals are, in my opinion, causing more harm than good. If actions do not match words then how are economic participants to make planning decisions?

After intervening yesterday on behalf of the Japanese Reuters News Service reports today, a reiteration of the message to China from the Treasury Secretary’s Office to adopt a market based exchange rate. Yet another mixed signal, actions speak louder than words, please set an example for us to follow.

In spite of the words directed to China I say be careful what you wish for because you just might get it and you might not like the consequences. A free float of the Yuan, if it then appreciated against the U.S. Dollar, could be devastating to the global economy. Without structural changes, a free float now would plunge the world into recession, perhaps depression.

The United States is currently serving as the world’s primary engine of economic growth and our trade deficit with China is the enabling factor. We buy goods from China with American dollars; the Chinese recycle these dollars and buy U.S. Treasuries. Chinese demand for U. S. Treasury assets provides crucial demand that prevents interest rates from rising. Given the large budgetary deficit we have this is an absolute necessity.

Low interest rates allow our government to borrow more money than it otherwise could and to allow consumers, both household and business, to do likewise. The currency relationship that currently exists benefits both China and The United States. Of course, there are many reasons why, in the longer term, this is not a benefit, but that is a topic for another Market Nugget.

The big question is how long can the United States continue to pile on debt? The ability to service the debt is the key, as any banker will tell you. Debt service capacity for a government is directly related to its capacity to tax the population. We may now be close to reaching the nations debt service limits.

Given the precarious situation of the U.S. consumer and economy, the U.S. Government clearly cannot raise taxes to service the growing debt. The economy must grow to ease the burden. Even a rollback of the recent tax cuts are now out of the question as consumers have already incurred new debts and require the enacted cuts to service that debt.

My question: why is the U.S. Government bent upon encouraging the Chinese Government to revalue the Yuan? Any import of inflation will put pressure on U.S. interest rates to rise. Rising interest rates will cut off our capacity to service our debt and then the game is over.

We played the same game with the Japanese in the late 1980’s and where did it get us? Our dollar decreased against the Yen prompting the Japanese to pull investments out of the U.S. Asset prices in the U.S. fell touching off the savings and loan debacle, which plunged our economy into a deep recession.

On the other side of the Ocean, the Japanese saw reduced capital flows as their current account trade surplus shrank. These capital flows were financing the Japanese asset bubble. As the flow of capital dried up, asset prices plunged while debts encumbering those assets remained; and for the last 13 years they have been working through the problems.

The Chinese learned a valuable lesson witnessing the experience of the Japanese. Before the Yuan / Dollar exchange rate can freely float the Government of China must ensure their bankruptcy laws and banking system can deal with the consequences. Reforms are taking place, but these things take time.

Like Japan, the Chinese are experiencing an asset bubble financed by their current account trade surplus with the rest of the world. We must remember, as a communist nation, China does not have the capitalist laws necessary to deal with shock to they system. Once the Chinese have sufficiently reformed their institutions I would expect the Yuan to float and then the U.S. will pay the price.

When the U.S. pays the full price gold will be at its peak and the US Dollar will be close to its lows. The one thing you do not want to have when it comes time to pay the piper is debt. Make plans now. Diversify your assets, if you have real estate, pay down the mortgage as much as possible. Buy some Gold and Silver and invest in some Euros and some foreign assets. Watch for signs of a diversification out of the US Treasury assets by the Chinese as an indication a currency exchange rate adjustment is about to occur.

The Weekly Market Review:


September ended on a down note, but today saw a nice reversal of the downdraft. I still do not think we are out of the woods. As you know, I follow the Dow Jones Industrials and Transportation Averages closely and I closely watch the action in one for confirmation by the other.

On September 26 the Dow Transports closed at 2663.83. This was lower than the previous correction low of 2705.27 set on September 10, 2003. From this Sept 10 low, the Transports rallied as high as 2825.07 before selling off to the low of Sept 26. The Dow Industrials confirmed with a lower low yesterday at 9275.06.

The market smells as if it is running into trouble, smoke signals are indicating possible topping action. However, both the Dow Industrial and Dow Transportation Averages have rebounded off the lows so not all is yet lost. To stave off the next phase of the secular bear market we need to see both the Industrials and Transports rally and exceed their previous highs, which were simultaneously set on September 18, 2003. Those values were 9659.13 for the Industrials and 2825.07 for the Transports.

The Dow Utilities have been a good place to hide out. As of today’s close, the Dow Utilities are at 253.03, the old closing high was 255.00 set on June 16, 2003. A close above 255.00 would set the Dow Utilities up for a move higher, first target would be the 275 region, about 7.50% higher. See the Action Nugget below for how to participate in this move.


Gold is consolidating and holding at current levels. However, after having set a new high of US $388.40 on September 24 we have seen some backing and filling.

Although the trend remains clearly up, the Gold high against the Euro was set on September 3 at $345.46, against the Canadian Dollar on August 27 at C$525.42, against the Yen and Pound on September 9 at ¥447.35 and £240.68. To mark the next leg of the Gold Bull market we need to see new highs against all the currencies.

Silver is almost the same story as gold, we last saw new highs against all the currencies on September 11, 2003. Since then we have mostly marked time with consolidation the primary theme.

Copper is also consolidating, but versus the US dollar is holding up well. A new high of 83.25¢ per pound was recorded on September 25. However, versus the Yen, the last time a new high was reached was back on July 31, 2003. Copper is showing all the signs of a continuing strong market. I think the weakness against the Yen may be only temporarily and is now showing oversold signs; this is obviously related to currency market manipulations.

In reviewing the Commitment of Traders Reports there shows no clear direction forthcoming. For Silver, some liquidation of Commercial Longs and some Commercial short covering are canceling each other out producing a sideways market. Recall closing a long position you need to sell and closing a short position requires you to buy.

For Gold, the Commitment of Traders Reports indicates that there has been an increase in both long and short positions, in pretty much lockstep once again canceling out both directions. December, the current contract month will be very interesting. I am anxious to see how this very large open position resolves itself. I expect we will see significant volatility.


syr :rolleyes:

05.10.2003, 09:43
Das nächste was wir im Dollar sehen dürften, ist eine groß angelegte Rallye.

PS: Meine Meinung.

05.10.2003, 10:19
Ob's dieses Mal besser passt als #47 ;)? Gut möglich :p......


Ab 1.42 short mit Ziel 1.30.-. 1.31.- wurden es :cool:.....


07.10.2003, 10:18
Und durch, USD-Cash per 7.10.2003 neues 52-Wochentief, die 92 sind durch und das "Ziel 90" aus dem Eröffnungsbeitrag von Dezember 02 bald einmal da :sss......



And now, currency wars

By Marc Erikson
Oct 7, 2003

Complementing its strategic-military doctrine of preemptive action against putative constructors and proliferators of weapons of mass destruction, the administration of US President George W Bush has turned to preemption in the financial sphere to challenge unpalatable currency regimes and counteract their alleged ill effects on the US economy. China, Japan, and other Asian nations are the targeted offenders ... and, for a change of pace, victory in the war unleashed at the Group of Seven (G7) Dubai meetings is to be achieved not through overwhelming US strength, but through deliberately induced US (dollar) weakness.

The ultimate goal is the same: defense of the US homeland - first against terrorists and their would-be suppliers, now also against foreign traders and thieves of US jobs armed with the weapons of "unfairly undervalued" currencies. But the Washington cast of characters pitted against Asian central bankers and finance ministers is a strange one. You'd expect John Snow, the treasury secretary, and he has, indeed, taken the point. With his early-September Tokyo-Beijing-Phuket (Asia-Pacific Economic Cooperation finance ministers' meeting) junket, he set the stage for the Dubai declaration on "flexible exchange rates". But Texas oilman Don Evans, the commerce secretary, Sam Bodman, his deputy, formally in charge of the National Oceanic and Atmospheric Administration and the National Institute of Standards and Technology?

To figure that one out, you have to go back to September 1, Labor Day in the United States. On that occasion, Bush, accompanied by his chief political strategist Karl Rove, stood in the driving rain at an operating engineers training center in Richfield, Ohio, and told assembled trade unionists, "We've lost thousands of jobs in manufacturing, some of it because of productivity gains - but some of it because production moved overseas ... One way to make sure that the manufacturing sector does well is to send a message overseas, [to] say, look, we expect there to be a level playing field when it comes to trade."

Bush was there and said what he said because Rove, who must get Bush re-elected, had told him so. Some 2.5 million US manufacturing jobs have been lost since early 2001 ... to China, say the trade unions, the National Association of Manufacturers (NAM) and the US Chambers of Commerce, and they - and, of course, the Democrats running for president - are blaming Bush. It's nonsense. The United States has been losing manufacturing jobs for decades. Ten percent of the workforce is now employed in manufacturing; in another 10 years, according to Organization of Economic Cooperation and Development (OECD) estimates, it will be 2-3 percent. It's a structural shift in the US economy that will not be reversed. But it does loom as a major election issue and someone has to be blamed. So, the NAM, Rove and the Department of Commerce decided that it might as well be China, which now runs an annual trade surplus of more than $100 billion with the US.

The next step in that logic is to blame the "undervalued Chinese yuan", which is pegged to the US dollar. Never mind that China has major competitive advantages, from cheap labor to new production technologies, in large part installed there by US companies producing for export to the US. Not a single US job would return to Ohio or Tennessee were the yuan revalued or floated as the NAM, the Commerce Department and a bunch of senators demand and as John Snow demanded when - also on Labor Day - he spoke in Tokyo and later in Beijing and Phuket. Jobs lost by China as the result of a higher yuan would go to Vietnam or Indonesia.

Karl Rove is a nasty piece of work, a college dropout from Utah who learned his metier from the likes of Donald Segretti, a onetime Richard Nixon dirty-tricks specialist. But he is one of George W's closest buddies and has been with the Bush family ever since he advised the older Bush in his election campaigns, then young George in his campaigns for governor of Texas and, of course, in the 2000 presidential race. About international finance, Rove knows little; but China will have looked like an easy target and, by attacking the yuan peg, at least the Bush administration would look as if it was doing something in the international arena to protect and regain US jobs.

Evans and Bodman don't have much better credentials when it comes to global finance, but their department is in charge of trade, and so they got into the act. Bodman, when asked on September 24 whether the preceding weekend's G7 statement was directed at both China and Japan, replied, "The answer is yes." By that time, the dollar had already dropped by 5 yen against the Japanese currency, the Nikkei 225 stock average was down 6 percent on worries that a higher yen would hit exporters, and the European and US equity markets were down as well on concern that a weak-dollar policy had been adopted by the US and could abort global economic recovery. And John Snow, the railroad man? He got a bit scared that he had unleashed something he couldn't control and - unconvincingly - reiterated the US strong-dollar policy. But the damage had been done. Only China didn't budge. The People's Daily in a front-page editorial had written on September 2 when Snow arrived in Beijing that China's currency policy would not be determined by US electoral policy, and it has stuck with that line.

Japan belatedly has also reaffirmed that it will prevent further rapid yen appreciation through currency-market interventions as necessary, and several such interventions were carried out last week. On that, global financial markets have calmed and equity markets have rallied. But the dangers inherent in the Rove initiative aren't over, and Don Evans goes to Beijing this month to keep on pushing for a "level playing field". China will likely be told that it has the choice between punitive tariffs imposed on its exports to the US or currency regime change. Continuing outright Chinese resistance won't be easy. The yen is already much higher and, along with it, most other Asian currencies have risen against the dollar, as the yen is a significant component in the basket of currencies that determines their valuation. They all now have to worry about losing export competitiveness to China and become de facto US allies in this game.

How will this play out? Iraq's alleged weapons of mass destruction led to all-out war. Asia's alleged currency weapons of US job destruction, with any luck, will not. While in a currency war the Bush administration would enjoy the support of the Democrats, it has already run into a wall of opposition on Wall Street. Former Bill Clinton treasury secretary Robert Rubin, now speaking in the capacity of top Wall Street banker, has castigated it. The Wall Street Journal has written among its nastiest-ever editorials in opposition.

It doesn't mean the war has definitively been prevented. But were it to go off, I have a straightforward prediction: The very thing that was supposed to save Bush's electoral prospects would badly backfire, would endanger global and US economic expansion and would - more surely than any Iraq war fallout - sink Bush.


syr :p

09.10.2003, 08:38
USD/CHF 1.305.-, Yen/USD 109.05, Euro 118.40, USD-Cash 91.45$.......

The coming currency devaluation

Clif Droke
Oct 9, 2003

After repeated warnings from currency analysts and market advisors (including yours truly) that the U.S. currency system is on the verge of becoming a blocked, two-tier system we now have confirmation that the country is one step closer to realizing this. When fully implemented, the new U.S. dollar will mean a "banana republic" type currency and across-the-board devaluation.

According to a CNN/Money news wire report of Oct. 7, the new U.S. $20 bills will be released this week at banks across the country. Meanwhile, the Fed and its Bureau of Engraving and Printing (BEP) will hold a nationwide series of publicity events as part of a $33 million campaign to let the world know of the new bills and to acclimate the public to their strange new appearance.

The new $20s are peach-toned with the presence of blue ink, making it the first time in almost 100 years that a mass-circulation U.S. note has prominently contained a color besides green and black. They also contain an embedded vertical plastic strip and color-shifting ink, whose appearance changes from copper to green as the bill is tilted against the light. Below is what the front of the new $20 bill looks like (from the BEP website).


So what is the significance of this change of color in the U.S. $20 note? Well according to the Feds it is designed as a deterrent to stop counterfeiters. But accordingly to currency analyst Lawrence Patterson, who authored the 1994 monograph titled "Currency Recall," which accurately forecast the new multi-colored notes, the new colored money is part of a two-tiered currency system that will have drastic implications for investors and non-investors alike here in the U.S.

Patterson calls the new notes "crayola currency" and claims they will circulate domestically while the normal green currency that we've grown accustomed to will circulate offshore all over the globe. According to commentator Terry Savage, "Two-thirds of the U.S. paper currency is circulating in foreign countries." With the coming two-tiered currency system, foreigners will continue to be allowed to use the greenback while U.S. citizens will be stuck with the "crayola currency" which cannot be exchanged.

Patterson forecasts the coming use of foreign exchange controls for the U.S. dollar domestically, which would prohibit Americans from transferring capital to any other world currency. Again, this is discussed in Patterson's now-classic monograph "Currency Recall" (which I've read and highly recommend to students of currency policy and investors seeking to retain the value of their investments). Buy from Amazon.

Patterson states, "I want every one... to think carefully about this... because we are coming very, very close to the end of the freely convertible domestic dollar. The cut in value could be as much as 50%... I believe those holding gold bullion bars offshore and bullion coins domestically will be very surprised to find that special regulations will prohibit them from profiting."

He further maintains that coin dealers are under a strict Treasury regulation and must report your sales of some coins but not others. The rule is as follows: Coins with a premium above 15% do not have to be reported. In addition to the 1099 report, filed by the coin dealer, you have to declare any capital gains as well."

He continues, "The existence of this rule, I believe, indicates an intent to outlaw the ownership of bullion coins altogether! However, the rule will not remain at 15% necessarily and could be changed to a higher percentage, which is unknown at this time. Obviously, you do not want to own any investment coins with a premium of 15% or less and better stay at the 25% or 30% level to be safe." Patterson points out that complications for the government would clearly arise should numismatic collectibles be forcibly confiscated since the bullion coins' value can be determined by the London gold fix, but not so for collectibles. "The price of the collectible coin may or may not be easily determined as numismatic valuables are routinely auctioned off at prices of not only tens of thousands of dollars, but hundreds of thousands of dollars per item," he observes. "It is difficult to imagine just how this would all be sorted out by the bureaucracy to come up with a calculation of compensation that would relate to the market value." He advises staying in the "safe zone" and exchanging bullion coins not needed for emergencies (such as food or gasoline shortages, et al) for numismatic coins with higher premiums.

Obviously, the introduction of the new peach-colored $20 bill is a test on the American public to see how they respond to the drastic new changes. The CNN/Money article states that the BEP has launched a multi-million dollar promotional campaign aimed at gaining public acceptance of the new currency. For example, the twenties are being featured on game shows, including "Wheel of Fortune" and "Jeopardy," sporting events, like ESPN's college football telecasts. The bills are also part of some consumer product tie-ins, according to CNN/Money, and pictures of the bills will be on the side of bags of Pepperidge Farm Goldfish. If the government succeeds in getting the American public to accept the bills, the other remaining denominations will obviously follow and plans will proceed for the blocked domestic dollar.

--Clif Droke
Oct 9, 2003

Quelle (http://www.321gold.com/editorials/droke/droke100903_currency.html)

syr :sss

09.10.2003, 12:19
Kleine, feine Meldung mit Auswirkungen........


syr :cool:

10.10.2003, 10:04
Putin's idea to price oil in euros may hurt dollar
By Carola Hoyos and Christopher Swann in London and Andrew Jack,in Moscow
Published: October 10 2003 5:

After weeks of being battered on the foreign exchanges, the dollar yesterday faced a new indignity.

Vladimir Putin, Russia's president, floated the idea of pricing his country's oil in euros - a gesture towards Europe that could further drive down the value of the dollar and would have significant consequences in the oil and currency markets. "We do not rule out that it is possible. That would be interesting for our European partners," he said after a summit with Gerhard Schröder, Germany's chancellor. A German government official later told Reuters that the switch to the euro was "taking on increasing significance".

The US and European Union are competing for initiatives over energy co-operation in Russia as they try to diversify supplies away from the Middle East and build stronger economic links with the nation, the world's second largest oil producer and its largest holder of natural gas reserves.

Michael Lewis, head of commodity research at Deutsche Bank and a former currency strategist, said the shift would be a further boost to the euro. If Russian oil exports, which average about 5.7m barrels a day, were denominated in euros it would create demand for an additional Euro 144m ($171m) every day at current prices.

This is not the first time such a move has been suggested. Saddam Hussein, Iraq's president, switched to euros as a political slight against the US.

In the 1980s, when the dollar was weak, some Middle East producers considered pricing the oil they sold to Asia in yen. The idea was prompted by the weakness of the dollar at the time.

A rise in the oil price has traditionally been positive for the greenback - partly because buyers of oil need to acquire dollars. Oil exporters have historically shown a marked preference for buying dollar assets with their oil revenues.

"If Russia makes this move, it will be a reorientation of its economy towards Europe and this would add to upward pressure on the euro," said Mr Lewis. "We talked about Iraq making the shift to euros [under Mr Hussein] but in the medium term a Russian move would be more significant."

Culturally, a Russian switch would be a significant shift.

But Paul Horsnell, analyst at Barclays, pointed out: "There have been times in the past when the oil market has comfortably traded in lots and lots of currencies. Dollar denominated oil is very much a post second world war phenomenon."

Russian oil is becoming increasingly important in Europe as the North Sea fields begin to mature. One Russian oligarch has even talked about a future in which the European benchmark crude oil becomes Russian Urals rather than North Sea Brent


syr :rolleyes:

12.10.2003, 18:21


14.10.2003, 14:14
Don't Look Down

A third world country with America's recent numbers would definitely be on the economic crisis watch list.


During the 1990's I spent much of my time focusing on economic crises around the world - in particular, on currency crises like those that struck Southeast Asia in 1997 and Argentina in 2001. The timing of such crises is hard to predict. But there are warning signs, like big trade and budget deficits and rising debt burdens.
And there's one thing I can't help noticing: a third world country with America's recent numbers - its huge budget and trade deficits, its growing reliance on short-term borrowing from the rest of the world - would definitely be on the watch list.

I'm not the only one thinking that. Lehman Brothers has a mathematical model known as Damocles that it calls "an early warning system to identify the likelihood of countries entering into financial crises." Developing nations are looking pretty safe these days. But applying the same model to some advanced countries "would set Damocles' alarm bells ringing." Lehman's press release adds, "Most conspicuous of these threats is the United States."

O.K., let's run through some reassuring counterarguments.

First, economists are very good at devising models that would have predicted past crises, but each new crisis tends to happen where and when they didn't expect it. So even though our budget deficit is bigger relative to the economy than Argentina's in 2000, and our trade deficit is bigger relative to the economy than Indonesia's in 1996, our experience needn't be the same.

Second, nasty crises in third world countries have a lot to do with the fact that their debt is in foreign currency, usually dollars. As a result, when the peso or the rupiah plunges, debts explode while assets don't, and balance sheets collapse. By contrast, thanks to the special international role of the dollar, America's burgeoning foreign debt is in our own currency.

Finally, financial markets are generally willing to give advanced countries the benefit of the doubt. Even when an advanced country seems to be deep in a financial hole, lenders usually assume that it will somehow find the resources and political will to climb back out.

So is America safe, despite its scary numbers?

Third world countries typically suffer from institutional weaknesses. They have poor corporate governance: you can't trust business accounting, and insiders often enrich themselves at stockholders' expense. Meanwhile, cronyism is rampant, with close personal and financial links between powerful politicians and the very companies that benefit from public largesse. Luckily, in America we don't have any of these weaknesses. Oh, wait. . . . (Isn't that all history? No. According to The Wall Street Journal, we are again hearing warnings that "optimism is based on massaged earnings.")

Still, there's no question that the U.S. has the resources to climb out of its financial hole. The question is whether it has the political will.

There is now a huge structural gap - that is, a gap that won't go away even if the economy recovers - between U.S. spending and revenue. For the time being, borrowing can fill that gap. But eventually there must be either a large tax increase or major cuts in popular programs. If our political system can't bring itself to choose one alternative or the other - and so far the commander in chief refuses even to admit that we have a problem - we will eventually face a nasty financial crisis.

The crisis won't come immediately. For a few years, America will still be able to borrow freely, simply because lenders assume that things will somehow work out.

But at a certain point we'll have a Wile E. Coyote moment. For those not familiar with the Road Runner cartoons, Mr. Coyote had a habit of running off cliffs and taking several steps on thin air before noticing that there was nothing underneath his feet. Only then would he plunge.

What will that plunge look like? It will certainly involve a sharp fall in the dollar and a sharp rise in interest rates. In the worst-case scenario, the government's access to borrowing will be cut off, creating a cash crisis that throws the nation into chaos.

I know: it all sounds unbelievable. But would you have believed, three years ago, that the U.S. budget would plunge so quickly from a record surplus to a record deficit? And would you have believed that, confronted with that plunge, our leaders would offer excuses rather than solutions?


Aus der New York Times vom Spiegel übernommen :rolleyes:


14.10.2003, 21:40
Tuesday, October 14, 2003

ECB: Pricing Oil in Euros Sensible

European Central Bank President Wim Duisenberg said Monday that it might make sense for Russia to sell oil in euros to certain EU customers, entering a debate sparked last week that has big implications for currency markets.

Asked to comment on remarks by President Vladimir Putin that he did not rule out switching Russia's oil pricing from dollars to euros, Duisenberg said this could particularly suit the nations currently lining up to join the common currency bloc.

"It would be in their interest to pay for imports in their future domestic currencies," he told reporters in Moscow.

"We are worried about the situation in countries that depend on imports of oil from Russia," Interfax quoted him as saying. The agency also cited him as saying, however, that if Russia made a move to the euro it would be a unilateral decision.

Russia is the world's second-largest exporter of oil after Saudi Arabia and the world's top gas exporter. A switch would be a powerful symbolic victory for the euro and might accelerate its growing role as an international reserve currency to challenge the dominance of the dollar.

Analysts say such a move could prompt other oil exporters mulling a switch to follow Russia's lead. Iran, the world's No. 5 exporter, is openly considering a move to the euro and there is growing debate in Saudi Arabia on the issue. A move by oil exporters to the euro could spark massive inflation in the United States, economists say.

European leaders have campaigned since the single currency's 1999 launch for more of the world's most traded commodity to be priced in euros. Putin made his remarks on Thursday, during an official visit by German Chancellor Gerhard SchrÚder.

In a report on Friday, Britain's Daily Telegraph took the talk prompted by Putin's statement further, saying SchrÚder had actually "secured" an agreement with Putin on making the switch. But a spokesman for the German government, when contacted by telephone, said he was unaware that such a deal had been reached.

Europeans want more central banks to hold euros as a permanent investment because this would create massive demand for assets like European government bonds, underpinning lower long-term interest rates and investment.

But economists warn that it would also press the euro higher against the dollar and make exports more expensive on world markets, potentially thwarting the bloc's economic recovery.

(MT, Reuters)




16.10.2003, 13:29
In Japan, Bush Faces Tough Sell on Dollar


Published: October 15, 2003

OKYO, Oct. 14 - Few political events in Japan generate as much attention as a visit from the president of the United States, and George W. Bush's two-day stay here starting on Friday should prove no exception.

President Bush's primary goal will be to clarify Japan's commitment to sending troops and money to Iraq. Facing an election year in 2004, a growing chorus of angry American manufacturers and a growing trade deficit, President Bush may also put pressure on Japan to stop propping up the dollar by deliberately weakening the yen.

Unfortunately for American exporters, Mr. Bush is unlikely to win any tug of war over exchange rates with Japan.

Despite increasingly loud protests in the United States and Europe, Japanese authorities have been buying dollars to prevent the yen from strengthening too quickly. Nonetheless, the Japanese currency has risen more than 9 percent against the dollar since August, when fresh figures showed that the economy grew at a surprisingly strong 3.9 percent annual rate in the second quarter.

Yet Japan's recovery, like others in the past, is highly dependent on exports. A stronger yen makes Japanese goods more expensive overseas and cuts the profits exporters earn in dollars.

American presidents, at least since Richard M. Nixon, have criticized Japan for relying too much on a weak currency and exports for growth. Several times, as when Mr. Nixon took the dollar off the gold standard, American presidents have succeeded in persuading Japan to let the yen rise. But on the whole, policy makers here have stuck to their decades-old strategy, even though a stronger yen may actually help Japan's economy in the long run.

"The psychological impact of foreign exchange rates is much bigger in Japan than in other countries, because in former days, we were much more dependent on exports," said Kosuke Nakahira, vice chairman of the Institute for International Economic Studies and vice minister for international affairs during the mid-1990's, when the yen rose to record highs.

"It's partly an outdated psychology, but a very large amount of trade is done in U.S. dollars, so naturally Japanese exporters think of exchange rates much more than in the U.S."

Prime Minister Junichiro Koizumi has other reasons for shrugging off pressure from President Bush. His ruling Liberal Democratic Party faces national elections on Nov. 9, and a steep rise in the yen will set off alarm bells with voters. Foreign investors, who have been the biggest buyers of Japanese stocks this year, may also be scared off if a strong yen hurts growth.

Mr. Koizumi has also pledged to end deflation in Japan by 2005. A stronger yen, though, may help deflation by bringing down the cost of imported products.

Some analysts even suggest that Mr. Koizumi is politically shrewd for trying to weaken the yen now - Japan has spent a record 13 trillion yen ($119 billion) buying dollars this year - rather than in 2004, when Mr. Bush will have to face voters on the campaign trail. If Japan's strategy succeeds and a broader economic recovery takes hold, then Mr. Koizumi will be able to back off on exchange rates next year, giving Mr. Bush some political breathing room.

Political survival aside, if Mr. Koizumi were to permit the yen to rise and the dollar to fall, this would do little to relieve the huge trade and budget deficits of the United States. Japan could import more American products, of course, but that would not halt the flood of cheap exports China is sending to the United States. Nor would it persuade America to import less oil from the Middle East. The fiscal deficit in the United States - created in part by Mr. Bush's tax cuts - is out of Mr. Koizumi's reach.

But these factors should not let Japan off the hook, some economists say. Japan has for too long relied on exports to drive the economy rather than promoting consumer spending through deregulation, they say. An export-driven economy is fine for developing nations, they assert, but inappropriate for a mature, industrialized economy like Japan's. Japanese consumers would benefit from a stronger yen because imported goods would become cheaper.

"The government always worries about producers, not consumers, even though Japan is now a major economy," said Akio Mikuni, a credit analyst and author of "Japan's Policy Trap: Dollars, Deflation and the Crisis of Japanese Finance" (Brookings Institution, 2002). "Japan's defense of a weak yen is like a kid who always makes excuses even though he has become an adult."

By continually buying dollars to weaken the yen, the Japanese - along with the Chinese and other exporting nations in Asia - are even diminishing the power of United States monetary policy, some say. The Federal Reserve has been expanding the money supply to jump-start the economy and stave off deflation. But each time it does, Japan, China and other countries buy the dollars and park them in the bank rather than letting them nourish the American economy.

"A weaker yen is quite damaging to the U.S. economy," said Peter Morici, a professor of business at the University of Maryland and a former chief economist at the International Trade Commission in Washington. "Bringing down the trade deficit makes all the difference between a jobless recovery and a full recovery."

But for all the theater surrounding foreign exchange rates, political reality, not economic logic, will probably dominate Mr. Bush's meetings in Japan. Mr. Koizumi has been a faithful ally of America during his two and a half year tenure, and Mr. Bush is eager to win support for his plan to rebuild Iraq. To that end, Mr. Bush will not want to make waves for Mr. Koizumi, at least until after his party is returned to power next month.

"Bush won't pressure Japan directly because they have to cooperate," said Hideki Naito, a foreign exchange analyst at MMS International in Tokyo. "There are elections in Japan and Bush wants to keep Koizumi in power."


syr :rolleyes:

20.10.2003, 12:09
Bush hat wenig bis gar nix erreicht :hihi........


Alles nur ein Missverständnis?

US-Finanzminister John Snow schickt den Euro auf Berg- und Talfahrt mit seiner Äußerung, die USA hätten kein Interesse an einem schwachen Dollar. Devisenhändler sehen den Greenback jedoch weiter unter Druck.

Frankfurt am Main - Nach einem kräftigen Absturz als Reaktion auf Äußerungen von US-Finanzminister John Snow hat sich der Euro am Montagvormittag wieder erholt. Nach Einschätzung von Händlern peilt die Gemeinschaftswährung mittelfristig sogar weitere Kursgewinne zum Dollar an.

Snow sagte der britischen Zeitung "The Times", die USA hätten niemals die Absicht gehabt, den Dollar-Kurs nach unten zu reden. Snow sagte, die US-Politik sei von vielen Kommentatoren missverstanden worden. Diese Worte wurden an den Finanzmärkten nach Einschätzung von Devisenhändlern zunächst als Startschuss für Dollarkäufe gesehen. Im weiteren Handelsverlauf wurde die US-Währung wieder verkauft.

Am Vormittag notierte der Euro (Chart) mit 1,1679 Dollar nach einem Tagestief von 1,1606 Dollar nach den Äußerungen des US-Finanzministers. Zuvor hatte die Gemeinschaftswährung mit 1,1713 Dollar notiert nach 1,1675 Dollar am Freitagabend in New York.

"Die Worte Snows sind aus guten Gründen nicht honoriert worden", sagte ein Händler angesichts der Kurzlebigkeit der Dollar-Gewinne zum Euro. "Weiterhin belastet den Dollar das Doppeldefizit der USA. Gleichzeitig sorgen neue Terroraufrufe für Nervosität. Im Irak sind nach dem Kriegsende mehr US-Soldaten ums Leben gekommen als während des Krieges selbst." In den USA weisen sowohl die Haushalts- als auch die Leistungsbilanz hohe Defizite aus. Dieser Umstand wird an den Finanzmärkten als Doppeldefizit bezeichnet. Der moslemische Extremist Osama bin Laden hatte am Wochenende auf zwei ihm zugeschriebenen Tonbändern neue Selbstmordattentate inner- und außerhalb der USA angekündigt.

Devisenhändler rechnen mittelfristig mit weiteren Kursgewinnen der europäischen Währung zur US-Valuta. "Wir haben die Marke von 1,17 Dollar am Montag bereits einmal überschritten, ich denke, wir werden das im Laufe des Tages noch einmal sehen", sagte ein Marktteilnehmer. "Die Korrekturphase des Euro ist vorbei. Wenn die Währung wieder über 1,1750 Dollar steigt, dann kann sie wieder Anlauf auf 1,18 und 1,19 Dollar nehmen."


Snow ---> :schaf:


21.10.2003, 18:43
Rubin criticizes budget deficits

By Jon Friedman, CBS.MarketWatch.com
Last Update: 12:35 PM ET Oct. 21, 2003

RANCHO MIRAGE, Calif. (CBS.MW) -- Former Treasury Secretary Robert Rubin criticized the administration's record budget deficits on Tuesday and urged American magazine editors and publishers to work hard to explain the significance of economic issues.

Rubin, who is currently a director of Citigroup (C: news, chart, profile) and the chairman of its executive committee, called the budget deficit "a serious threat to economic well-being" and said that the "never-ending deficits" will continue to hurt the financial markets and investors.

Rubin urged the 500 attendees of the American Magazine Conference near Palm Springs, Calif., to accept the challenge of conveying the importance of such difficult issues as budget deficits and trade to their readers, who might prefer not to confront these problems.

"You in the magazine industry can have a major impact," Rubin said.

Rubin is the author of a forthcoming book called "In An Uncertain World," which will be published next month.

Rubin is also a veteran of Wall Street. He was the co-chief executive officer of Goldman Sachs (GS: news, chart, profile) in the 1990s before moving on to the Clinton administration. He was treasury secretary from 1995 to 1999, during a period of strong economic growth.

Rubin has long argued that fiscal discipline in Washington laid the groundwork for the strong economy of the late 1990s by adding to national savings and keeping interest rates low, a view that some have derided as "Rubinomics."

Rubin also stressed that the trade issue would be "widely discussed" by candidates for the presidency in 2004. He said these issues will have "effects on consumer confidence" and are important as the campaigns progress.

Jon Friedman is media editor for CBS.MarketWatch.com in New York


syr :cool:

22.10.2003, 17:38
22.10. 16:46

Forex: Unbeeindruckt von Snow

(©GodmodeTrader - http://www.godmode-trader.de)

US-Finanzminister John Snow hat heute bei einer kurzen Ansprache zur Wirtschaftssituation erneut die "Politik des starken Dollar" bestätigt :hihi. Die Händler zeigen sich zuletzt unbeeindruck - der Euro steigt zum Dollar um 1% auf $1.1783, während der Dollar gegenüber dem Yen um 0.43% auf 109.01 Yen verliert.

Der Euro steigt, nachdem der neu ins Amt gewählte Präsident der Europäischen Zentralbank sagte, dass das Niedrigzinsniveau im Euroraum zu einem stärkeren Wachstum führen wird, als dies bisher erwartet werde.

US-Finanzminister John Snow wird heute um 18:00 Uhr MEZ vor dem Commercial Club in Chicago eine Rede halten.

Snow ---> :schaf:


30.10.2003, 12:59
SNOW-Day :schaf:........

U.S. walks to cliff edge with China
But markets still expect Treasury to take step back

By Greg Robb, CBS.MarketWatch.com
Last Update: 2:32 PM ET Oct. 29, 2003

WASHINGTON (CBS.MW) - The Bush administration's rhetoric about the need for China to open its markets and float its currency has heated up in recent days, walking the two countries closer to a confrontation about trade.

Commerce Secretary Donald Evans told Beijing's leadership that U.S. patience with its bilateral trade deficit with China was "wearing thin."

But despite this posturing, market analysts still don't expect the Treasury Department to take the next step and formally cite China for manipulating its currency.

On Thursday, Treasury Secretary John Snow must come before Congress and present a report on international exchange rate policy. The department will release the report at 10:00 AM.

Snow will be under intense political pressure from congressional members of both parties to say that China is manipulating its currency to gain unfair competitive advantage in international trade.

Snow is under countervailing pressure by traders in the $3 trillion foreign exchange markets who would be profoundly unsettled by any escalation in the tension between the U.S. and China.

"It is going to be a spectacle," said David Gilmore, economist and partner at Foreign Exchange Analytics.

"Snow's comments and his report on currency market manipulation are important for the foreign exchange market because huge sums of money are being wagered on the yen and Chinese and East Asian currencies in general. This will help clarify what the next step will be -- if indeed they are accused of currency market manipulation," said Marc Chandler, chief currency strategist at HSBC.

A month ago, the Group of Seven industrialized nations responded to U.S. prodding and made a veiled suggestion that China back away from its set rate of 8.3 yuan to the dollar. The summit of finance ministers also was critical of Japan's foreign-exchange intervention to keep the yen low as a way to boost exports. See full story.

That followed a direct visit by Snow to Beijing, where his talk about the yuan met yawns.

Report began in '88

Mandated by a Democratic-controlled Congress in 1988, the foreign exchange report was designed to give the Treasury secretary the authority to accuse any major U.S. trading partners of currency manipulation. Treasury is required to start talks with any country cited for manipulation. There is no formal process spelled out if the talks do not go well.

During the first few years, the Treasury used its new authority to cite South Korea, China and Taiwan for currency manipulation. China was the last country cited, before it adopted its dollar peg -- the current source of controversy.

After the Republicans took control of the Senate in 1995, the report became less of a priority, drew less and less attention, and finally disappeared from sight altogether.

Members of Congress, who are convinced that China's dollar peg is behind the exploding bilateral trade deficit and is hurting the manufacturing sector, have dragged the report back to center stage.

Last year, the U.S. trade imbalance with China was a record $103 billion and is growing at over a 20 percent pace this year.

Members representing manufacturers and unions want President Bush to use the report as the first step toward forcing China to end its dollar peg.

Bush and his top economic advisers agree that China should revalue its currency.

In his Labor Day address this year, Bush told factory workers that unfair trade practices were to blame for lost jobs. Administration officials said he was referring to China.

This has raised some expectations from some observers that administration is ready to cite China in the report.

Treasury "can't come out and say nothing because it would seem to be contradicting what they have said publicly" about China's need to float its currency, said one foreign exchange analyst. He said there was an intense debate at Treasury on how to handle the report.

On the other hand, citing China would add fuel to those who want to take strong action against China.

More than 60 members of the House have signed on to legislation that would impose tariffs on Chinese products to counteract the perceived currency advantage.

Sen. Charles Schumer, D-N.Y., has introduced a bill to impose a 27.5 percent tariff on Chinese imports unless the yuan is floated.

"The danger that the administration has: if they find them guilty of manipulation, won't the calls for protectionism, won't the decibels of those calls go higher?" Chandler of HSBC asked.

"You don't want to antagonize the manufacturers but at the same time you don't want to fan the flames of protectionism, either," Chandler said.

The Bush administration "has left the impression that China's currency is the cause of the ills of our industrial sector," said Robert Hormats, vice chairman of Goldman Sachs International.

"They have backed themselves into a corner," Hormats said. "I don't know what they can say. They've been put in a very tough spot."

"They've bought in to the complaints of Congress about China, and to a lesser extent Japan, so they kind of need to deliver something," Gilmore said.

Many economists view the debate over China's currency as more political than substantive. They note that China only has a small global trade surplus, despite its large surplus with the U.S.

Some economists believe that floating the yuan would lead the currency to fall rather than strengthen.

"When you listen to Bush and different Treasury officials talk, they have a very clear political message. But in terms of the economics underlying it -- there is far more nuance and there is much more debate on it. So the currency report is going to have to grapple with all this," said Alex Kazan, senior currency analyst at G7 Group.

Low expectations

Most foreign exchange experts do not think the Bush administration will formally cite China in the report.

"Manipulation is a very strong word. A country can intervene and not be manipulating the foreign exchange market," said Marc Chandler, chief currency strategist at HSBC.

"I don't think the Chinese are actually intervening in the foreign exchange market. They force their exporters to sell dollars back to the central bank. The central bank uses those dollars to buy Treasurys. Is that manipulation of the foreign exchange market, or is that what a peg is?" Chandler said.

"I don't think we're going to see China, much less Japan, listed as violators of fair and reasonable exchange rate regimes," agreed Gilmore of FXA.

Chandler said that if the Treasury decided to cite China for manipulation, the foreign exchange market would be concerned that China would limit its purchases of U.S. Treasury securities, potentially raising U.S. interest rates.

The chief task of the Treasury secretary will be to avoid roiling the foreign exchange markets, Gilmore said.

Snow will "look at the screens and find out where prices are before the testimony and go back and look at the screens and find out where they are after and, hopefully there is no change."


syr :sss

31.10.2003, 10:50
4:40am 10/31/03
China to allow more overseas investment in yuan move By Allen Wan

TOKYO (CBS.MW) -- China will allow businesses in 14 provinces or regions to invest more money overseas in a bid to alleviate pressure on the yuan, according to a government Web site. "Provincial foreign exchange administrations can approve proposals for foreign exchange capital of overseas investment projects with a limit of $3.0 million," said The State Administration of Foreign Exchange. Previously, the limit had been $1 million. Beijing has recently taken several measures such as cuts in export subsidies to alleviate pressure on the yuan, which has been fixed to the dollar for the past decade. Hot money has been flooding into China on expectations that the government will eventually allow its currency to appreciate under pressure from the United States and other trading partners. The move comes a day after the U.S. Treasury criticized China's policy of pegging its currency to the dollar, but angered Congress by stopping short of issuing a formal finding that the Chinese government manipulated the exchange value of the yuan. The Chinese government is worried that heavy fund inflows could further boost the money supply and stoke inflation at a time when the economy is growing rapidly.

syr :rolleyes:

15.11.2003, 09:01
The US Dollar Bear 2

November 14, 2003

With the latest reported record-high US trade deficit, a whopping $41b+ in September alone, the US dollar is once again back in the limelight. At this enormous trade deficit's current run rate, it will push an astounding $500b by the end of 2003, utterly crushing last year's record of $418b during all of 2002!

Naturally the insatiable American demand for imported goods and even services dramatically impacts the global supply and demand dynamics of the US dollar. We Americans pay for our imported goods in dollars, flooding the world with Federal Reserve paper, which is then sooner or later spent elsewhere by the original exporting countries.

As these exporting countries trade the dollars that American consumers indirectly paid them for other goods and services that these countries need to grow, the total supply of dollars outside the United States continually increases. This helps drive down the price of the US dollar in the massive international currency markets. An increasing global dollar supply against the backdrop of relatively stable global demand leads to lower dollar prices.

While only one factor among many that affect the dollar, the gaping US trade deficit reported this week offers a great opportunity to reexamine the current state of decay of the bear market unfolding in the world's reserve currency.

Back in early April when I wrote the original "The US Dollar Bear," the war-rally euphoria was deafening and Wall Street predicted a strong recovery in the world's most widely used fiat-paper currency. While considered heretical at the time, many contrarians including I were predicting a primary bear market in the US dollar, a milestone which had yet to be officially crossed in April.

>From its early July 2001 top near 121, the venerable US Dollar Index had to fall 20% over a period of one year or more to officially enter bear-market territory. The line in the sand before this No Man's Land of bear-marketdom was drawn at a US Dollar Index level of 96.7. While we were precariously hovering right on the verge of this bear-market abyss in early April, by May the mighty dollar finally cracked below 96.7 on a closing basis and the US dollar bear market was born.

The ultimate implications of this now indisputable US dollar bear, especially for Americans, are probably even more profound and important than even the unfolding Great Bear in the US stock markets. The US dollar is the linchpin that connects together all commerce in the States, and much in the world, from the tiniest transaction between two individuals to the largest deals between multi-national corporations. Changes in the international price of the US dollar ultimately impact the vast majority of world commerce today.

As this week's essay is intended to be an update on the current state of the US dollar bear market, I am going to attempt to limit my discussion primarily to the dollar events of 2003. If you would like more strategic background information on the US dollar bear running back several years, you may wish to skim my original essay on this subject.

Our graphs this week are also updates from this earlier essay as well. While my analytical focus remains on the US dollar action of 2003, we decided to run our graphs back to 2001 in order to help keep this year's fascinating dollar developments in their proper strategic perspective. The dollar's behavior relative to the S&P 500, real interest rates, and gold is quite illuminating and offers tremendous insight for investors.

While not generally widely discussed, the US stock markets and US dollar usually have a strong positive correlation. When the US markets are soaring and euphoria abounds, foreign investors around the world start selling their local currencies and buying dollars in order to invest and speculate in US equities. This increased marginal dollar demand drives up the global dollar price.

Conversely when the US markets are languishing foreign investors typically grow cautious and sell some of their US stock positions and repatriate their capital back into their local currencies, driving down global dollar prices. As such, the US dollar's price on the world markets generally tracks the fortunes of the US stock markets fairly well. This strong relationship is illustrated below with the US Dollar Index superimposed over the flagship US S&P 500 stock index.


In general over the past few years, the US dollar has indeed empathized quite well with US stocks, rallying when the S&P 500 rallies and plunging when the S&P 500 plunges. Prior to the end of Q1 2003, this relationship dominates the chart, and is quite logical for the reasons explained above. But, beginning shortly after Washington's annexation of Iraq in late March, this old US dollar/equity relationship has gone seriously haywire in 2003. The S&P 500 has soared while the US dollar has sputtered!

Early in this year's spectacular war rally, throughout much of Q2, the S&P 500 rocketed higher while the US Dollar Index plunged like a millstone. Somewhat paradoxically, the dollar carved an interim bottom just above 92 in mid-June within days of the initial S&P 500 interim top around 1012 in the war rally in US equities. Then the dollar suddenly reversed and marched relentlessly higher in a strong countertrend rally that carried it all the way back up above its 200-day moving average.

During this countertrend rally the dollar managed to blast up by 7.5% in less than three months, which is really a fast move for the world's most important currency. Interestingly though, while the dollar was rallying last summer the US stock markets essentially just ground sideways, with an unimpressive 3.4% gain in the S&P 500 during the dollar's largest bear-market rally in years.

Then, just as the dollar's bear rally was collapsing in early September, the US stock markets managed to fight heavy valuation headwinds and claw their way back up to fresh new interim highs in recent weeks. The dollar celebrated the good fortunes in equity-land by collapsing down to fresh new-bear-to-date lows around 91 in late October. This odd dollar behavior contrary to the prevailing short-term trends in the US stock markets is quite anomalous and very worthy of consideration.

One potential interpretation of this puzzling data is that foreign investors, for some reason, largely chose not to play this latest bear-market rally in the US stock markets. A falling dollar, like any free-market commodity, reflects relatively lower dollar demand chasing relatively higher dollar supply. Each dollar is worth less in this scenario. If global dollar demand was lower and/or global dollar supply was higher, then foreign investors for the most part were probably not buying dollars to enter the US equity markets, but instead on the net were still selling their US dollars for much of 2003.

It is always challenging trying to assign causes to the effects that we can observe in the markets, but nevertheless contrarian analysis demands that we undertake this very speculative exercise. Why would foreign investors, facing the largest rally in US equities since the Great Bear began a few years ago, apparently remain largely on the sidelines and out of the party?

One potential reason is the US Federal Reserve's current foolish policy of maintaining an openly hostile posture towards savers and investors. Pandering to heavily indebted US consumers, the Fed is systematically destroying the delicate and necessary free-market balance between savers and debtors. Both savers and debtors, like any two parties engaging in a voluntary transaction, should find their transactions to be mutually beneficial.

Savers should earn a fair return on their scarce capital and debtors should pay a fair price for the privilege of using capital that someone else had the discipline and foresight to save. When one side is forced to pay or accept a price way out of whack with what the free markets would set if unmolested, gradually the capital markets freeze up. If capital transactions are not mutually beneficial, the side getting robbed, in this case the savers, gradually decides to quit investing since they cannot earn a fair return on their scarce capital.

Raw capital, or US dollars, is priced in terms of interest rates. If you manage to consume less than you earn and accumulate a surplus of capital, you are rewarded by earning an interest rate for lending your saved money. If you consume more than you earn like the majority of folks these days, you are offered an opportunity to finance your deficit by paying an interest rate to a saver.

As each subsequent month passes by, I am growing more convinced that the horribly biased pro-debt interest-rate policies of the US Fed are contributing heavily to the dollar's persistent weakness even in the face of a mighty rally in US stocks. Foreign investors, or savers, may want to invest in the US, but they are faced with an unattractive choice between chronically overvalued and extremely dangerous stock markets or bond markets sporting trivial yields not worth the risks involved. Foreign investors are being robbed everyday to subsidize American debtors, and the foreigners naturally don't appreciate this.

Indeed, after inflation today any investor owning US Treasury debt maturing in a couple years or less will actually lose capital by purchasing bonds. The rate of inflation, the Fed's relentless debasement of the US dollar, is far higher today than the interest rate that can be earned in the marketplace. Any investor, either American or foreign, is guaranteed to lose real purchasing power today if they buy shorter-term US Treasury debt instruments that mature in the next couple years or so. The Fed has dangerously made investing saved capital an unacceptable no-win proposition for savers.

The nominal interest rate that we can earn in the markets today less the rate of inflation is known as the real interest rate. I have discussed real interest rates in depth in my "Real Rates and Gold" series of essays if you are not familiar with this crucial concept. The high positive correlation between the US Dollar Index and real interest rates, even in 2003, is amazingly powerful and quite revealing.


Only a couple years ago, foreign investors could buy dollars to invest in the US capital markets and earn 1% to 1.5% a year in the bond markets after inflation. 1% or so isn't a lot and is nothing to write home about, but it is something. A positive real return in the stable and safe United States is attractive to a lot of foreign investors. During recent times of relatively high real rates, global demand for US dollars increased and the US Dollar Index price marched higher right along with it.

Once Greenspan and the Fed declared open war on savers though, both real rates of return and the US dollar started to plummet rapidly. Even in 2003, when the US dollar was not correlating well with the stock markets, it did maintain an excellent correlation with real interest rates. This suggests that real rates may indeed be the key to understanding the dollar's accelerating bear market.

When negative real rates were rising, offering some sliver of hope to foreign investors that the Fed would stop trying to rob them to subsidize out-of-control American debtors, the US dollar generally rose as well. Conversely when negative real rates were falling even lower yet, the US dollar's bear trend generally resumed. The fortunes of the US dollar have been closely tied with the real rates of return available in US Treasuries with a one-year maturity.

Until the Fed quits bullying around short-term interest rates in the US and allows them to rise to a fair free-market level where both savers and debtors can engage in mutually-beneficial capital transactions, the US dollar bear will likely continue. The longer that real rates remain negative, the more long-term damage will be done to the US dollar and the longer it will take for foreign investors to ultimately regain confidence in the US financial system.

I doubt that the US dollar bear will even consider ending until real rates in the US go massively positive for as long is as necessary to convince foreign investors that the Greenspan madness is over. It is a big world out there and it makes no sense investing in US dollars in a bear market for negative real returns when other first-world industrial powers are paying 4% to 5% short-term rates to investors for their scarce capital.

Different countries around the world directly compete for investors' hard-earned capital, and the mighty US is no exception. While countries like Australia and England are now actually raising their short-term interest rates in an attempt to rein in their own local speculative bubbles in consumer debt and residential real-estate, the gaping differential between returns available in the US dollar and other major currencies is ballooning rapidly.

As more and more other nations raise rates while the US Fed continues foolishly forcing investors to subsidize debtors, demand for the US dollar will continue to fall along with the dollar's value, prestige, and status in the global marketplace. Positive real rates in the US again, while nowhere in sight now, will probably be among the earliest major signs that the US dollar bear is nearing the end of its long and painful run.

One final note on the dollar and real rates, which I find really intriguing. At the end of Q1 2003 above you can see a huge vertical spike in the light-blue real-rate line. After this massive increase in real rates one would think that foreign investors would have increased their dollar buying based on their past behavior. This time, however, they completely ignored the large real-rate spike and the dollar continued to plunge. Why?

As I have discussed extensively in my past real-rates essays, real interest rates are computed by subtracting the annual change in the US Consumer Price Index from the rate of return on 1-year US Treasury Bills. While T-Bill yields are more or less set in the free-markets, although heavily influenced by Fed manipulation of the short end of the yield curve, the CPI is just a pure government fantasy, political fiction.

Every year Americans' crucial actual costs of living are skyrocketing in reality, but every year the government lies about it and intentionally lowballs the CPI for political and fiscal reasons.

Many enormous Welfare State expenses, like the pensions and benefits the US government uses to bribe voters, are indexed to the CPI. If the CPI can be artificially lowered, then the federal government in Washington can spend less on pensions and more on discretionary pet projects that the politicians love, like waging endless foreign wars and eviscerating American Constitutional freedoms. There is a huge incentive for the US government to lie about the real level of consumer inflation ravaging Americans today.

The entire massive leap in real rates at the end of Q1 on the chart above is due to the US government's own CPI report alone. It is fascinating to me that the dollar did not react to this rise in real rates at all, quite possibly because foreign investors realize that the CPI is just a bunch of smoke and mirrors anyway, pure political hooey. Real-world Treasury yields didn't actually rise, Washington just claimed that inflation had miraculously crashed, so real rates soared. How convenient!

The immense international currency markets, however, were not fooled. They apparently realized that real interest rates in the US could not miraculously change overnight just because some federal lackeys used statistical wizardry to falsely report plunging inflation to please their political masters. It is always wonderful and exciting to see real-world examples of free markets not being swayed by government propaganda and lies!

Since the Greenspan Fed insists on robbing savers to feed out-of-control debtor speculative excesses, the US dollar is doomed to grind lower until this madness ends. As the dollar falls, the primary beneficiary of its bear market is the Ancient Metal of Kings. Gold has always been the ultimate currency, a timeless rare metal with unquestionable intrinsic worth. Gold, which is not merely someone else's hollow promise to pay later like paper currency, rises in value as paper currencies like the US dollar fall.


Not surprisingly the mighty Great Bull market in gold began right around the dollar's long-term top in 2001. Gold's awesome early ascent of the past few years has been scoffed at relentlessly by the mainstream Wall Street crowd, yet us early contrarians are already being blessed with rapidly multiplying riches by riding this exciting young bull market in gold.

Gold is the natural and historical alternative to paper currencies and paper investments when governments choose to foolishly force real rates of return negative and dismantle fair free-market capital transactions between savers and debtors. Why invest in depreciating dollars for a guaranteed loss in purchasing power of at least 1% a year when you can invest in a true currency that has easily weathered six millennia of human history?

This compelling logic is not lost on foreign investors, who are often much less biased against gold than we in America have been trained to be. Gold investment has long been recognized and respected around the world. Most other countries have been ravaged by huge inflations and less-than-peaceful government transitions in modern history, so they rightfully have a much lower trust level in pure paper currency, a government fiction, than us complacent Americans.

Just as the US dollar bear will almost certainly persist as long as US real interest rates remain negative, so will the bull market in gold. This week's exciting challenge of US$400 in gold is just the beginning. Currency and interest-rate trends are massive and tend to run for 5 to 7 years or more, so odds are the Great Gold bull is just getting started.

If you are concerned about the dollar bear market, spiraling inflation, and your rapidly eroding purchasing power, gold is the place to be if you are an American investor. As history has shown, the gains in gold will far outstrip both the depredation of the Fed's inflation and its naked debasement of the US dollar. While a US dollar bear can be devastating for stocks and bonds, gold will shine brightly and remain a refuge and pillar of strength through these turbulent financial times.

At Zeal we have been bearish on the US dollar and bullish on gold for the entire major trends unfolding in these two competing currencies. We have been blessed with great realized gains so far trading gold and silver stocks, but I believe that the best is still yet to come. The greatest years in any gold bull, and the worst years in any dollar bear, are the final years before the end. Since we are still early in both young trends we probably have not yet witnessed the Really Big Moves.

If you want to avoid the carnage from the US dollar bear, and have a shot at earning legendary profits in the Great Bull in gold at the same time, please consider subscribing to our acclaimed Zeal Intelligence newsletter. In this monthly letter I continue to offer real-world strategies, practical insights, and actual trades for avoiding the dollar and equity woes in the US and profiting in the strengthening commodities bull. Join us today!

The average 5 to 7 year lifespan of a US dollar bear means that we are potentially looking at ugly dollar bear conditions until 2007 or so, a lot of time left yet. While the Fed's asinine negative real-rate policy continues to destroy the US dollar and feed the growing gold bull, you may as well profit from this mess, not to mention protect your scarce capital from the accelerating losses in dollar purchasing power.

As King Solomon wisely said millennia ago, "The prudent see danger and take refuge, but the simple keep going and suffer for it."

Adam Hamilton, CPA
November 14, 2003


Und das Ziel "USD-Cashindex 90" aus dem Eröffnungsbeitrag kommt auch noch bis zum ersten Geburtstag des Threads :sss.......


18.11.2003, 17:24
11:10am 11/18/03
Dollar tumbles over political concerns, trade issues

CHICAGO (CBS.MW) -- The U.S. dollar turned sharply lower Tuesday, falling more than 1 percent against the euro in recent dealings amid a host of factors. The euro was recently up 1.2 percent at $1.1886, with significant buying kicking in above the $1.18 level. The Treasury Department reported a fall in foreign demand for U.S. securities, cutting the need for dollars. Also, the Bush administration said it was examining Chinese textiles in response to U.S.-based requests for temporary quotas. That development comes at a sensitive time for U.S. trade over steel tariffs that risk unsettling regular dollar flows tied to trade. Analysts said ongoing flight-to-safety demand for the European currencies as terrorism and war risks pressure U.S. assets was also contributing to the dollar's tumble. The greenback fell 0.5 percent vs. the yen at 108.26 yen. The dollar fell 1.1 percent against the Swiss franc at 1.3087 francs

USD-Cash intradaylow 90.6 :D.......

The Treasury Department reported a fall in foreign demand for U.S. securities, cutting the need for dollars.


18.11.2003, 21:07
Dollar Tumbles as International Investors Buy Fewer U.S. Assets

Nov. 18 (Bloomberg) -- The dollar had its biggest decline against the euro in about a month in New York trading after a government report showed net foreign purchases of U.S. securities in September fell to the lowest in five years.

A drop in the amount of stocks and bonds bought by international investors makes it harder for the U.S. to finance the deficit in its current account, the broadest measure of trade and investment. The Treasury Department said foreigners bought a net $4.19 billion in September, down from $49.9 billion in August and the smallest since $1.17 billion in September 1998.

``It's the hardest evidence yet the U.S. current account deficit has finally become unsustainable and the foreign appetite for U.S. securities has finally fallen short,'' said Michael Woolfolk, a currency strategist at the Bank of New York, the third-largest New York-based bank. There is ``a dependence on increasing inflows just to keep the dollar steady.''

As of 11:36 a.m. in New York, the dollar had weakened to $1.1871 per euro from $1.1749 yesterday. It fell as low as $1.1911, the weakest since June. The dollar's record low is $1.1933 per euro, reached on May 27. It fell to 108.21 yen per dollar compared with 108.92.

The dollar's decline triggered previously set orders to sell the currency at specific levels, such as $1.1810 per euro and $1.1845, according to Chris Melendez, president of Tempest Asset Management, a hedge fund in Irvine, California. The next level is $1.1933, he said.

``We've hit `stops' after `stops,' and the move has accelerated from there,'' Melendez said.

China Policy

Declines also accelerated after the Bush administration said it intends to limit imports of some textiles and apparel from China to stem a record flow of goods from that nation and protect mills in states such as North Carolina. U.S. textile and apparel companies such as Milliken & Co. had said rising imports from China threaten to put U.S. and Caribbean manufacturers.

``Every time the U.S. imposes more trade sanctions, it's a sign the dollar is going to weaken,'' said Kenneth Landon, senior currency strategist, at Deutsche Bank AG in New York. ``At the same time, it's a sign of lower inflows to the country.''

Some U.S. companies and lawmakers blame China's currency policy -- which pegs the yuan at about 8.3 to the dollar -- for the increasing U.S. trade deficit and some of the 2.5 million job losses in the manufacturing sector during President George W. Bush's tenure.

Interest Rates

The dollar remained lower versus the euro and yen after a Labor Department report showed the consumer price index held steady in October after rising 0.3 percent in September. Excluding food and energy costs, the so-called core index rose 0.2 percent after a 0.1 percent increase in the prior month.

Last week, the dollar had its biggest weekly loss in six months after St. Louis Federal Reserve President William Poole signaled inflation isn't accelerating at a pace that would cause the central bank to raise its target interest rate, now at a 45- year low of 1 percent.

Some investors are buying debt of nations with higher interest rates. The benchmark Australian 10-year note, yields 1.66 percentage points more than Treasuries with comparable maturity, up from 1.30 percentage points on Oct. 1. Australia's dollar is up 5.8 percent versus the dollar this quarter, second only to the 6.36 percent gain for the New Zealand dollar among the 17 most widely traded currencies.

``There's no doubt the U.S. economy is rebounding, but the underlying factor impacting the dollar is the record current account deficit and insufficient inflows to finance it,'' said Margaret Browne, a currency analyst at HSBC Bank USA Inc. ``The difference in interest rates is still playing an important part and favoring the euro.''

Deficit, Iraq

In the second quarter, the deficit in the current account held at a record $138.7 billion. The U.S. has had to borrow more money overseas to satisfy demand for imported goods and services to finance investment not covered by U.S. savings.

The dollar fell earlier on speculation fighting in Iraq may intensify, spurring terrorist attacks against the U.S. and its coalition allies. Two U.S. soldiers were killed yesterday in Iraq, a day after a report that al-Qaeda may strike Britain, Italy and Japan. The dollar is down 4.8 percent against the euro since Bush's May 1 announcement that major military operations in Iraq were over.

``The broader issue is how the U.S. is doing in Iraq,'' said Mary Davis, a currency strategist in London at Credit Suisse First Boston. ``If there is further deterioration, the situation will impact on the dollar.''

An audiotape broadcast yesterday on Dubai's Al-Arabiya television containing a message purportedly from Saddam Hussein said U.S.-led forces in Iraq had reached a ``dead end,'' and called for a holy war against the occupation. The U.S. Central Intelligence Agency said it is unable to confirm whether the tape was of the ousted Iraqi leader.

`Real Muscle'

In other trading, the dollar fell against the Swiss franc and the Australian dollar. The U.S. Dollar Index, a measure against a basket of six currencies, fell to 90.73 from 91.61. It's now at the lowest since January 1997. The index has lost more than 10 percent this year. Gold rose.

``Risk aversion is by no means dead, and the support for gold prices reflects that,'' said Naomi Fink, a currency strategist in Tokyo at BNP Paribas SA.

The dollar fell even after U.S. Treasury Secretary John Snow said the U.S. economic expansion has ``real muscle'' and will continue to create jobs in the months ahead. He spoke at a Confederation of British Industry gathering in Birmingham, central-England.

Still, the economy may slow in the fourth quarter after surging at the fast pace in 19 years in the prior quarter, according to economists surveyed by Bloomberg News. The economy may grow 4 percent this quarter, compared with 7.2 percent in the third quarter.


A report from the Federal Reserve yesterday showed manufacturing in New York state expanded at a faster pace in November. An index compiled by the Federal Reserve Bank of New York rose to 41 this month, the highest since the survey began in July 2001.

Still, there are disagreements as to where the dollar is headed. Steven Saywell, a currency strategist at Citigroup Inc. in London says the dollar will strengthen to $1.11 per euro in the `near-term.' Monica Fan, his opposite number at RBC Capital Markets, says it will end the year at $1.17.

``We still think the market is underestimating the potential for the U.S. economy to rebound in the fourth quarter and next year,'' said Saywell in a televised debate between the two strategists on Bloomberg News. ``The growth differential relative to Europe will grow.''

Last Updated: November 18, 2003 11:49 EST

"It's the hardest evidence yet the U.S. current account deficit has finally become unsustainable and the foreign appetite for U.S. securities has finally fallen short,'' said Michael Woolfolk, a currency strategist at the Bank of New York." ;)



19.11.2003, 07:35
DJ Citibank Closes All Long Dollar Positions As Unit Plunges

NEW YORK (Dow Jones)--Citibank, one of the largest traders in global foreign exchange markets and biggest dollar bulls, closed all its existing long dollar positions Tuesday.

The move, on the day the dollar plunged to record lows against the euro, is significant in that the dollar's slide has forced one of the most aggressive dollar bulls in the market to temper its optimism toward the currency.

In a research note, Citibank currency analysts cite three specific reasons: the U.S. decision Tuesday to impose temporary quotas on certain textile imports from China, the dollar's failure to respond to positive U.S. economic data and the breakdown of key technical levels such as dollar index support at 90.56.

Citibank, a unit of Citigroup Inc. (C), retains a bullish outlook for the dollar in the medium term, and will look "for more advantageous entry levels over coming weeks."

But the bank posted 1.5% losses in closing out its long dollar/Swiss position at CHF1.2945, losses of 2% in closing its short euro/dollar position at $1.1940, and losses of 0.7% in closing its long dollar/yen position at Y108.04.

Tuesday, the euro surged to a record high of $1.1960, the dollar fell to a five-month low of CHF1.2931 and dipped below Y108.00, within a whisker of new three-year lows.

-By Jamie McGeever, Dow Jones Newswires; 201 938-2096; amie.mcgeever@dowjones.com

(END) Dow Jones Newswires

11-18-03 1609ET- - 04 09 PM EST 11-18-03

syr :rolleyes:

25.11.2003, 17:35
EUR/USD-Put kurzfristig attraktiv
devisen-trader.de www.optionsscheinecheck.de

Nach Ansicht der Experten vom "Devisen-Trader" könnte ein kurzfristiger Aufbau einer Short-Position (ISIN DE0009541714/ WKN 954171) auf EUR/USD interessant sein.

Die aktuellen Konjunkturdaten entkräften immer mehr die Befürchtungen, dass der Aufschwung in den USA nur durch Sondereffekte ausgelöst sei und nicht zu einer selbsttragenden Konjunkturerholung führe. So habe der Index of Leading Indicators im Oktober um +0,4 Prozent zugelegt und nicht wie erwartet nur um +0,2 Prozent. Zudem sei der Wert des Vormonats von -0,2 Prozent auf 0,0 Prozent nach oben korrigiert worden. Besonders erfreulich dabei: Der Anstieg dieses aus zehn Zeitreihen zusammengesetzten Indikators sei nicht mehr in erster Linie auf die Finanzmarktreihen wie Aktienkurse und Geldmenge, sondern auf die harten wirtschaftlichen Daten wie Arbeitsmarktlage, Auftragseingänge und Baugenehmigungen zurückzuführen.

Zudem sei neben dem von Rekordhoch zu Rekordhoch eilenden Häusermarkt auch die Stimmung in der Industrie nach wie vor gut: So würden der New York Empire State Index mit einem Rekordhoch von 41,0 Punkten sowie der Philly Fed Index mit einem nur leichten Rückgang von 28,0 auf 25,9 Punkte ein gutes Ergebnis beim viel beachteten ISM-Index (Einkaufsmanagerindex) signalisieren. Der werde allerdings erst am 1. Dezember veröffentlicht. Zuvor stünden jedoch insbesondere am kommenden Dienstag in den USA einige Daten zur Veröffentlichung an, die weiteren Aufschluss über die Verfassung der Konjunktur geben würden. Derzeit würden die Märkte allerdings weniger von Konjunkturdaten bewegt, als von der Terrorangst und den Befürchtungen um die strukturellen Defizite in Leistungsbilanz und Staatshaushalt in den USA.

Nachdem Euro/US-Dollar vor wenigen Wochen die Marke von 1,1550 USD nach unten durchbrochen habe, habe vieles für eine Fortsetzung der Abwärtsbewegung gesprochen. Doch der Wechselkurs habe bei 1,1400 USD einen Boden gefunden und sei daraufhin relativ ungebremst bis auf das aktuelle Kursniveau von gut 1,19 USD gestiegen.

Zwei Szenarien für die weitere Kursentwicklung ließen sich nun denken: Zum einen dürfte angesichts der aktuell überkauften Situation erst einmal eine Korrektur anstehen, bei der verschiedene Finanzmarktakteure ihre Short-Positionen in US-Dollar auflösen und Gewinne mitnehmen würden. Sollte dies geschehen sein, dann werde EUR/USD über neue Kräfte für einen weiteren Anstieg auf den Bereich von 1,24 US-Dollar in den nächsten Wochen verfügen. Die erwartete Korrektur dürfte den Wechselkurs bis in den Bereich von 1,17/1,18 US-Dollar zurückführen. Allerdings habe die Verunsicherung an den Märkten bezüglich möglicher weiterer Terroranschläge bislang eine Erholung des US-Dollars verhindert.

Obwohl man diesem Szenario immer noch die größte Wahrscheinlichkeit zubillige, sei die Wahrscheinlichkeit für einen kurzfristigen Anstieg bis über die Marke von 1,20 US-Dollar gestiegen.

Da EUR/USD jedoch spätestens bei 1,21 USD die Puste ausgehen und anschließend eine stärkere Korrektur anstehen dürfte, wollen die Experten vom "Devisen-Trader" in diesem Fall für das Musterdepot eine Short-Position aufbauen. Diese Short-Position wäre aber kurzfristiger Natur, langfristig erwarte man einen weiteren Kursanstieg bei EUR/USD.

27.11.2003, 15:37
Mittwoch, 26. November 2003 | 20:02 Uhr

EUR/USD: Heute Letzte Einstiegschance?

Der Euro konnte heute wieder deutlich zulegen und notiert aktuell klar über der Marke von 1,19 USD. Er blieb damit unbeeindruckt von, auf den ersten Blick sehr positiv ausgefallenen amerikanischen Konjunkturdaten. So konnte zum einen der viel beachtete Chicagoer Einkaufsmanagerindex auf 64,1 Zähler stärker als erwartet zulegen, zum anderen deuten auch die Erstanträge auf Arbeitslosenhilfe auf die lang ersehnte Entspannung am Arbeitsmarkt hin. Einziger Wehrmutstropfen, und auch als einer der Gründe für den Euro Anstieg anführbar, ist sicherlich der Index für Verbraucherstimmung der Universität Michigan, der für einige Anleger mit einem Wert von 93,7 noch nicht positiv genug war. Zudem herrscht trotz der insgesamt positiv ausgefallenen Konjunkturdaten weiterhin große Skepsis gegenüber der US-Wirtschaft. Dies ist verständlich, da durch die momentane starke Konjunkturerholung das Handelsbilanzdefizit weiter steigen und damit den Dollar belasten wird. Zudem wirkt sich auch der Handelskonflikt zwischen den USA und China negativ auf die Stimmung aus.

Wir erwarten für die nächsten Tage einen festen Euro. Ein Vorstoß über das jüngste Allzeithoch über 1,20 würde den EUR kurzfristig weiteren Auftrieb verleihen. Wer auf steigende Kurse setzt sollte daher spätestens jetzt investieren. Wer unseren Empfehlungen der letzten Tage gefolgt ist, kann nach hohen Kursgewinnen durch unsere Short-Investments nun auch eine äußerst positive Kursentwicklung unserer EUR/USD Long Position verzeichnen, die in unserem Devisen-Musterdepot eingebucht ist.

Über die weitere Entwicklung bei EUR/USD und natürlich auch bei vielen weiteren Währungen werden wir Sie wie gewohnt top-aktuell auf dem Laufenden halten und Ihnen bis zu drei mal wöchentlich attraktive Einstiegsmöglichkeiten aufzeigen.

Wir wünschen Ihnen noch eine erfolgreiche Woche

Dr. Detlef Rettinger


:confused: .... Experten halt :schaf:......


28.11.2003, 12:05
5:42am 11/28/03

Euro hits record vs. dollar, pound hits fresh 5-yr high

By Emily Church

LONDON (CBS.MW) -- The euro hit a record high vs. the dollar at $1.1989, and the British pound hit a fresh, 5-year high against the greenback in mid-morning London trade. The dollar was weaker against the Swiss franc as well. Concerns over the burgeoning U.S. current account deficit continue to overshadow figures showing an outperforming U.S. economy. "People are selling dollars across the board; it's a continuation of the trend," said Gary Noone, currency analyst at MMS International in London. "It's frustrating because there has been great economic news coming out of the States, but the dollar is not gaining on it. The markets may have priced in all the good news already." The euro was last up 0.6 percent on to $1.1981. The pound rose to $1.7212 in morning trade, building on a rise to a five-year high of $1.7155 Thursday.

syr :rolleyes:

29.11.2003, 14:41
Lehman Says Dollar `Unattractive' on Low U.S. Rates

Nov. 28 (Bloomberg) -- Lehman Brothers Holdings Inc., the fourth-biggest U.S. securities firm, said the dollar remains ``unattractive'' to investors, partly because the Federal Reserve is keeping interest rates at a 45-year low.

The dollar fell to a record $1.1990 versus the euro today and is down about 12 percent this year against the euro. It also has declined compared with the British pound, Australian dollar and Swiss franc.

The Fed's target rate of 1 percent is half the level of the European Central Bank's benchmark. Central banks in the U.K. and Australia raised rates this month to 3.75 percent and 5.25 percent respectively. Combined with the risk of terrorism and a record current-account deficit, the Fed is deterring some investors from buying American assets, Lehman said.

``By insisting that rates remain at historic lows for some time, the central bank has only added to the doubts about the U.S. recovery,'' Lehman said in its weekly Global Foreign Exchange and Local Market Strategies report.

``If, on the other hand, the Fed begins hinting rates will head higher than we think, it could prove an important turning point for market confidence in the U.S. -- maybe not enough to turn the dollar's trend, but certainly enough to slow it down,'' Lehman said.

The dollar traded at $1.1976 per dollar at 10:17 a.m. in London, headed for its third consecutive week of declines. It's down 3.2 percent in November.

`Grinding Lower'

Demand for the U.S. currency has waned on concern the country won't attract enough capital to counter its record current-account deficit, even as the economy grows at the fastest pace since 1984. The gap widened to a record $138.7 billion in the second quarter. The euro region has a surplus, as does Japan.

``The dollar still should grind lower in the months to come,'' said Peter Clay, a currency strategist in Sydney at ABN Amro Holding NV. ``It's got a huge funding problem.''

In a separate report this week, Merrill Lynch & Co. said it expects the yen to strengthen against the dollar next year more than it previously forecast.

The yen will end 2004 at 90 per dollar, up from an earlier prediction of 98, Merrill said in a note to clients on Wednesday. It was trading at 109.23 per dollar at 10:18 a.m. in London and has risen 8.5 percent against the U.S. currency this year.

Merrill, the world's biggest securities firm by capital, also expects the record U.S. current-account deficit to push the dollar lower against a range of currencies next year including the euro, the pound and the Swiss franc.

Last Updated: November 28, 2003 05:20 EST


syr :rolleyes:

29.11.2003, 14:47
Japan Sold 1.6 Trillion Yen From Oct. 30 to Nov. 26

Nov. 28 (Bloomberg) -- Japan sold its currency in November for a ninth month this year, according to the Ministry of Finance, trying to stem gains that threaten the nation's exports and may slow economic growth.

The Bank of Japan sold 1.6 trillion yen ($14.6 billion) from Oct. 30 to Nov. 26. The amount compares with 2.72 trillion yen of sales the month before. The Ministry of Finance, which released the figures in Tokyo, directs the central bank to buy or sell its currency.

The government has been trying to slow an 8.7 percent gain in the yen in 2003 that erodes company earnings on overseas sales. Rising profits at exporters including Sharp Corp. and Murata Manufacturing Co. are helping the world's second-largest economy recover from its third recession since 1991.

``Japan will probably have to keep selling yen to prevent it from rising,'' said Shigehiro Kamimura, Tokyo-based manager of the trading department at Resona Bank Ltd., the nation's fifth- largest lender. ``The amount isn't that much, and since there has been downward pressure on the dollar, there will be more sales ahead.''

The yen was at 109.20 per dollar at 7:30 p.m. in Tokyo, versus 109.08 late in Toronto yesterday, when the U.S. observed Thanksgiving. Japan's currency sales total a record 17.8 trillion yen for 2003.

Fueling the Economy

Japan's economy grew 0.6 percent in the third quarter, the government said. It was the seventh quarter of growth, the longest streak since 1997. Capital spending and exports accounted for all of the expansion in the $4.6 trillion economy.

A rising yen threatens that growth by sapping profits at exporters and making Japanese products more expensive abroad. Toyota Motor Corp., Japan's biggest carmaker, makes as much as 80 percent of its operating profit in North America.

The Bank of Japan sold a record of 4.46 trillion yen from Aug. 28 to Sept. 26.

It also sold currency last week after the yen strengthened to a three-year high of 107.55 per dollar, according to a trader who deals with the BOJ and asked not to be identified. The sales totaled about 1 trillion yen, Nikkei English News reported on Nov. 19, without saying where it got the information.

``We know the BOJ's been around this month,'' said Shohgo Nagaya, foreign exchange manager in Tokyo at Nomura Trust & Banking Co., a unit of Japan's largest brokerage. ``All they can do is limit the yen's gains.'' Nagaya spoke before the ministry released its figures.

Last Updated: November 28, 2003 05:32 EST



29.11.2003, 22:29
SPIEGEL ONLINE - 28. November 2003, 19:41

URL: http://www.spiegel.de/wirtschaft/0,1518,275948,00.html

Neues Euro-Allzeithoch

Angst vor dem Dollar-Crash grassiert

Erstmals seit seiner Einführung hat der Euro die psychologisch wichtige Marke von 1,20 Dollar übersprungen. Manche Volkswirte warnen, der Dollar könnte noch weitere 30 Prozent seines Wertes verlieren - Gift für die deutsche Exportindustrie.


01.12.2003, 12:58
Original geschrieben von syracus / 29.12.2002 11:03

90 till I die :rofl!

syr :lach

Ich lebe noch :)...... Und es ist soweit :cool::

Last trade 89.95
Change -0.28 (-0.31%)

kommt noch mehr:p.....


02.12.2003, 17:12
Analysen - Geld

Euro (EUR/USD), der Trend ist intakt
Deutsche Bank www.derivatecheck.de

Uwe Wagner, Handelsexperte bei der Deutschen Bank, sieht einen primären wie auch sekundär gültigen Aufwärtstrend im Euro (EUR/USD).

Mit einem Tageshoch bei 1,2040 US-Dollar habe der Euro in der gestrigen frühen zweiten Tageshälfte ein neues Hoch innerhalb seines Trendverlaufes und damit auch ein neues Verlaufshoch seit bestehen der europäischen Gemeinschaftswährung markiert. In den folgenden Stunden hätte der Euro dieses Niveau jedoch weder halten noch ausbauen können, sondern sei in Richtung seines Eröffnungskurses des gestrigen Tages zurückgerutscht. Charttechnisch wäre die aktuelle Gesamtlage nun wie folgt zu beurteilen.

Weiterhin sei ein primärer, sowie sekundärer Aufwärtstrend gültig, der zudem über die Markttechnik bestätigt werde. Unverändert gelte, dass sich oberhalb der 1,2000er Marke im strategischen Zeitfenster auch weiterhin keine sinnvollen potenziellen Widerstandsniveaus herleiten lassen würden. Strategisch würde sich somit die Europawährung bullish präsentieren.

Unter taktischen Gesichtspunkten konzentriert sich der Experte auf die bisher letzte Phase des Kursanstieges (tertiärer Aufwärtsimpuls), ausgehend vom 25. November bei 1,1756 im Tief bis zum gestrigen Hoch bei 1,2040 US-Dollar. Hier falle die gestrige Doji-Bildung mit den Tagesextremen bei 1,1933 bis 1,2040 auf, welche als neutrales Kursmuster auf eine aktuelle Patt-Situation zwischen der Kauf- und Verkaufsseite hinweise. Dies sei umso bedeutender, als diese zeitpunktbezogene und punktuell neutrale Marktverfassung auch unmittelbar am Widerstand um 1,2000 auftrete. Kurzfristig bedeute dies, dass hier mit hoher Wahrscheinlichkeit die taktische Bewegungstendenz der nächsten Tage entschieden werde. Dies bedeute, dass zwischen beiden genannten Extrempunkten der Euro als neutral zu bewerten wäre.

Gelinge die Überwindung der 1,2040 USD, sollte dies als Indiz dafür gewertet werden, dass es erneut zu einer Dominanz der Käuferseite gekommen sei, die auch weiterhin das Zepter in der Hand halten werde. Ein Unterschreiten der 1,1933 USD würde dagegen mit hoher Wahrscheinlichkeit eine Reaktion einleiten, wobei die unten berechneten (neu angepassten) Korrekturpotenziale zum Tragen kommen. Auch hier gelte, solange der Euro sein minimales Korrekturpotenzial, bezogen auf den jüngsten Aufwärtsimpuls nicht nennenswert unterschreite, könne weiterhin eine unverändert hohe Bewegungsdynamik, die auch kurzfristig eine positive Erwartungshaltung für den Euro rechtfertige, unterstellt werden.

Widerstände finde die Gemeinschaftswährung bei 1,2226 und 1,2752 als Orientierungsmarken sowie Unterstützungen bei 1,2000, bei 1,1751 und im Bereich von 1,1547 bis 1,1533. Angepasste Korrekturpotenziale, bezogen auf den jüngsten Aufwärtsimpuls, wären im Bereich 1,1945 bis 1,1931 eine Minimumkorrektur, bei 1,1897 eine Normalkorrektur sowie in der 1,1864 bis 1,1850er Zone eine Maximumkorrektur.

Eine Übersicht zu den aktuellen Terminen und Wirtschaftsdaten finden Sie im Termin-Topic.

03.12.2003, 17:13
:rolleyes: :)


By Alf Field

In June 2002 I published an article entitled "The Coming US Dollar Implosion". At that time the Euro was US$ 0.96 and the US Dollar Index 108. The figures today (3rd Dec 2003) are Euro = US$1.20 and a US Dollar index of just under 90. The Euro has gained 25%. The US Dollar index has declined 17%.

As Winston Churchill might have put it, in regard to the US Dollar : "We have reached the End of the Beginning and are about to enter the Beginning of the End". What has taken place during the past 17 months has been no more than Part I of the US$ implosion. We are set to start Part II.

During the past 17 months the US Dollar has declined moderately against most European currencies, and by even more against the currencies of commodity producers such as South Africa, Australia, Canada, and New Zealand. Elementary economics teaches that when a country's currency depreciates, that country's trade deficit will gradually diminish. Yet, despite a two year slide in the Dollar, there has so far been no decline in the US trade deficit. Why the exception?

The answer lies in the countervailing actions adopted by some of America's Asian trading partners. Those with the largest surpluses, mainly Japan and China, have been intervening in the markets to slow the appreciation of their currencies against the Dollar in an effort to protect their export industries. China, which today enjoys the largest surplus of all America's trading partners, linked its currency directly to the US Dollar. Despite rising opposition from the US Government, China's currency strategy continues unabated.

Before condemning the Chinese, it is important to understand what is happening in their country. The Industrial Revolution in the UK and Europe in the 18th and 19th centuries totally transformed their economies from agricultural dependency to economies reliant on industry and commerce. People moved off the land into the towns. Jobs in the new industries were poorly paid, but they at least provided a living.

China appears to be going through a similar experience. They are enjoying their own Industrial Revolution that is rapidly transforming what was previously an agrarian economy into one witnessing a massive build up in its industrial and commercial infrastructure. China currently has the lowest cost labour force in the world. They are therefore being inundated with an influx of US manufacturers. Some transfer existing operations, lock, stock and barrel. Others have closed down out-of-date facilities back home only to establish brand new plants in China. To this growing pool may be added factories controlled by indigenous Chinese entrepreneurs.

With wages in Asia being a tiny fraction of those paid to workers in western countries, the trend of moving manufacturing and services to Asia – especially to China and India – is bound to accelerate. Adding to America's nightmare is a Chinese cultural and business strategy that places great emphasis on the distant future. This persuades the nation to endure short-term pain in the interests of achieving long-term goals.

What seems to be happening is the following. The Chinese view the US as their main export market, hence the solid link between their own currency and the Dollar. China has been earning massive Dollar surpluses from its trade with the US. They re-invest those surpluses back into US Treasury Bonds. By recycling their dollars back into the system, they play a key role in keeping US interest rates artificially low. This in turn holds America's economic recovery on track.

China must know that it is selling real goods to the USA and being paid in pieces of paper that will ultimately be worth a lot less.

The Chinese understand they will one day have to take a loss on their dollar reserves, but this is the price that they are willing to pay to maintain the existing order. The longer they perpetuate the system, the faster their industrial infrastructure will grow and the greater the number of Chinese finding jobs. A fall in the value of their accumulated foreign reserves is a price they are prepared to pay in the interests of laying a foundation for their country's long-term growth.

China is happy to see the status quo continue. It will only change if the US takes unilateral action when the US tires of losing jobs and services to Asia. The political pressure is certainly building. American voters are becoming increasingly aware jobs are disappearing as factories close. The subcontracting of service work is going to India where there is a culture of speaking English.

A sign that groundswell opposition is having an impact was evidenced by President Bush's recent tour of Asia. He requested Asian countries to allow their currencies to appreciate against the Dollar. Unsurprisingly his appeals went unheard. Back in Washington, the Democrats have been pushing to levy a 27.5% tariff on Chinese goods imported into the US "to protect our jobs".

These are all signs in the wind that this particular trade arrangement is coming to an end. Sooner or later the USA will be forced to take some form of unilateral action to terminate the relationship. The side effects will be extremely damaging. Their action will signal that the game is over. It will also confirm the end of the US Dollar as a reserve currency, triggering Part II of the US Dollar Implosion.

When China understands that the game is over, the time will have arrived for them to dispose of their US Treasury Bonds, effectively switching out of Dollars into something safer like the Euro (the only viable paper reserve asset) – and into gold, which will soon become the reserve asset of choice. In recent years China has steadily been building up the gold component of their country's foreign reserves. This trend will soon accelerate.

It is possible that China may eventually revalue their currency, the Remnimbi. In the meantime, the result of confrontation will be to tip the US, and therefore the world economy, into recession. US interest rates will rise rapidly as the Chinese dump their Treasury Bonds, causing havoc in the US real estate market. The Chinese economy will not be unaffected and may well dip into recession simultaneously. Recently constructed factories in China may fall on hard times. Those that have been financed through debt could go to the wall. Chinese entrepreneurs will pick up these factories for cents in the dollar.

Part II of the Dollar implosion will differ substantially from Part I. If the US-China economic relationship changes or ceases, the effect on commodity prices could be immediate and dramatic. "Commodity" currencies may then no longer look quite as attractive as they do at present. In the face of spreading recession, the prices of most commodities would decline, severely denting the attractiveness of the currencies of commodity producers. This could cause a severe reaction to events of the past two years in which the Australian dollar has risen 50%, from 48c to 72c; the South African Rand that is up almost 100%, from 8c to 15.5c; and the New Zealand dollar that has risen 60%, from 40c to 64c.

The feature of Part II of the US Dollar Implosion will be a recognition that even presently popular commodity currencies are mere paper, ultimately no different to the Dollar itself. There will be an awareness that, unlike the 1930's when competitive currency devaluations were made "by decree"; we are now in an era of competitive currency creation or printing. The country with the fastest growth of currency creation will have a short term trade advantage as their currency depreciates against competitive nations. As investors withdraw from the erstwhile favoured currencies, they will have a problem deciding where to invest their funds. This is when gold will be seen as a viable alternative.

There will therefore be a growing awareness and recognition of the vastly more attractive reserve asset role that gold must and will play in the future. This recognition is the fuel that will fire a rocket under the price of gold, driving it to substantial new highs in terms of ALL currencies.


In past crises, the wealthy have protected themselves buy purchasing gold and gold related assets. Ordinary people, by far the greater number, could rarely afford to buy gold. Being far cheaper, they have previously had to buy silver. This metal became the poor man's choice as an asset to protect their savings. Silver has so far lagged gold in the early stages of this bull market, but that situation seems about to change.

Throughout recorded history the average relationship between silver and gold has been 15oz silver to 1oz gold. The ratio at present is a far higher 75:1 ($400/$5.30). This is massively out of line. If gold were to double to $800 per oz, it would not be unreasonable to expect the silver/gold ratio to decline sharply, possibly as low as 40:1. With gold at $800, this would position silver at $20.

Thus a 100% increase in the price of gold could possibly be accompanied by a simultaneous 400% increase (perhaps more) in the price of silver. This offers significant opportunities both in silver bullion and silver mining shares .

The above graph of the price of silver has been borrowed from an excellent recent article by Dan Norcini entitled "A Technical Look at Silver – Update".

What is quite clear from the graph is that silver's 22-year bear market down trend has come to an end. As Dan Norcini says, a new bull market in silver has been born. It is difficult to argue against this contention and I have no intention of doing so. A silver price above $6.80 would complete a fabulous head-and-shoulders base formation. With this as a foundation, it would be possible to project a very large rise in the price of silver for the future.

Alf Field

3 December 2003

leider ohne Link :(


05.12.2003, 17:56
Ist schon etwas älter, aber fehlt einfach noch. W. Buffet zum USD :sss.....

Why I'm not buying the U.S. dollar

America's growing trade deficit is selling the nation out from under us. Here's a way to fix the problem -- and we need to do it now.
By Warren E. Buffett, FORTUNE
Oct. 26, 2003

I'm about to deliver a warning regarding the U.S. trade deficit and also suggest a remedy for the problem. But first I need to mention two reasons you might want to be skeptical about what I say. To begin, my forecasting record with respect to macroeconomics is far from inspiring. For example, over the past two decades I was excessively fearful of inflation. More to the point at hand, I started way back in 1987 to publicly worry about our mounting trade deficits -- and, as you know, we've not only survived but also thrived. So on the trade front, score at least one "wolf" for me. Nevertheless, I am crying wolf again and this time backing it with Berkshire Hathaway's money. Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in -- and today holds -- several currencies. I won't give you particulars; in fact, it is largely irrelevant which currencies they are. What does matter is the underlying point: To hold other currencies is to believe that the dollar will decline.

Both as an American and as an investor, I actually hope these commitments prove to be a mistake. Any profits Berkshire might make from currency trading would pale against the losses the company and our shareholders, in other aspects of their lives, would incur from a plunging dollar.

But as head of Berkshire Hathaway, I am in charge of investing its money in ways that make sense. And my reason for finally putting my money where my mouth has been so long is that our trade deficit has greatly worsened, to the point that our country's "net worth," so to speak, is now being transferred abroad at an alarming rate.

A perpetuation of this transfer will lead to major trouble. To understand why, take a wildly fanciful trip with me to two isolated, side-by-side islands of equal size, Squanderville and Thriftville. Land is the only capital asset on these islands, and their communities are primitive, needing only food and producing only food. Working eight hours a day, in fact, each inhabitant can produce enough food to sustain himself or herself. And for a long time that's how things go along. On each island everybody works the prescribed eight hours a day, which means that each society is self-sufficient.

Eventually, though, the industrious citizens of Thriftville decide to do some serious saving and investing, and they start to work 16 hours a day. In this mode they continue to live off the food they produce in eight hours of work but begin exporting an equal amount to their one and only trading outlet, Squanderville.

The citizens of Squanderville are ecstatic about this turn of events, since they can now live their lives free from toil but eat as well as ever. Oh, yes, there's a quid pro quo -- but to the Squanders, it seems harmless: All that the Thrifts want in exchange for their food is Squanderbonds (which are denominated, naturally, in Squanderbucks).

Over time Thriftville accumulates an enormous amount of these bonds, which at their core represent claim checks on the future output of Squanderville. A few pundits in Squanderville smell trouble coming. They foresee that for the Squanders both to eat and to pay off -- or simply service -- the debt they're piling up will eventually require them to work more than eight hours a day. But the residents of Squanderville are in no mood to listen to such doomsaying.

Meanwhile, the citizens of Thriftville begin to get nervous. Just how good, they ask, are the IOUs of a shiftless island? So the Thrifts change strategy: Though they continue to hold some bonds, they sell most of them to Squanderville residents for Squanderbucks and use the proceeds to buy Squanderville land. And eventually the Thrifts own all of Squanderville.

At that point, the Squanders are forced to deal with an ugly equation: They must now not only return to working eight hours a day in order to eat -- they have nothing left to trade -- but must also work additional hours to service their debt and pay Thriftville rent on the land so imprudently sold. In effect, Squanderville has been colonized by purchase rather than conquest.

It can be argued, of course, that the present value of the future production that Squanderville must forever ship to Thriftville only equates to the production Thriftville initially gave up and that therefore both have received a fair deal. But since one generation of Squanders gets the free ride and future generations pay in perpetuity for it, there are -- in economist talk -- some pretty dramatic "intergenerational inequities."

Let's think of it in terms of a family: Imagine that I, Warren Buffett, can get the suppliers of all that I consume in my lifetime to take Buffett family IOUs that are payable, in goods and services and with interest added, by my descendants. This scenario may be viewed as effecting an even trade between the Buffett family unit and its creditors. But the generations of Buffetts following me are not likely to applaud the deal (and, heaven forbid, may even attempt to welsh on it).

Think again about those islands: Sooner or later the Squanderville government, facing ever greater payments to service debt, would decide to embrace highly inflationary policies -- that is, issue more Squanderbucks to dilute the value of each. After all, the government would reason, those irritating Squanderbonds are simply claims on specific numbers of Squanderbucks, not on bucks of specific value. In short, making Squanderbucks less valuable would ease the island's fiscal pain.

That prospect is why I, were I a resident of Thriftville, would opt for direct ownership of Squanderville land rather than bonds of the island's government. Most governments find it much harder morally to seize foreign-owned property than they do to dilute the purchasing power of claim checks foreigners hold. Theft by stealth is preferred to theft by force.

So what does all this island hopping have to do with the U.S.? Simply put, after World War II and up until the early 1970s we operated in the industrious Thriftville style, regularly selling more abroad than we purchased. We concurrently invested our surplus abroad, with the result that our net investment -- that is, our holdings of foreign assets less foreign holdings of U.S. assets -- increased (under methodology, since revised, that the government was then using) from $37 billion in 1950 to $68 billion in 1970. In those days, to sum up, our country's "net worth," viewed in totality, consisted of all the wealth within our borders plus a modest portion of the wealth in the rest of the world.

Additionally, because the U.S. was in a net ownership position with respect to the rest of the world, we realized net investment income that, piled on top of our trade surplus, became a second source of investable funds. Our fiscal situation was thus similar to that of an individual who was both saving some of his salary and reinvesting the dividends from his existing nest egg.

In the late 1970s the trade situation reversed, producing deficits that initially ran about 1 percent of GDP. That was hardly serious, particularly because net investment income remained positive. Indeed, with the power of compound interest working for us, our net ownership balance hit its high in 1980 at $360 billion.

Since then, however, it's been all downhill, with the pace of decline rapidly accelerating in the past five years. Our annual trade deficit now exceeds 4 percent of GDP. Equally ominous, the rest of the world owns a staggering $2.5 trillion more of the U.S. than we own of other countries. Some of this $2.5 trillion is invested in claim checks -- U.S. bonds, both governmental and private -- and some in such assets as property and equity securities.

In effect, our country has been behaving like an extraordinarily rich family that possesses an immense farm. In order to consume 4 percent more than we produce -- that's the trade deficit -- we have, day by day, been both selling pieces of the farm and increasing the mortgage on what we still own.

To put the $2.5 trillion of net foreign ownership in perspective, contrast it with the $12 trillion value of publicly owned U.S. stocks or the equal amount of U.S. residential real estate or what I would estimate as a grand total of $50 trillion in national wealth. Those comparisons show that what's already been transferred abroad is meaningful -- in the area, for example, of 5 percent of our national wealth.

More important, however, is that foreign ownership of our assets will grow at about $500 billion per year at the present trade-deficit level, which means that the deficit will be adding about one percentage point annually to foreigners' net ownership of our national wealth. As that ownership grows, so will the annual net investment income flowing out of this country. That will leave us paying ever-increasing dividends and interest to the world rather than being a net receiver of them, as in the past. We have entered the world of negative compounding -- goodbye pleasure, hello pain.

We were taught in Economics 101 that countries could not for long sustain large, ever-growing trade deficits. At a point, so it was claimed, the spree of the consumption-happy nation would be braked by currency-rate adjustments and by the unwillingness of creditor countries to accept an endless flow of IOUs from the big spenders. And that's the way it has indeed worked for the rest of the world, as we can see by the abrupt shutoffs of credit that many profligate nations have suffered in recent decades.

The U.S., however, enjoys special status. In effect, we can behave today as we wish because our past financial behavior was so exemplary -- and because we are so rich. Neither our capacity nor our intention to pay is questioned, and we continue to have a mountain of desirable assets to trade for consumables. In other words, our national credit card allows us to charge truly breathtaking amounts. But that card's credit line is not limitless.

The time to halt this trading of assets for consumables is now, and I have a plan to suggest for getting it done. My remedy may sound gimmicky, and in truth it is a tariff called by another name. But this is a tariff that retains most free-market virtues, neither protecting specific industries nor punishing specific countries nor encouraging trade wars. This plan would increase our exports and might well lead to increased overall world trade. And it would balance our books without there being a significant decline in the value of the dollar, which I believe is otherwise almost certain to occur.

We would achieve this balance by issuing what I will call Import Certificates (ICs) to all U.S. exporters in an amount equal to the dollar value of their exports. Each exporter would, in turn, sell the ICs to parties -- either exporters abroad or importers here -- wanting to get goods into the U.S. To import $1 million of goods, for example, an importer would need ICs that were the byproduct of $1 million of exports. The inevitable result: trade balance.

Because our exports total about $80 billion a month, ICs would be issued in huge, equivalent quantities -- that is, 80 billion certificates a month -- and would surely trade in an exceptionally liquid market. Competition would then determine who among those parties wanting to sell to us would buy the certificates and how much they would pay. (I visualize that the certificates would be issued with a short life, possibly of six months, so that speculators would be discouraged from accumulating them.)

For illustrative purposes, let's postulate that each IC would sell for 10 cents -- that is, 10 cents per dollar of exports behind them. Other things being equal, this amount would mean a U.S. producer could realize 10 percent more by selling his goods in the export market than by selling them domestically, with the extra 10 percent coming from his sales of ICs.

In my opinion, many exporters would view this as a reduction in cost, one that would let them cut the prices of their products in international markets. Commodity-type products would particularly encourage this kind of behavior. If aluminum, for example, was selling for 66 cents per pound domestically and ICs were worth 10 percent, domestic aluminum producers could sell for about 60 cents per pound (plus transportation costs) in foreign markets and still earn normal margins. In this scenario, the output of the U.S. would become significantly more competitive and exports would expand. Along the way, the number of jobs would grow.

Foreigners selling to us, of course, would face tougher economics. But that's a problem they're up against no matter what trade "solution" is adopted -- and make no mistake, a solution must come. (As Herb Stein said, "If something cannot go on forever, it will stop.") In one way the IC approach would give countries selling to us great flexibility, since the plan does not penalize any specific industry or product. In the end, the free market would determine what would be sold in the U.S. and who would sell it. The ICs would determine only the aggregate dollar volume of what was sold.

To see what would happen to imports, let's look at a car now entering the U.S. at a cost to the importer of $20,000. Under the new plan and the assumption that ICs sell for 10 percent, the importer's cost would rise to $22,000. If demand for the car was exceptionally strong, the importer might manage to pass all of this on to the American consumer. In the usual case, however, competitive forces would take hold, requiring the foreign manufacturer to absorb some, if not all, of the $2,000 IC cost.

There is no free lunch in the IC plan: It would have certain serious negative consequences for U.S. citizens. Prices of most imported products would increase, and so would the prices of certain competitive products manufactured domestically. The cost of the ICs, either in whole or in part, would therefore typically act as a tax on consumers.

That is a serious drawback. But there would be drawbacks also to the dollar continuing to lose value or to our increasing tariffs on specific products or instituting quotas on them -- courses of action that in my opinion offer a smaller chance of success. Above all, the pain of higher prices on goods imported today dims beside the pain we will eventually suffer if we drift along and trade away ever larger portions of our country's net worth.

I believe that ICs would produce, rather promptly, a U.S. trade equilibrium well above present export levels but below present import levels. The certificates would moderately aid all our industries in world competition, even as the free market determined which of them ultimately met the test of "comparative advantage."

This plan would not be copied by nations that are net exporters, because their ICs would be valueless. Would major exporting countries retaliate in other ways? Would this start another Smoot-Hawley tariff war? Hardly. At the time of Smoot-Hawley we ran an unreasonable trade surplus that we wished to maintain. We now run a damaging deficit that the whole world knows we must correct.

For decades the world has struggled with a shifting maze of punitive tariffs, export subsidies, quotas, dollar-locked currencies, and the like. Many of these import-inhibiting and export-encouraging devices have long been employed by major exporting countries trying to amass ever larger surpluses -- yet significant trade wars have not erupted. Surely one will not be precipitated by a proposal that simply aims at balancing the books of the world's largest trade debtor. Major exporting countries have behaved quite rationally in the past and they will continue to do so -- though, as always, it may be in their interest to attempt to convince us that they will behave otherwise.

The likely outcome of an IC plan is that the exporting nations -- after some initial posturing -- will turn their ingenuity to encouraging imports from us. Take the position of China, which today sells us about $140 billion of goods and services annually while purchasing only $25 billion. Were ICs to exist, one course for China would be simply to fill the gap by buying 115 billion certificates annually. But it could alternatively reduce its need for ICs by cutting its exports to the U.S. or by increasing its purchases from us. This last choice would probably be the most palatable for China, and we should wish it to be so.

If our exports were to increase and the supply of ICs were therefore to be enlarged, their market price would be driven down. Indeed, if our exports expanded sufficiently, ICs would be rendered valueless and the entire plan made moot. Presented with the power to make this happen, important exporting countries might quickly eliminate the mechanisms they now use to inhibit exports from us.

Were we to install an IC plan, we might opt for some transition years in which we deliberately ran a relatively small deficit, a step that would enable the world to adjust as we gradually got where we need to be. Carrying this plan out, our government could either auction "bonus" ICs every month or simply give them, say, to less-developed countries needing to increase their exports. The latter course would deliver a form of foreign aid likely to be particularly effective and appreciated.

I will close by reminding you again that I cried wolf once before. In general, the batting average of doomsayers in the U.S. is terrible. Our country has consistently made fools of those who were skeptical about either our economic potential or our resiliency. Many pessimistic seers simply underestimated the dynamism that has allowed us to overcome problems that once seemed ominous. We still have a truly remarkable country and economy.

But I believe that in the trade deficit we also have a problem that is going to test all of our abilities to find a solution. A gently declining dollar will not provide the answer. True, it would reduce our trade deficit to a degree, but not by enough to halt the outflow of our country's net worth and the resulting growth in our investment-income deficit.

Perhaps there are other solutions that make more sense than mine. However, wishful thinking -- and its usual companion, thumb sucking -- is not among them. From what I now see, action to halt the rapid outflow of our national wealth is called for, and ICs seem the least painful and most certain way to get the job done. Just keep remembering that this is not a small problem: For example, at the rate at which the rest of the world is now making net investments in the U.S., it could annually buy and sock away nearly 4 percent of our publicly traded stocks.

In evaluating business options at Berkshire, my partner, Charles Munger, suggests that we pay close attention to his jocular wish: "All I want to know is where I'm going to die, so I'll never go there." Framers of our trade policy should heed this caution -- and steer clear of Squanderville.

FORTUNE editor at large Carol Loomis, who is a Berkshire Hathaway shareholder, worked with Warren Buffett on this article.



09.12.2003, 07:31
9:54pm 12/08/03 Bear Stearns sees weak dollar until Fed policy change

By Allen Wan

TOKYO (CBS.MW) -- Bear Stearns' economists said that they expect the dollar to continue to weaken until the Fed changes monetary policy. "A weakening dollar -- against both foreign currencies as well as gold and commodities -- is clear evidence that monetary policy is loose and inflationary in the same way that the strengthening dollar in the late 1990s was an indication of an overly tight, deflationary monetary policy," economist David Malpass told clients in a note. The Federal Reserve is meeting Tuesday and while no change in monetary policy is expected, investors will be looking for clues on when the central bank will raise rates from their record lows in the midst of a strengthening U.S. economy. By midday Tokyo, the dollar was trading steady at 107.39 yen from 107.40 in late Monday trade in New York, where the greenback fell to a fresh three-year low of 107.11 yen at one point.

Why Next Week's F.O.M.C. Meeting Looms Large

Chris Temple
The National Investor
December 08, 2003

Next Tuesday, the Federal Reserve's Open Market Committee meets once again to discuss its monetary policy. Nobody expects Greenspan, Bernanke and Company to change the official federal funds target rate from its meager level of one percent. In fact, following this morning's release of still-lethargic employment numbers, futures markets have started backing off their bets that the Fed would finally begin raising short-term interest rates by next Spring.

Following the F.O.M.C.'s last few meetings, the central bank's rate setting arm has told the world that it does not intend to raise rates until the Second Coming-if then. This stance has served the Fed well, as it seeks to keep "the economy" moving forward by extending-and worsening-the consumer credit and housing bubbles. Wall Street has similarly bought this kind of phony prosperity hook, line and sinker, as traders have bid stocks back up to their highest levels in two years.

There's an old saying, though, that one can have too much of a good thing. While Fed officials' countless promises over the last few months that the central bank would keep interest rates low for "a considerable period" have had much of their intended effect on the various bubbles the Fed is trying to inflate further, it has also had a downside. In recent weeks, it's the negative effects of such an open-ended monetary inflation that have begun to be felt more; all of them a cause or consequence of a steadily weakening U.S. dollar.

As these nasty side effects of the Fed's actions have begun to move front and center on the financial pages, the need has grown dramatically for the F.O.M.C. to tell us SOMETHING different next week. Does it realize that a gold price now North of $400 per ounce puts the lie to its continued protestations that inflation is not an issue? Does it also acknowledge that its trashing of the U.S. dollar has caused a substantial decline in foreign capital inflows? Does it need a translator to grasp the incredible magnitude of the O.P.E.C. cartel's comments of earlier this week?

Last but not least-as much as it does not want to-will the Fed signal that it WILL raise short term interest rates sooner rather than later if that's what the markets demand?


As the F.O.M.C. gathers, it will be in a world monetary environment that has changed in the six weeks since the last pow wow. For over two years, the world's central banks have pretty much been engaging in tag-team easing of monetary policy, as all of them have lowered interest rates and made new credit plentiful to goose economic activity.

But that's over.

In the last month, the Bank of England has begun raising short-term interest rates, desiring to moderate credit and housing bubbles. Australia's central bank has now raised short-term interest rates TWICE in about a month, following Wednesday's hike, for the same reasons.

Though the Fed may not "get it" yet, there are sufficient market participants becoming more concerned about future price inflation that they want to see some responsibility back in monetary policy. Far from being spooked, they have rewarded both sterling and the Aussie dollar with higher valuations. Signs are popping up that currency traders and bond buyers alike are moving back toward their historic behavior of putting their chips on those nations with the higher interest rates. In addition, those also whose economies are based on raw materials-Australia, South Africa and Canada, for example-are also enjoying buying interest.

In such an environment, the longer the Fed resists this trend, the greater the beating that the dollar will suffer. And this will especially be the case, I believe, if the Fed does NOT at least change its statement next week. Such inaction and denial on the part of the F.O.M.C. when the evidence is accumulating rapidly against the Fed's position would be rightly viewed not only as irresponsible, but delusional.


I have believed for a while now that the Fed and its shills in the financial press would one day regret having called so much attention to the price of gold over the last year or so. That day may be here, as gold closed today at yet another new high of $406 per ounce on the cash price. This leaves the yellow metal within a mere $12-14 of a level it has reached and pulled back from several times (the last of these in early 1996) since its long, painful bear market began over 20 years ago.

Such luminaries as publisher Steve Forbes, former Congressman Jack Kemp, economic commentator and Republican National Committee ally Larry Kudlow and others have all been pointing to gold's ascent as "proof" that the Fed was successfully holding off deflation, and that its monetary tonic was working at reinvigorating the economy. They haven't told John Q. Investor this, though, in order to encourage him to buy gold-no, sir. Gold's rising price has instead been used as the rationale to convince the investing public that all was well with the world again, and that it was now time to come to Chairman Greenspan's and the economy's aid once more by doing the patriotic thing: shoveling money back into the stock market.

As I have asked many times lately, though, if investors, currency traders and other investors could take solace in a gold price which at $340, $350 or-I'll stretch here--$380 was "good," what does $406 tell them? What about $420, arguably the last remaining technical resistance level which, once breached, will confirm gold's bull market even for the skeptics?

We've reached the point where gold's rising price may finally be CAUSING-as much as being a result of-the weakness in the dollar. This dollar weakness threatens to get out of hand as well, largely due to the Fed and the Bush Administration both implicitly having invited it. The Fed has made bets in favor of gold and against the dollar virtually one-way, risk-free ones. Longer-term, neither of those trends is going to change. However, I have to believe that-as it crafts its post-meeting jargon for public dissemination next week-the F.O.M.C. will have both these items on its mind, and will be looking for a way to make both gold bugs and currency traders more honest, if not a little frightened.


Though Fed Chairman Greenspan still has plenty of people bamboozled as he insists there's no "inflation," not everyone is so fooled. Some really do understand that a dollar just doesn't buy what it used to; and those people happen to sell a whole lot of oil to the United States.

Though O.P.E.C. decided to wait a while before reducing oil output, what oil ministers had to say earlier this week about their preferred target price must have sent the coldest shivers yet up Greenspan's spine. While not repudiating it outright, they suggested that their previous desired "band" of $22-28 per barrel for oil really needed to be "missed" to the up side. Simply put, that range was entered into a while back; and since then, the value of the dollar that oil is denominated in has lost a quarter or so of its value.

Thus, according to influential Saudi oil minister Ali al-Naimi, prices now over $31 per barrel really aren't too high. They-and the cartel-are simply adjusting the price belatedly to account for the Fed's debasement of the world's reserve currency. Notably, some members of the cartel even lobbied unsuccessfully for an overt new band. Venezuela's Hugo Chavez, for example, wanted the cartel to establish a new, stated band of $25-32 per barrel. Some say this was due more to his dislike of the U.S. than to economics. Maybe it's just sour grapes; after all, when the C.I.A. and the Bush Administration try to topple you from power, you tend to become unpleasant.


This whole cocktail has been made progressively worse for the Fed to deal with due to its own, willing trashing of the U.S. dollar. Honorable mention also needs to go to President George W. Bush, who's spending money (i.e.-running America deeper into debt) at a clip so fast as to make even Lyndon Johnson look like a fiscal conservative.

Whatever the case, we could well be mere weeks-if not days-away from a sudden unraveling of financial markets unrivaled since 1987. Many of you remember as I vividly do that investors-especially American ones-gleefully shrugged off all the same things back then that they are now. A falling dollar and rising interest rates meant things were "good." And, from late 1995's adoption of the Plaza Accord until the late Summer of 1987, investors bid up stocks to then-unprecedented heights in spite of the greenback losing darn near half its value in the interim.

But then-almost as if someone had flipped a switch-everyone decided to wake up to the fact that the dollar's long decline was evil. Moving from euphoric to panic-stricken almost overnight, stock market investors ran for cover. In a mere nine weeks, they shaved nearly 40% from the Dow Jones Industrial Average before the carnage was over.

Presiding over the Fed during the latter stages of that lunacy was the same man who now must decide which one(s) of a series of distasteful things he must say or do to avert a similar outcome. In the end, the long-term trends of a falling dollar, rising commodity prices and falling financial assets will not change regardless of what the Fed does. However, how the Fed NOW handles-or fails to handle-this delicate mess of its own creation will determine whether we get an immediate, 1987-style blow-off for stocks now, or a more gradual correction. Its willingness to at least fire a rhetorical shot across inflation's bow will also determine whether the greenback's slow but steady bleeding turns into a rout, and gold flies above $420 per ounce to who-knows-where.

In short, what's at stake next Tuesday for all the markets is more than it's been at any time in recent memory!

-Chris Temple
The National Investor

Dec 08, 2003


Heute ist Alan's grosser Tag :sss!


syr :rolleyes:

09.12.2003, 07:47
December 8, 2003

China bringing money home from US, other foreign banks

SHANGHAI - China is bringing home billions of dollars in US and other foreign banks, shrinking the pool of financing for American government bonds, according to the Bank for International Settlements.

The move is prompted by China's need to meet demand for US dollar-denominated loans at home and speculation on a strengthening in the value of the Chinese yuan, said the Geneva-based BIS, which links the world's central banks and monitors global money flows.

China invests part of its multibillion-dollar trade surpluses in US and other foreign bonds. According to the BIS, since 1999 that has played a key role in financing government budget deficits and holding down interest rates.

But money held abroad by Chinese banks fell to US$70.4 billion by the end of June, down from US$92.5 billion two years earlier, the BIS said in a report seen on Monday on its Web site (www.bis.org).

'The surplus of funds placed in the international banking system by the Chinese banking sector that has been available for the financing of foreign government deficits is shrinking,' it said.

Deposits abroad by other Asian economies also are falling, the bank said.

Taiwanese banks' overseas deposits fell to US$21.5 billion in the second quarter of this year - half the US$42.5 billion that they held abroad two years earlier, according to the bank.

It said South Korean banks brought home US$6.3 billion in the second quarter of this year.

China is the third-biggest investor in US treasury bonds, after Japan and Britain.

Overall foreign purchases of Treasury bonds have fallen from more than US$40 billion per month through July to US$25 billion in August and US$5.6 billion in September, according to the BIS report.

The shift in money comes amid US pressure on China to end strict currency controls that American officials say keeps the value of country's currency, the yuan, too low and makes Chinese exports unfairly inexpensive.

The BIS report said some of the movement of Chinese deposits also was prompted by expectations that China might increase the value of the yuan, which Beijing has kept at a value of about 8.3 to the US dollar since 1994.

Chinese leaders say they will eventually loosen currency controls, but have given no timetable. They say China's banks can't handle the shock of a sudden change.

Critics of this strategy argue that a stronger yuan would make US bonds relatively less attractive.

If the dollar plunged, foreign investors might sell off US stocks and bonds. That could force up interest rates and jeopardise the US economic recovery.


syr :rolleyes:

10.12.2003, 14:53

Inflation Could Be Around The Corner


Monday, December 08, 2003

by Bruce Bartlett

One of the reasons why administrations fail is that they often fall victim to the law of unintended consequences. The Bush Administration discovered this when it imposed tariffs on imported steel last year in order to help steel producers. What it forgot is that there are far more people working in steel-using industries than for producers. Steel users were harmed by the tariffs because their costs increased, leading to reduced sales and employment. After 18 months, the administration finally figured this out and eliminated the tariffs it should never have imposed in the first place.

Unfortunately, the Bush Administration is in danger of making the same mistake with respect to the dollar. Having become obsessed with the trade deficit, it is looking for other ways to reduce imports and raise exports. One way of doing this is to reduce the value of the dollar on foreign exchange markets. A lower dollar makes imports more expensive and exports cheaper in terms of foreign currencies. When this happens naturally, economists view it as part of the free market's automatic adjustment mechanism for trade imbalances.

The problem is that this process is not taking place on its own, nor is it costless. The Treasury Department has been signaling for some time that it would not be displeased if the dollar fell. This sort of "benign neglect" can be as effective as direct action in foreign currency markets, such as having the Treasury sell dollars. When currency traders know that we won't defend our currency, they take advantage of it by selling dollars against other currencies. That is a key reason why the dollar has fallen sharply against the euro and is now at a record low.

Another effect of this weak dollar policy became evident in recent days when the OPEC oil cartel indicated that it might raise prices to compensate for the falling dollar. It has always priced oil in dollars, so a fall in the dollar means that its members have to pay more for goods and services purchased in Europe, Japan and elsewhere. Ali Naimi, the oil minister of Saudi Arabia, complained on Thursday that the dollar had fallen 35 percent in the last 3 years. He said OPEC would price oil to maintain "the purchasing power of the old, good dollar."

This is all very reminiscent of the early 1970s, when OPEC first raised the price of oil in response to a falling dollar. As early as 1970, it passed a resolution at its annual conference saying that it would adjust the price of oil to reflect changes in real purchasing power. The following year, it passed a resolution complaining about "world-wide inflation and the ever widening gap existing between the prices of capital and manufactured goods…and those of petroleum." In other words, the prices of things that OPEC countries imported were rising faster than the oil that they exported.

By 1973, OPEC had had enough with U.S. inflation and it moved to sharply raise the price of oil. Although the war between Israel and Egypt precipitated the price rise, it couldn't have been sustained unless supported by fundamental economic forces. These same forces also pushed up prices for gold and other commodities. Basically, the 1973 OPEC oil price increase just kept the price of oil line with other commodities. It was more jarring only because of the circumstances in which it occurred and because it happened all at once.

Nevertheless, there are those who still believe that OPEC caused the inflation of the 1970s, through some sort of "cost-push" mechanism. In truth, OPEC was responding to inflation, rather than causing it. The root cause was the creation of too many dollars by the Federal Reserve. This came about because Presidents Lyndon Johnson and Richard Nixon cajoled the Fed into running an inflationary monetary policy in order to keep interest rates artificially low. They also removed many of the institutional constraints that prevented previous presidents from doing the same thing.

In short, the Fed, not OPEC, caused the stagflation of the 1970s. A recent paper by University of Michigan economists Robert Barsky and Lutz Kilian confirms this analysis. Writing in the prestigious NBER Macroeconomics Annual (2001), they conclude, "The Great Stagflation of the 1970s could have been avoided had the Fed not permitted major monetary expansions in the early 1970s…. The stagflation observed in the 1970s is unlikely to have been caused by supply disturbances such as oil shocks."

Although the signs are nascent, indications are that inflation is starting to show its ugly head again, the result of an extremely easy Fed policy over the last 3 years. Sensitive commodity prices like gold are up, the dollar is down and OPEC is again complaining about lost purchasing power. It's like déjà vu all over again.

Bruce Bartlett is a Senior Fellow with the National Center for Policy Analysis.


syr :rolleyes:

13.12.2003, 09:11

Dollar Dips to Record Low Vs Euro on Snow
Friday December 12, 4:30 pm ET
By Manuela Badawy

NEW YORK (Reuters) - The dollar reached a lifetime low against the euro on Friday after U.S. Treasury Secretary John Snow said the dollar's decline was "orderly," a comment dollar bears took as a green light to sell the currency, analysts said.

"This is a deja vu of this spring when John Snow (News) was asked about the dollar decline," said Ashraf Laidi, chief currency analyst at MG Financial Group in New York. "And just about when the dollar had taken a sharp drop, he said the decline had been 'orderly,' which accelerated the fall in the currency, and we are seeing some of that now."

The euro reached a record high of $1.2306 (EUR=), according to Reuters data, before drifting back to $1.2292, a gain of 0.68 percent on the day.

Laidi said Snow's remarks left markets thinking that the government's strong-dollar policy is mere rhetoric and that the White House is in fact content to see further dollar losses.

Snow noted on Bloomberg Television, "The dollar on a traded-weighted basis is still higher today than it has been for most of the last 25 years."

Later, during the New York trading day, President Bush called for a strong U.S. dollar and suggested a strengthening U.S. economy should lend support to its value.


The dollar had weakened earlier following a report that showed a surprising drop in U.S. consumer sentiment, in contrast to generally upbeat recent U.S. economic data.

The University of Michigan's preliminary reading of December consumer sentiment fell to 89.6 from November's final reading of 93.7. Economists had forecast a rise to 96.0.

The dollar rallied earlier this week as investors sold euros to lock in profits on its 9-cent move higher against the greenback in the last five weeks.

The dollar, already weak against the yen, remained down 0.32 percent to trade near 107.66 yen (JPY=).

After Japan's closely watched quarterly "tankan" survey showed big Japanese firms more confident about business conditions than at any time in the past six years, selling pressure increased on the greenback.

However, fears of intervention are thought to have put a cap on the dollar's losses.

Japan is concerned that a rising yen could harm the country's export-led recovery, making goods too expensive for foreigners. Finance Minister Sadakazu Tanigaki reiterated on Friday that recent currency moves had been too fast.


At the start of U.S. trade, the dollar had trimmed modest losses after the October U.S. trade gap data came in near estimates, confounding investors who had expected worse and had sold dollars ahead of the report, only to buy them back again.

In October the U.S. trade deficit widened to $41.77 billion versus an upward revision to $41.34 billion in September.

Other data showed U.S. inflation on the producer level fell unexpectedly in November, a move that carries a mixed message for the dollar. November's producer price index fell 0.3 percent versus expectations for a rise of 0.1 percent. Inflation on the wholesale level was up 0.8 percent in October. Excluding the food and energy sectors, prices fell 0.1 percent last month.

Falling inflation benefits U.S. asset markets and is another reason why the Federal Reserve can leave interest rates low for the foreseeable future. However, low U.S. interest rates versus higher rates among the dollar's peers means there is less incentive to purchase the dollar.

The dollar fell to 1.2615 Swiss francs (CHF=), a loss of 0.65 percent on the day. Earlier, Swiss National Bank chairman Jean-Pierre Roth called dollar weakness a problem but said that overall the forex situation was not bad.

Elsewhere, sterling climbed to a fresh 11-year high $1.7509 (GBP=), but dipped back to $1.7467, a gain of 0.18 percent.

(Additional reporting by Daniel Bases)


Snow :schaf:

syr :hihi

13.12.2003, 16:50
US/Snow: Dollar nach Handelsgewichten immer noch stark

New York (vwd) - Die US-Währung befindet sich nach Ansicht von
US-Finanzminister John Snow in einem normalen Anpassungsprozess und bleibt
gemessen an den Handelsströmen immer noch stark. "Der Dollar ist auf einer
handelsgewichteten Basis immer noch höher als zu den meisten Zeiten in den
vergangenen 25 Jahren", sagte Snow am Freitag in einem Fernsehinterview. Das
große Handelsdefizit der USA zeige, dass die US-Wirtschaft viel stärker
wachse als die Volkswirtschaften der Haupthandelspartner. Die Gefahr, dass
Investoren ihre Investments wegen Besorgnisse über einen Kursverfall des
Dollar abziehen könnten, schätzt Snow als "sehr entfernt liegend" ein.


USD-Cash longterm ;):


"Der Dollar ist auf einer
handelsgewichteten Basis immer noch höher als zu den meisten Zeiten in den
vergangenen 25 Jahren", sagte Snow

Ob sich da Snow nicht etwas täuscht? Also bei unter 90 lag er eher selten, und nie mehr als 26 Monate am Stück......


15.12.2003, 11:46
Saddam capture sets brief dollar rally

Dollar resumed weaker trends by mid-morning London

By Emily Church & Allen Wan, CBS.MarketWatch.com
Last Update: 5:28 AM ET Dec. 15, 2003

LONDON (CBS.MW) - After a brief rally on the weekend capture of Saddam Hussein, the dollar resumed its recent, weaker trend against the major currencies Monday after two car bombs in Baghdad underlined the continuing terrorist threat in Iraq.

The dollar was down 0.4 percent against the euro, as the common currency struck $1.2224 in mid-morning London trade, well off a low to $1.2119 overnight in Asian trade. The dollar pulled back slightly to 108.03 yen from 108.40 yen.

"To the extent that the capture of Saddam has little or no material impact on the dynamics in Iraq then it should not have a lasting positive impact on the U.S. dollar," said strategists at ABN Amro, a Dutch bank.

"The car bombs exploding in Baghdad... already suggest that an immediate end to the violence is unlikely. One other key issue is whether there will be a discovery of the WMD claimed by the coalition ahead of the war," AMN Amro added. "On the whole events on the weekend will not offset the U.S. dollar's underlying structural weakness."

A suicide bomber killed eight Iraqi policemen in an attack in Baghdad's northern outskirts, CBS News reported. Earlier Monday, four officers were wounded when a car bomb exploded in the western Ameriyah neighborhood.

Bearish on the dollar

Without firing a shot, American forces took Saddam into custody on Saturday night after tracking him to a run-down and rat-infested farming compound near his hometown of Tikrit. He had been on the run for eight months and was seen as a galvanizing force in hiding for the anti-U.S. resistance forces in that country.

Despite the dollar's gains, analysts don't expect the bullish trend to continue given the large fiscal and trade deficits in the United States.

"I still think the dollar will continue to weaken," said Michael Coates, analyst at KBC Securities in Tokyo. "The only thing that can change my view is the Fed," he said.

Shaun Giacomo, UBS analyst in Australia, is also bearish about the dollar's prospects and sees gold soaring as high as $470 next year.

Many analysts have said a Fed tightening may be the only way to arrest the dollar's slide ahead of U.S. presidential elections next year. They aren't sure whether the Bush administration would want a firmer dollar, given the importance of exports to the U.S. economy.

Friday's action

On Friday, the euro crossed briefly above the $1.23 level for the first time since its 1999 launch after a report showed an unexpected dip in U.S. consumer confidence and Washington indicated the dollar decline was not alarming.

Consumer sentiment eroded in early December, according to researchers at the University of Michigan. Its consumer sentiment index fell to 89.6 from 93.7 in November. Read more.

U.S. Treasury Secretary John Snow said Friday in an interview with Bloomberg Television that the dollar adjustment process has been orderly.

Snow noted that on a trade-weighted basis, the U.S. currency remains at a higher value than it has for much of the last quarter century.

Analysts said currency participants read the remarks as a sign the Bush administration won't do much -- either with rhetoric or intervention -- to stem a declining dollar in the short term.


syr :rolleyes:

22.12.2003, 15:54
9:00am 12/22/03

Dollar declines to new euro low after terror alert

By Rachel Koning

CHICAGO (CBS.MW) -- The U.S. dollar remained under pressure against its major rivals in the wake of the U.S. terror alert warning elevation, announced over the weekend. The U.S. government said the terror alert level is now at "orange," the second higher reading, ahead of the holidays. The euro recently changed hands up 0.5 percent at $1.2426 after trading to an all-time high $1.2446. The British pound eased 0.1 percent at $1.7623 but earlier hit a fresh 11-year high of $1.7678. Against the Japanese yen, the dollar fell 0.2 percent at 107.52. And against the Swiss franc, considered the safe-haven currency during geopolitical unrest, the greenback declined 0.3 percent at a seven-year low of 1.2520 francs.


30.12.2003, 17:02
ADE: Devisen: Nach schwachen US-Konjunkturdaten steigt Euro auf neues Allzeithoch

FRANKFURT (dpa-AFX) - Nach schwachen US-Konjunkturdaten ist der Euro-Kurs
am Dienstag erneut auf ein neues Allzeithoch gestiegen. Im
Nachmittagshandel in Frankfurt stieg der Kurs der Gemeinschaftswährung bis auf
1,2533 US-Dollar. Die Europäische Zentralbank (EZB) hatte den Referenzkurs zuvor
noch auf 1,2496 (Montag: 1,2499) Dollar festgesetzt. Der Dollar kostete damit
0,8003 (0,8001) Euro.
Die am Nachmittag veröffentlichten Konjunkturdaten aus den USA waren
allesamt schlechter als erwartet ausgefallen. Dies habe den Druck auf den Dollar
noch erhöht, sagten Händler. Das Verbrauchervertrauen in den USA fiel im
Dezember unerwartet deutlich von 92,3 Punkten im Vormonat auf 91,3 Punkte. Vor
allem der schwache Arbeitsmarkt habe die Stimmung der Verbraucher belastet,
teilte das private Forschungsinstitut Conference Board am Dienstag in Washington
mit. Gleichzeitig sank auch der Einkaufsmanagerindex für die Region Chicago im
Dezember stärker als erwartet. Der viel beachtete Frühindikator verringerte sich
von 64,1 Punkten im November auf 59,2 Punkte im Dezember.

Bundesbankvizepräsident Jürgen Stark kein Anlass zu Beunruhigung und die Folgen
sind unterm Strich "nicht unbedingt negativ". Schließlich gingen nur 10 Prozent
der deutschen Exporte in die USA und ein nur etwas höherer Prozentsatz werde in
Dollar abgewickelt, aber fast 50 Prozent gingen ins Euro-Währungsgebiet, sagte
Stark der "Börsen-Zeitung" (Mittwochausgabe). Die Verbilligung der Importe dürfe
nicht vernachlässigt werden. Der Anstieg des Euro zeige die Verunsicherung an
den Märkten "über die Tragfähigkeit des Konjunkturaufschwungs."
Gelassen gibt sich der Bundesverband des Deutschen Groß- und Außenhandels
(BGA) bezüglich einer möglichen Aufwertung der europäischen
Einschätzung des BGA um 4,5 Prozent zum Vorjahr steigen.

Der Thread feiert diese Tage den 1. Geburtstag :respekt ! thx for a good year :kiss:......


31.12.2003, 11:46
US not worried about dollar's drop

Wednesday 31 December 2003 6:25 AM GMT

The US dollar's steady decline in value against the euro and other key currencies may cause agony in European capitals, but there is little sign it is rising to the level of a major policy concern in Washington.

Analysts say the steady depreciation not only remains orderly, but also carries the potential to help America get its whopping trade and current account deficits - which are widely criticised in Europe - back into better balance.

"I think on balance there are far more positives for the United States in what is going on in currencies than there are negatives," said economist Greg Valliere of Schwab Washington Research Group.

The euro broke above the $1.25 barrier for the first time on Monday, and late on Tuesday was trading at around $1.2550.

The euro's strength and the dollar's dive come before a 6-7 February meeting in Boca Raton, Florida, of the Group of Seven finance ministers where currency issues are always discussed.

The G7 consists of the United States, Britain, Canada, France, Germany, Italy and Japan.

US endorses fall

In just under a year since taking office last January, Treasury Secretary John Snow has toned down the former hard-line US commitment to a "strong dollar," effectively endorsing the fall by saying its value "reflects the fundamentals of the demand and supply for currencies".

"It makes sense, given that inflation has been low and interest rates are at low levels, so under those circumstances a logical response would be to favour a weaker dollar"Greg Mastel, Trade adviser.

Snow replaced former Treasury Secretary Paul O'Neill, who resigned under White House fire before Christmas last year.

"Long term, the weakness of our trade and current account imbalances meant we had to reverse course (on currency policy) so what we're seeing is a natural process and not something that should cause a lot of alarm," said Greg Mastel, an international trade adviser with Washington law firm Miller and Chevalier.

"It makes sense, given that inflation has been low and interest rates are at low levels, so under those circumstances a logical response would be to favour a weaker dollar," Mastel added, since it means there is little or no risk of importing price pressures and a better chance of boosting US exports.

'Legitimate' stance

Economist Allen Sinai of Decision Economics Inc in Boston wrote this week that the Bush administration had an evident policy of "benign neglect, if not outright approval" of a cheaper dollar.

He added the US stance was a legitimate one.

"It is patently clear that the administration does not mind a declining dollar, so long as it is 'orderly'," Sinai said.

"At this stage, a lower dollar should increase exports, help manufacturing, increase US economic growth, not be a problem for inflation and if financial troubles occur, they would only do so from time to time," Sinai said.

Valliere similarly said that he saw no indication of official unease over the dollar weakening, possibly because there seemed to be no likelihood of a surge in inflation as can happen when a cheaper dollar makes imports more costly.

"The more relevant point might be whether the Europeans or Japanese start to cry 'uncle' and ask for coordinated intervention or for Snow to at least say the dollar slide has gone far enough," Valliere said.

"But frankly, I don't see any sign that this is becoming a major issue for Washington," he added.

You can find this article at:


04.01.2004, 09:47

Wednesday, December 31, 2003
Interim Report
By Forex Capital Markets LLC

In recent months, the decline in the US dollar has been hitting the headlines of all major financial publications. Since the beginning of this year, the trade weighted dollar index has fallen over 14%, while declining 20% against the euro. Based upon both technical and fundamental analysis, the collapse in the dollar is expected to continue. However, the dollar’s weakness against currencies such as the EURUSD, are at very extreme levels, suggesting that a need for a meaningful correction cannot be overstated. This implies that volatility will be the theme in the first quarter of 2004.

What we have seen in 2004 is that a rebounding economy does not necessarily translate into a strengthening dollar. A widening current account deficit that is funded primarily by foreign central banks will continue to exert downward pressure on the US dollar. Before elaborating on the outlook for the US dollar, we will first recap the forces that pushed the dollar lower throughout 2003.

Recap of 2003 Dollar Decline

Weak Economy
Although the economy began to show signs of recovery in the second half, it was insufficient in reversing the dollar’s decline. According to the National Bureau of Economic Research (NBER), a nonprofit private organization that determines the official dates for business cycles, the latest recession in the US began in March 2001 and ended in November 2001. Unfortunately, the average American will tell you otherwise. Since November 2001, growth has been disappointing while corporations have continued to shed jobs. After a brief rise in the US equity markets in the first quarter of 2002, stocks collapsed throughout the remainder of the year and into the first quarter of 2003. The war in Iraq further increased geopolitical tensions and uncertainty in the US economic recovery. GDP in the first quarter was a mere 1.4%, as businesses refrained from investing before a significant pickup in consumer demand. The Federal Reserve responded by slashing interest rates to a 45-year low of 1%. Also, for the first time in history, the Federal Reserve noted the risk of deflation in their monetary policy statement. With no room to maneuver interest rates and the US’ commitment to ensure that the country does not fall into the same type of deflationary spiral as Japan, the market realized that one of the few tactics the Federal Reserve can rely on to combat deflation is a weakening of the US dollar.

Twin Deficits
Another problem for the US is that it currently has large and growing “twin deficits.” The US current account deficit has just retraced from a record high of 5.2% of GDP to 4.9%, while the budget deficit is predicted to reach 4.7% of GDP in 2004. The presence of a current account deficit in the US is no surprise considering that the country has been running current account deficits for the past 10 years. However, this year in particular, it has become a primary concern because the US current account deficit is at record levels with no signs of a reversal, while interest rates are at multi-decade lows. The US currently needs more than $1.5 billion in daily foreign inflows to prevent the USD from depreciating any further based upon trade. The federal budget deficit also reached an all time high in 2003 due to the Iraq war, recession and the weak economy. If you recall, it was only 2 years ago that the US was running a budget surplus.

De facto ‘Weak Dollar Policy’
Time and again we have heard both President George W. Bush and Treasury Secretary John Snow repeat the Bush administration’s commitment to a strong dollar. However, the markets believe that a strong dollar may not be the administration’s true agenda because their actions imply otherwise. Recent tax and interest rate cuts have been in line with expansionary fiscal and monetary policies - the repercussions of both of these initiatives have been a weaker dollar. More specifically, interest rate cuts lower the attractiveness of US assets such as treasuries, causing a decreased demand for the US dollar. What the market believes to be a covert weak dollar policy is further supported by the talk of the US encouraging or pressuring China to float their currency. In the September G7 meeting, the US, in its most overt abandonment of a strong dollar, led a call for other nations to apply "more flexible exchange rates." If China heeded to these demands, the Chinese Renminbi would strengthen, forcing a further weakening of the US dollar.

Trends For The US Economy in the First Quarter of 2004

Looking forward to 2004, we expect to see continued improvements in US economic data, a steepening of the yield curve, more initiatives to weaken the dollar and growing deficits.

Improving Data - 2004 Recovery
Despite the dismal performance in the first half of 2003, the US economy is expected to expand by 3.9% (IMF) – 4.2% (OECD) next year. Growth has improved dramatically in the second half (particularly in the third quarter) with consumer and business sentiment recovering from post Iraq war jitters. More specifically, data on all fronts including productivity, consumer spending, housing and manufacturing have surprised on the upside. Optimistic PMI (purchasing manager index) reports forecast a pickup in hiring in the manufacturing sector throughout 2004, which means that conditions are already in place for a rebound in the manufacturing component of the labor market. The benefits of tax cuts should continue to positively impact consumer demand in the first quarter of 2004. As consumer spending, business investment and corporate profitability rise, we also expect increasing demand for US assets and a rebound in the equity market to support the dollar.

Steepening Yield Curve
The Federal Reserve will be hiking rates in 2004. As indicated by the diagram below, the far end of the yield curve has steepened significantly since the beginning of this year, implying increasing expectations for an economic recovery. Eurodollar futures are already pricing in the possibility of a 25bp rate hike in the first half of 2004. If the Fed hikes rates and hints that more hikes will be on the horizon, this will attract foreign demand for US assets, which could help to reverse the dollar’s decline.

Continued Initiatives to Weaken the Dollar
Despite the government’s comments to the press, we expect the US to continue engaging in initiatives that will weaken the dollar. Ahead of an election year, the government needs to ensure a solid economic recovery. The capture of Saddam Hussein has definitely helped President Bush’s approval ratings, but the key to his reelection lies in reviving the labor market. A strong US dollar before an economic recovery would not be in the US government’s best interest as it would undermine the efforts that the government has been taking to stimulate a recovery. Therefore any strong dollar comments from the Bush administration can be taken as “empty words.” This means that the US needs a weak dollar to promote recovery. Therefore, we expect to see continued pressure on China and Japan to curb intervention activities as the government looks to shift the blame of decreasing corporate profitability on decreased competitiveness as a result of the artificially weak Renminbi and Yen.

Growing Deficits – Funded by Foreign Central Banks
As the current account deficit grows, the need for external financing also increases. With low interest rates and a historically expensive equities market, it is unclear how much longer foreigners would be willing to finance the current account deficit. The IMF has already warned that "an abrupt weakening of investor sentiment and turbulent exchange market conditions" could cause the current account deficit to balloon and the dollar to weaken significantly. With the Fed’s custody account at record highs of $1.055trillion, the current account deficit has primarily been funded by foreign central bank accumulation of US treasuries and agencies. Any relaxation of foreign central bank intervention could accelerate the decline in the dollar. The current account deficit is expected to widen to 6% of GDP in 2004. As for the budget deficit, the government has already warned that despite a strengthening economy, continued commitments to military efforts abroad could cause the budget deficit to exceed $500 billion in 2004.

Watch: Jobs and Inflation Need to Rise Before Hiking Rates
The Federal Reserve has already implied that they have no intentions of raising rates before the labor market recovers and a steady increase in inflation occurs. The latest decline in core CPI (for Nov) is the first decline in 21 years and confirms that inflation has yet to become a concern, as prices of airfares, clothing and lodging continue to trend lower. Furthermore, this validates the Fed’s assessment of inflation, which is that “increases in core consumer prices are muted and expected to remain low.” Therefore even though GDP growth has been improving, if the government wants the labor market to recover ahead of the election, monetary policy needs to remain overly stimulative. Recent sentiment surveys indicate that corporations are optimistic about their hiring intentions, but they have yet to act on this optimism. Therefore, the Fed needs to keep rates low to stimulate corporations to increase their borrowing and capital spending (research and new product development), which would eventually lead to increased hiring. Maintaining an accommodative monetary policy provides the perfect backdrop for a strong recovery.

The Fed also believes that there is a substantial amount of excess slack in the economy, as evidenced by the high unemployment rate and 75.7% (Nov) capacity utilization. A prolonged period of above-trend growth will be needed to absorb the excess slack. As a result, rate hikes will probably be postponed until the second to third quarter of 2004. The Fed is taking a “wait and see approach” in fear of halting the recovery by hiking interest rates prematurely. The aggressive rate hikes by the Bank of England and the Reserve Bank of Australia has contributed to the dollar’s decline against the GBP and AUD.

Where Do We See The US Dollar in the First Quarter of 2004?
The biggest point that we want to stress is that although the US economy is expected to accelerate in the first quarter of 2004, this does not necessarily translate into a recovery for the US dollar. As mentioned earlier, the primary cause for the dollar’s decline in 2003 was the widening US current account deficit – a problem that has yet to be resolved. The current account deficit is expected to widen even further as the economy recovers. During rebounds, consumers will be increasing demand for both domestic and foreign goods. Coupled with the Bush administration’s continued de facto weak dollar policy in the first quarter of 2004, the dollar is expected to continue to come under pressure.

Risks for the US dollar in 2004

There are a number of risks that the dollar faces in 2004. A reversal of the dollar’s downtrend could occur if a strong US economic recovery prompts a stock market rally and a boom in M&A activity, drawing foreign investors back to US assets. Intervention by the Federal Reserve or ECB to halt the decline in the dollar or curb the rise in the Euro could also help to reverse the market’s current bearish sentiment. On the other hand, the risks for a sharp acceleration in the dollar’s decline could be prompted by stronger than expected Eurozone growth, more flexibility in the RMB or new US scandals. 2004 is also an election year and any surprises on that front could also have significant ramifications for the dollar.


Revival of stock market rally and M&A flow
A strong revival in the US equity markets coupled with a continued rebound in M&A activity could fuel renewed interest in US assets. Despite impressive returns this year of 29% and 52% for the Dow and Nasdaq respectively, the weak dollar has deterred foreign investment. Returns in the FTSE (25%), DAX (44%) and Nikkei (28%) have been equally impressive. A continued US economic recovery could accelerate the gains in the both the Dow and Nasdaq, which sooner or later will become too attractive for foreign investors to ignore. Once foreign investors realize that they are grossly underweight US equities, a sharp acceleration in accumulation and readjustment of portfolios could prompt a strong surge in the US dollar. Continued cross border M&A flows could also fuel a reversal in the US dollar.

FX Intervention by Fed or ECB
Intervention by the Federal Reserve or the ECB to halt the decline in the dollar or curb the rise in the Euro could prompt a sharp acceleration in the dollar. In fact, intervention by either of these central banks would relay a strong message to the market and has the potential to significantly reverse the dollar’s decline. Although the market discounts the effectiveness of intervention by the Bank of Japan and uses BoJ intervention as an opportunity to sell at better levels, intervention by the Federal Reserve and the European Central Bank (ECB) is different because both central banks rarely choose intervention as an option. The last time the Fed and the ECB intervened was in November of 2000 when they bought euros and sold dollars below the 0.90 level. Complaints are beginning to filter in from Eurozone officials, beginning with Dutch CB Wellink, ECB Quaden, Bundesbank Recker and EU Prodi. Although the head honchos such as Trichet, Issing and Welteke have been very vocal about their comfort with the Euro’s current move, a continuation of the acceleration in the Euro will eventually force them to shift gears as well. A recent article by Market News gives a hint of where the ECB’s comfort level is as it reports that conversations with ECB sources revealed that, "they did not expect the ECB would consider intervening unless the euro-dollar rate rose to around $1.35, near the all-time highs of the "synthetic" euro prior to 1999." Regardless, if and when the Fed or ECB chooses to intervene, the dollar would be expected to have a sharp reaction.


More flexibility in Chinese Yuan
Although the Chinese government remains committed to their decade-old tight trading band, many economists are calling for an end to Yuan peg in 2004. A complete revaluation of the Yuan may be a bit too optimistic, but a widening of the trading band could be likely. China’s top economic planner has already warned that a sharp revaluation of the Yuan could cause global instability and thwart China’s growth. However, inflationary pressures are growing with inflation accelerating 3% in November, which is its fastest pace in six years. Pressure from foreign governments such as the US have also yet to dissipate, which means that increased efforts by the manufacturing industry and its advocates to pressure the US government to force a revaluation, may prompt China to find a mean to appease its trade partners. Increased flexibility in the Chinese Yuan however, would certainly mean an upward revaluation of the Yuan. A decision by the Chinese government to widen their trading band could prompt an accelerated decline in the US dollar, particularly against the Japanese Yen.

Mutual scandals
Corporate scandals have been plaguing the US equity markets since 2001. If the abundance of mutual fund scandals increase and receive enough press, not only would it deter foreign investment, but could force current foreign investors to retract their funds. The possibility of mutual fund scandals is not completely improbable. In fact, six stock funds have already been named in trading probes, prompting a $21.3billion collective outflow. Scandals can stem from extra incentives offered to brokers to sell their funds, undisclosed fees in annuities or other products and manipulating/ignoring their own trading rules. As the government increases their crackdown on the financial industry, an upsurge in mutual fund scandals can have significant negative ramifications for the dollar.

Acceleration in Eurozone growth
A surprising acceleration in Eurozone growth above and beyond current expectations could prompt a renewed rally in the Euro. Eurozone growth is currently excepted to accelerate from 0.5% in 2003 to 2.5% in 2004, while US growth is expected to accelerate from approximately 3.0% to 4.4%. An expansive monetary policy and the global economic recovery should help to spur Eurozone growth. Unfortunately, this is the least likely scenario given that the strength in Euro has been and will continue to hurt foreign demand.

Daily FX Research Team
Kristian A. Kerr
Kathy Lien
Francois Nembrini
Gary Fischer
Forex Capital Markets LLC
+212 897 7660
Email Address: sales@fxcm.com


syr :rolleyes:

04.01.2004, 11:36
The dropping knife

December 29, 2003

One thing is beyond dispute: The US economy seems to be booming - while the dollar keeps falling. The obvious question is: how long can this go on before the falling dollar will kill the economic recovery?

The answer: It doesn't matter.

What kind of an "answer" is that?

It's the only truthful one. The only thing that matters is to realize that the dollar will not stop falling. The rug is out from under it. The support structure is simply gone. If there ever was a reason in the ordinary investor's mind to buy back into the dollar, it would be the current run-up in economic figures here in the US.

Instead, they are selling.

If there was ever a reason for investors to get out of a brand new- largely untested designer currency like the euro, it would be the recent double-fiasco of a breakdown of the euro area's growth and stability pact, and the euro nations, dismal failure to procure ratification of their much ballyhooed constitution.

Instead, they are buying the euro.

But this is not an article about why the dollar will keep falling. That subject has been dealt with at length in virtually every other euro vs dollar, article published online, and in even more detail in every issue of the Euro vs Dollar Currency War Monitor. This article is about what to do once you realize that this drop won't stop.

If you realize that, you immediately know that, at some point, the falling dollar will kill the recovery - which really is the only thing worth knowing. How long it takes, time-wise, before that happens is rather irrelevant.

What's the difference whether it will happen tomorrow, three months from now, or maybe in a year? The only diffference that makes is that it determines how much time you have left to prepare for that event - if you are wise enough to prepare!

Too many Americans have no idea whatsoever that this threat even exists.

Well, actually it's even worse than that.

They know of the threat. They see it with their very eyes. The see the dollar dropping daily, to almost daily new record lows, while the economy is said to be recovering. But they just sit there and say to themselves: "Bah, humbug! It won't be that bad. The dollar will stabilize. Not to worry."

Have you ever accidentally dropped razor-sharp kitchen knife and saw it falling in the direction of your foot, with its point downward? What did you do? Before you could even think, you instinctively dropped everything and made damn sure your foot wasn't there anymore when the knife hit the ground - didn't you?

Well, it seriously looks like the "American investor" has lost all survival instincts, all sense of self-preservation.

Our investing friend sees the knife dropping, point forward toward his foot, and he just keeps his foot in place, saying to himself: "Ah, so what! Not to worry. The knife will stop dropping. It won't hit my foot. Al Greenspan isn't going to let that happen. The government will surely do something about that."

Better hope you got a first-rate first-aid kit very close by, my friend, 'cuz that ol' foot a' your'n gonna be nailed to the ground in just a fraction of a second.

It all seems insane, but one can perhaps understand the motivation behind such self-mutilating lethargy. Most US investors are baby- boomers. They have lived it up and spent their way all throughout the eighties, never saving a dime.

Then came the nineties. They suddenly realized they are getting older, despite being the "hip" generation, seeing their retirement age approaching in ten or twenty years, knowing they have nothing to fall back on. So they shoved whatever they had into the ballooning stock market, even going into hock to pump up that old 401k.

Since they were "hip" they all invested into the hippest stocks around, which were - of course - the Nasdaq's tech stocks. Then they got burned, and burned bad. Nasdaq dropped from 5000 all the way down to 2000, and beyond.

They complained.

Then 9-11 happened, and the Dow dropped 700 points in a day, only to pop right back up in a matter of a few weeks and months, then slowly subsiding again until late 2002 when the recently deceased stock-bubble slowly began to reincarnate. Of course, the fact was lost on many Americans that this was more of a botched-up Frankenstein-job than a true reincarnation, but that's beside the point.

This second coming of the stock-messiah, the savior of their retirement portfolios, was greeted with great enthusiasm for, after all, how else were they going to get their 401ks back on target?

So they threw their last shirt at the market, and even borrowed more shirts to throw at it. The re-fi boom meanwhile had gotten into full swing, thanks to Uncle Al's cranking of the printing presses and the resulting 50-year low interest rates - and here we are.

Americans feel they've simply got to invest - or they will greet their retirement years like Jimmy the Cricket: out in the snow, with no more shirts to wear.


If only our investing friends could realize that the dollar-rug has long been pulled out from under this stock-market miracle on Wall Street. If only they could understand that the very foundation of the American miracle-economy, the unbacked fiat dollar, was a all but a trap-door from the very beginning - and that this trap-door has now swung wide-open.

If only they could see that the only thing that is now preventing this American "body economic" from falling through the trap-door and hitting the ground underneath is the international reserve-dollar noose that's tightly slung around the economy's neck.

If only they could get themselves to comprehend that Al "Robin Hood" Greenspan isn't going to come riding in on a horse to shoot a magic arrow through that paper-rope so that a soon to be free-falling paper economy at least won't hang by its neck until death.

If only our retirement-conscious compatriots could realize that it is not stocks and paper-assets that will save their asse(t)s for their golden years, but gold itself - the very thing they have learned so thoroughly to disdain during their investing lifetimes.

But wishful thinking isn't going to make things happen. It's just like Rudyard Kipling wrote in his poem "The Gods of the Copybook Headings:"

As it will be in the future, it was at the birth of Man —
There are only four things certain since Social Progress began —
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wobbling back to the Fire —

The American Investor is about to stick his finger right back into the flame that scorched it only four years ago.

The lure of easy money, a misguided trust in government bureaucrats, and a failure to remember lessons past are inviting another catastrophe. The problem is that catastrophes have a tendency to come our way even if we don't invite them. How much more likely they will be to come with our invitation surely is a frightening prospect to entertain.

The knife has yet to complete its downward trajectory. If you are fully invested in paper-assets, this would be a most opportune moment to consider moving your lower extremity.

Just don't "consider" for too long!

Alex Wallenwein
December 29, 2003

Quelle (http://www.321gold.com/editorials/wallenwein/wallenwein122903.html)

syr :rolleyes:

06.01.2004, 17:25
noch eine Notenbank mit im Spiel.....

Banks selling dollars actively

RBC, 06.01.2004, Moscow 15:32:44 . The trade volume of deals with tomorrow settlements exceeded $700m at the UTS at 15:00 Moscow time, while at 13:00 about $340m were sold at a special session. One of the main reasons for this accelerated selling of US currency is a further retreat of the dollar rate against the euro on international exchanges. At the same time, this situation on the currency market has not led to the ruble's strengthening due to the Russian Central Bank's activities. Commercial bank dealers say that the Central Bank continues buying US currency at 29.245 RUR/USD . The Central Bank's ruble intervention is estimated at $700m some less than two hours before the UTS closing.


syr :rolleyes:

07.01.2004, 12:41
BOJ spent Y3 trln in intervention this week-source

Wednesday January 7, 4:01 am ET

TOKYO, Jan 7 (Reuters) - Japan, worried that a strong yen could hurt an export-led recovery in its economy, spent about three trillion yen ($28.3 billion) in the first two days of this week to hold the currency down, a market source said on Wednesday. That figure compares with some 20 trillion yen ($188 billion) spent on yen-selling currency market intervention in the whole of 2003. The source said the Bank of Japan, acting on behalf of the Ministry of Finance (MOF), sold about 2.6 trillion yen on Monday. Despite the massive intervention, the dollar (JPY=) hit a three-year low of 106.06 yen later that day.

About 400 billion yen was spent on Tuesday when the dollar touched a low of 106.09 yen, the source said.

In late Tokyo trade on Wednesday, the dollar was holding just above that level, at around 106.20 yen.

The Japanese authorities are thought by some analysts to be desperate to prevent the dollar from falling below 105 yen, since that would trigger heavy options-related selling of the U.S. unit, but traders say it is only a matter of time before it breaks through 106 yen.

In a move to secure more intervention funds, the MOF announced last month that it would raise the borrowing limit on its currency intervention account to 140 trillion yen in the fiscal year starting next April from 79 trillion yen.

As a stopgap measure to avoid a funding crunch before parliament approves the raising of the borrowing limit, the ministry has arranged a repo deal with the Bank of Japan in which it can get funds by selling foreign bonds to the central bank, buying the paper back at a later date. ($1=106.18 Yen)

spent about three trillion yen ($28.3 billion) in the first two days of this week to hold the currency down :rofl

syr :cool:

08.01.2004, 08:18
06:49 08.01.2004

IWF warnt vor abruptem Kursrückgang des Dollars

Der Internationalen Währungsfonds (IWF) warnt, dass der Dollar rasch abstürzen könnte. Hintergrund sind das die hohen Defizite in Haushalt und Leistungsbilanz der USA. Ein solcher Rückgang wäre Gift für die Konjunktur rund um den Globus.




08.01.2004, 14:56
da passt irgendwie doch auch noch folgende meldung von heute dazu:

Ein starker Euro ist im Interesse Europas, dies sagte der Bundesbank-Vizepräsident Jürgen Stark im Interview mit der Tageszeitung "Die Welt". Er räumte jedoch ein, dass der Wechselkurs ein potenzielles Risiko für die weitere wirtschaftliche Erholung darstellen könnte, wenn sich die Geschwindigkeit und das Ausmaß der Euro-Aufwertung fortsetzt. Denn jeder Wechselkursanstieg ziehe einen Verlust an preislicher Wettbewerbsfähigkeit mit sich. Stark fügte jedoch hinzu, dass in Deutschland knapp 50 % der Exporte in das Euro-Währungssystem gehen. Deshalb sei die Bundesrepublik nicht mehr so stark von Wechselkursschwankungen betroffen als noch zu D-Mark-Zeiten.

© BörseGo


08.01.2004, 20:56
2:32pm 01/08/04

Merrill sees U.S. dollar falling 10% in 2004

By Tomi Kilgore

NEW YORK (CBS.MW) -- Merrill Lynch chief foreign exchange strategist Yianos Kontopoulos expects the dollar to decline 10 percent on a trade-weighted basis in 2004, and continue to overshoot to the downside in 2005. Structurally speaking, he feels the dollar was still "significantly overvalued." On a cyclical basis, he believes the redistribution of global growth will "extend the adjustment in currency markets into 2005." The dollar index, a trade-weighted average of six major currency pairs, was last down 0.8 percent 85.55, just above a near seven-year low of 85.37 hit in intraday trading on Tuesday. Since the end of 2002, the index had fallen 16 percent.


syr :rolleyes:

09.01.2004, 07:10
Sodele, nun hat die Bank of Japan nach 3 Tagen "Yen einfrieren" den grossen Hammer herausgeholt. Ein Bildchen für die Gallerie :hihi:

09.01.2004, 10:44
Japan to sell Treasuries for intervention - Nikkei

Reuters, 01.08.04, 1:39 PM ET

NEW YORK, Jan 8 (Reuters) - Japan plans to sell several trillion yen worth of U.S. Treasuries as early as next week to make cash available for its massive dollar buying intervention, Nikkei's Nihon Keizai Shimbun Friday edition reported.

The reported sale of Treasuries appears to be a stop-gap measure for the Japanese Ministry of Finance to bolster its foreign exchange account until new legislation, due in late January, provides them with more cash for intervention.

The Nikkei report said the government would buy back the bonds later in such a manner that the central bank will not suffer any losses from the arrangement.

Japan has intervened frequently in recent months in an effort to stop the yen from rising against the dollar with the hope of protecting its fragile export sector.

On Dec. 26, the MOF, in an effort to quell speculation it would run out of cash to intervene, said it could now raise funds by selling up to 10 trillion yen (about $94 billion) worth of foreign bonds -- namely U.S. Treasuries -- to the Bank of Japan in the form of repurchase agreements, Reuters reported.

But at the time of that announcement, a MOF official said this deal with the BOJ was just a precautionary measure as the authorities still had ample funds.

Now, according to the Nikkei report, it appears the MOF does not feel comfortable with the cash levels in its foreign exchange account.

The reported move comes just a few weeks after the MOF's announcement that it would raise the legal ceiling for its issuance of short-term bills for its foreign exchange account.

The increase in the MOF's borrowing limit, spelled out in the draft budget for fiscal 2004/2005, would not be formally legislated until late January, and this decision to sell Treasuries to the BOJ is seen as a stop-gap measure.

A market source told Reuters on Wednesday that Japanese authorities spent three trillion yen in the first two days of this week alone in order to keep the greenback from sliding below the 106 yen <JPY=> level. The dollar fell briefly below the 106 yen level on Wednesday.

Nikkei reported that after this yen-selling operation, the the government has spent all but 1 or 2 trillion yen of the 79 trillion yen in funds budgeted for foreign-currency market interventions for fiscal 2003.



10.01.2004, 15:31
Der Herr Niquet auf Wallstreet-Online empfieht Dollarkäufe jetzt zur Rentensicherung in ein paar Jahren. Nunja, wer sich selbst Schaden zufügen will, nur zu. Historisch gesehen kann man dabei allerdings nur verlieren. Je länger der Anlagehorizont, je mehr Verluste dürften resultieren :p......


syr :cool:

13.01.2004, 17:25
OPEC mulls move to euro for pricing crude oil

Monday, Jan. 12, 2004

Globe and Mail Update

Calgary — OPEC is considering a move away from using the U.S. dollar — and to the euro — to set its price targets for crude oil, the highest-profile manifestation of the debilitating effect of depreciation on the greenback's standing as the currency of international commerce.

Several members of the Organization of Petroleum Exporting Countries are seeking formal talks on using the euro, as well as the U.S. dollar, when determining price targets for crude, a senior oil minister within the cartel said Monday. “There are countries that are proposing this,” Venezuela's Oil Minister Rafael Ramirez said in Caracas. “It's out there, under discussion.”

Mr. Ramirez did not specify which OPEC members are pushing the proposal, but much of the impetus is believed to come from Persian Gulf producers.

They have seen their purchasing power in Europe pinched as the U.S. dollar loses ground against the euro — including touching a record low Monday.

Any move to water down the use of the U.S. dollar as the currency would have enormous symbolic impact, said one prominent Canadian energy analyst.

“On a symbolic level, I think it's huge, not only for what it says about the U.S. dollar, but also the implied change to the nature of energy trading worldwide in the future,” said Wilf Gobert, vice-chairman of Peters & Co. Ltd.

Beyond the blow to the greenback's prestige, a move by OPEC to even partly price in euros would ensure that any further depreciation in the U.S. dollar boosts oil prices, Mr. Gobert said. And any country — not just the United States — using the U.S. dollar for pricing would see the cost of the commodity rise as that currency fell.

Indeed, while OPEC has yet to make any formal break with the U.S. dollar, its refusal to boost output has already offloaded much of the cost of the dollar's depreciation on to the American economy. Mr. Gobert said oil prices at the end of last month, about $32 (U.S.) a barrel, would have been much lower if not for the decline in the value of the U.S. dollar over the past 24 months. Using the exchange rates of the dollar versus the euro two years ago, crude would be selling for $22 a barrel instead, he said.

All of the oil prices used in OPEC's benchmark index, or basket, are currently denominated in U.S. dollars.

The cartel uses that index as the basis of its price-band policy, whose stated intent is to adjust output so the basket hovers within a $22-to-$28 range.

Oil prices have lingered well above that maximum for 26 consecutive trading sessions, which in theory means that OPEC should have increased its output by 500,000 barrels a day to lower prices. But the cartel has ruled out doing so before its regularly scheduled meeting on Feb. 10, arguing that it is the depreciation of the U.S. currency — not a lack of supply — that is fuelling the rally in crude prices. Monday, crude for February delivery rose 41 cents to $34.72 a barrel on the New York Mercantile Exchange, a 10-month high.

Mr. Gobert said he believes it is unlikely that OPEC will opt for a formal split with the dollar, although the cartel may very well accomplish the same effect by raising its price band, he added.

But he said that OPEC's musings about adopting the euro are part of the increased chatter about the rising value — and influence — of the five-year-old currency among commodity traders and analysts.



13.01.2004, 18:10


14.01.2004, 20:54

Japan urges the US to curb deficits

By David Pilling and Barney Jopson in Tokyo
Published: January 14 2004 4:30 | Last Updated: January 14 2004 12:37

Sadakazu Tanigaki, Japan's finance minister, on Wednesday urged the US to take steps to repair its twin trade and fiscal deficits, saying that concern over the two was driving the dollar lower.

Mr Tanigaki said the twin deficits were undermining faith in the US currency. “It is being said that this is a concern linked to the foreign exchange rate,” he said in unusually direct remarks about the US economy. “If that is the case, efforts may be needed to improve that.”

Japan has intervened massively in foreign exchange markets to try to stop the yen appreciating against the US currency, but with limited effect. Last year, it spent a record Y20,000bn, three times the previous high, but failed to hold the yen at Y115 to the dollar. The yen was trading at around Y106.26 to the dollar on Wednesday.

Intervention has continued this year with the finance ministry taking the view that a rapid appreciation of the Japanese currency could choke off still-fragile economic recovery.

Some government officials have privately voiced concern over the limit to the effectiveness of constant intervention. “We can't continue this intervention policy indefinitely,” said one official. “But if we stop now the yen might soar. It's a catch-22.”

Japan's intervention policy remained unchanged, Mr Tanigaki said. “We will take timely and appropriate action against overshooting,” he said.

He also said Japan should make more effort to boost domestic demand. Japan's long, but fairly shallow, economic recovery has been spurred by exports and by capital investment from export-oriented companies.

Figures released on Wednesday on November’s trade showed a 33.8 per cent leap in Japan's current account surplus from a year earlier to Y1,496bn. But it is largely due to a 5.4 per cent fall in imports, which fed worries about weak household consumption.

Peter Morgan, economist at HSBC, said import destinations were divided roughly “half and half” between companies and consumers.

With corporate investment on the rise, the fall in imports suggested a fall in household spending, dashing hopes that consumers could step in to broaden the base of the economic upturn.

The surplus rise concealed a 1.8 per cent fall in overseas shipments, although the government attributed it to a sharp spike in exports in November 2002 following the end of a US port strike.

Ryo Hino, economist at JP Morgan in Tokyo, said: “Exports are reflecting growth in global demand. There is no sign of a slowdown.”

Separate data released on Wednesday showed machinery orders, an important indicator of capital spending, fell 7.8 per cent in November from the previous month. The drop followed a surge in machinery orders in October but economists said corporate capital spending did not appear to have lost momentum, and was still on track for a significant increase in the October-to-December quarter.



14.01.2004, 21:01
Posted: 14 January 2004 2022 hrs

Euro slides as alarm bells ring at ECB

LONDON : The euro skidded lower against the dollar after a senior European Central Bank official joined a growing chorus of concern about recent currency swings.

The euro gave back some recent gains against the dollar amid growing signs that alarm bells are ringing at the ECB about the pace of the currency's rise.

ECB governing council member and Bank of France governor Christian Noyer said in a televised interview that "brutal changes and excess volatility in the major currencies are not good for global economic growth".

"We'll remain attentive and vigilant to any (currency) moves," he said, while adding the ECB's main task remained to promote price stability.

Analysts noted that the remarks were more forceful than the comments last week of ECB president Jean-Claude Trichet, who said that although the surging euro could hit eurozone exports, any effect should cushioned by improved global demand.

"Noyer's comments at the least indicate that the ECB is getting more concerned than last Thursday's comments from Trichet suggested," said Michael Klawitter, currency strategist at WestLB.

Trichet himself also appeared to harden his tone on Monday when he told reporters at the end of a G10 meeting in Basel that "excessive volatility and brutal moves (in exchange rates) are not welcome."

Taken together, the comments were a clear indication from the ECB that it shares the concerns of many European political leaders about the soaring euro, economists said.

"The fact that European central bankers have now joined politicians in regularly commenting on euro appreciation has served to at least moderate the gradient of the dollar's decline," said Steve Pearson, strategist at HBOS bank.

Dealers were also mulling comments from US Federal Reserve chairman Alan Greenspan playing down concerns about the big US current account deficit.

Responding to a question about the huge US current account deficit after a speech in Berlin on Tuesday, Greenspan said that "if no measures are taken to adjust the deficit, the market will do it."



20.01.2004, 19:31
What, We Worry? Yes.

By William H. Gross
Tuesday, January 13, 2004

The United States is overextended, not just militarily but economically. We are trying to do too much, borrow too much, spend too much, and sooner or later we will have to suffer the consequences. We are a country in the beginning stages of what can best be described as hegemonic decay. Empires take decades if not centuries to wither, a process more clearly viewed through a rearview mirror; Edward Gibbon's masterful account of the decline and fall of the Roman Empire is perhaps the greatest example of this truth. But here and now, we're much less inclined to Gibbon's viewpoint than we are to Alfred E. Newman's. "What, we worry?" is pretty much the national motto when it comes to our finance-based economy and its future prospects.

Let me approach this predicament from a more personal angle -- by comparing a large nation to a typical U.S. family. Pretend that you're a head or co-head of a household. You earn a good salary, but it never seems to be enough. There are bills to pay, the Joneses to keep up with, and you've had your eye on that goofy Hummer for at least a few months now. You'd like to save money, but you can't or you won't, so you don't. As a matter of fact, each year for the past decade or so you've had to borrow 4, 5, 6 percent of your annual income to pay for what you want. You're running a personal deficit. But that's still okay, you figure. You're strong, vibrant, prospects are good, and there's no way you shouldn't be able to handle it. You can grow your way out of current liabilities and have more than enough to pay for future obligations such as college for the kids, that faraway retirement for you and your spouse, and health care, if that should ever come up. And your creditors undoubtedly will see it the same way. They know a good risk when they see one.

But then something happens. Your company's prospects sour, your pay raises virtually vanish, your health deteriorates, your family life sours -- who knows? With no savings and a boatload of debt, the wheels all go into reverse. Creditors are not so friendly. Not only will they not lend you that 6 percent of your salary every year but they want a higher interest rate on what you've already borrowed.

The United States is strikingly similar to the Alfred E. Newmans just described. It's strong and vibrant, with a future seemingly as bright as that of any country on the planet. Productivity is soaring, markets are recovering, its salary (or gross domestic product) shows decent increases almost every year. It goes wherever it wants to go, its Humvees symbolic of global military domination. Where's the decay in this hegemony?

Well, maybe I'm just pessimistic because I'm a Californian, and currently the state of California is not good. But California is 15 percent of this country, and it's a trendsetter in more ways than fashion, Hollywood and tongue rings. It has a huge deficit based on overspending that was in turn based on the anticipation that booming financial markets and their capital gains would continue indefinitely.

The United States is in a similar predicament. For years Americans have wanted to save money, but the savings rate has hovered close to zero. They have depended on those 1990s capital gains to give the impression that their liquid assets were on the rise. And they have had to borrow 4, 5, 6 percent of their annual income (GDP) to pay for what they wanted. Economists call that the trade deficit.

Add to that new evidence that our government's budget deficit is hitting new highs, with few prospects for improvement as President Bush and his economic team claim this is an investment in America, and after all, "we owe it to ourselves." Such nonsense belongs in Mad magazine. The $450 billion is paying for overconsumption, for Hummers in L.A. and Humvees in Iraq, and we increasingly owe it to foreign creditors. "I.M.F. Warns That U.S. Debt Is Threatening Global Stability," read a front-page headline in the New York Times last week. It is plain for all to see that we are living beyond our ability to pay if things go awfully wrong.

Could they? Typically, the spending-savings discipline necessary to right such a fiscal ship has to come from the outside. It's the creditors who say no. And their discipline has already started. Bond market vigilantes have suddenly recoiled in horror at the U.S. budget deficit and the failure of the Fed to guarantee its funding at exorbitantly low interest rates. In turn, foreign creditors have for more than a year been liquidating dollars in favor of other countries' currencies.

But despite the resultant higher interest rates and cheaper dollar these actions imply, our country's economy appears to be chugging right along. So where's the big, bad wolf in this story? Well, in addition to future domestically induced bond market sell-offs destroying the housing market, and a finance-based economy inexorably slowing down as restrictively higher yields work their historical magic, the fulcrum of a future creditor-based revolt probably rests in Beijing rather than in New York or Washington.

Because China's monthly trade surplus of $10 billion-plus with the United States implies a $120 billion annual addition to its dollar reserves, there will come a time when its hundreds of billions in holdings of U.S. notes and bonds look a tad too risky. In turn, the hundreds of billions that Japan and other Asian countries have been buying to keep their currencies competitive with the Chinese yuan and the U.S. dollar will be subject to a sanity check as well. At some point our Asian creditors will wake up and smell the coffee. Perhaps there will be dollar or Treasury note sell-offs or a revaluation of the yuan and then the yen. In any event, we pay the price: higher import costs, a cutback in spending on cheap foreign goods, rising inflation, perhaps chaotic financial markets, a lower standard of living.

China's willingness to buy our bonds, and its philosophy of fixing its currency to the U.S. dollar, will one day be tested. And should it lose patience, all its neighboring Asian states will move in near unison. U.S. interest rates will rise, our goods in the malls and the showrooms will be less affordable, and the process of national belt tightening and increased savings will have begun.

Are the Newmans worrying yet? Not if they bought stocks six months ago. Not if they refinanced their home in early June or bought that Hummer with zero-percent financing.

But they will.

The writer is founder and managing director of Pacific Investment Management Co. (PIMCO).


syr :rolleyes:

21.01.2004, 15:04
Euro Surges as EU Ministers Signal They Won't Sell Currency

Jan. 20 (Bloomberg) -- The euro had its biggest advance against the dollar in two months after European finance ministers and central bankers signaled they aren't close to selling euros to stop the currency's appreciation.

The euro climbed more than 2 U.S. cents after Irish Finance Minister Charlie McCreevy, who headed the group's monthly meeting late yesterday, said they had ``no view'' on how to stem the currency's gain. European Central Bank Chief Economist Otmar Issing said he's concerned about ``excessive movements'' in the exchange rate, repeating comments from last week.

``It's a lot of rhetoric, and they don't seem ready to take action now,'' said Grant Wilson, a trader at Mellon Financial Corp. in Pittsburgh, which manages $625 billion in assets. ``They started to raise the flags once the euro got to $1.29 and that tells the market that the level to look for is $1.30.''

The euro surged to $1.2584 at 5 p.m. in New York from $1.2349 late yesterday, according to EBS prices. The currency rose as high as $1.2597 for its biggest daily percentage gain since April 2001. The euro strengthened to 134.70 yen from 132.45, the biggest increase since September, after the Bank of Japan unexpectedly added cash to the economy. The yen traded at 107.05 per dollar from 107.25.

The BOJ decision, predicted by just one of 15 economists polled by Bloomberg News, is part of an effort to help slow the yen's gain against the dollar and the euro in the past year, and to protect exports, said Hans Guenter Redeker, head of currency strategy at BNP Paribas SA in London.

``The decision was based on the state of the economy and the condition of the stock and currency markets,'' Heizo Takenaka, minister for economic and fiscal policy told reporters in Tokyo.

Dollar Slide

In other trading, the dollar fell the most in almost nine years against the British pound and had its biggest drop versus the Swiss franc since December. Canada's dollar rose even after the central bank cut its benchmark interest rate by a quarter percentage point to 2.5 percent. Gold prices rose.

European Commission President Romano Prodi said the euro's surge is hurting exports.

``These effects, that are not only a euro increase against the dollar but against all world currencies from the current point of view, are maximizing the difficulties'' for exporters, Prodi told Bloomberg News yesterday in a televised interview.

French Finance Minister Francis Mer told reporters today that his main worry is ``volatility and the acceleration up and down'' in the currency. ``We want to have a stable rate.''

``Ministers effectively gave the green light for the euro to climb steadily, not rapidly, back to $1.30,'' said Steve Pearson, chief currency analyst in London at HBOS Treasury Services Plc.

German Confidence

The euro rose even as German investor confidence fell in January for the first time in three months. The index by the Mannheim-based ZEW economic institute slipped to 72.9, below the median estimate of 36 economists surveyed by Bloomberg News.

Germany's recovery from recession in the third quarter may be damped as the euro's 17 percent appreciation against the dollar in the past year crimps earnings of exporters including Volkswagen AG. Germany accounts for almost a third of the euro economy, which also recovered in the third quarter.

Irish Finance Minister McCreevy said ``there was no view'' on how the EU might stabilize currency markets after the dozen euro-region ministers called for ``stable'' exchange rates in a joint statement with the ECB. Excessive and quick exchange-rate moves are something that finance ministers and central bankers ``never want,'' he said.

``The euro's move is a reflection of their lack of conviction,'' said Mitul Kotecha, global head of currency strategy at Credit Agricole Indosuez in London. ``They could have made the prospect of some form of intervention more likely.''

The ECB has never sold euros to stem the currency's appreciation. The bank bought euros in the foreign-exchange market in 2000.

`Old Strategic Outlook'

The dollar rose 3.4 percent against the euro last week after European officials discussed the prospect of a rate cut or currency sales to weaken the euro. ECB council member Christian Noyer said selling euros is an option that's ``always available.'' Italian Deputy Finance Minister Mario Baldassarri said on Friday that lower rates or sales would help protect exporters.

Jason Bonanca, a currency strategist at Credit Suisse First Boston in New York predicted the euro will extend its gains to about $1.30 within three months.

``I don't think the ECB would seriously contemplate intervention without backing it up soon afterward with a rate cut,'' Bonanca said. ``We're left with the same old strategic outlook'' for the dollar, ``we're still in a weak dollar trend.''

BOJ Policy

In Japan, the BOJ policy board decided by a majority to raise the upper limit of the reserves it makes available to commercial banks to 35 trillion yen ($326 billion) from 32 trillion yen, the central bank said in a statement.

Japan's interest rate is near zero. The ECB kept its benchmark rate at 2 percent this month, twice the level of the Federal Reserve's target rate. Traders and strategists said Japan's step may do little to pull down the Japanese currency.

``There's no doubt the yen is going to appreciate in the long run, but they are trying to hold it back,'' said Redeker at BNP Paribas.

The yen last year gained 11 percent against the dollar, compared with a 20 percent advance for the euro, as Japan sold record amounts of its currency. Japan sold more than 6 trillion yen this month, more than a quarter of last year's total of 20.1 trillion yen, the Yomiuri newspaper yesterday reported.

Last Updated: January 20, 2004 17:06


syr :rolleyes:

21.01.2004, 15:25
ECB's Wellink Says Rate Cut Wouldn't Halt Euro Gains

Jan. 21 (Bloomberg)

European Central Bank council member Nout Wellink said an interest rate cut wouldn't halt the euro's gains against the dollar and he sees no need for finance ministers from the Group of Seven countries to act on exchange rates.

In foreign exchange markets, ``the forces at work are much stronger and can't be neutralized by a minor change in rates. This is not the instrument,'' Wellink said in an interview at the Dutch central bank in Amsterdam, which he heads.

``There is no need to take special measures'' when finance ministers from the G-7 countries meet in Florida next month, Wellink also said. ``At this very moment, there is not an extraordinary situation that we should address.''

Concern the euro's appreciation may undermine an export-led recovery prompted politicians including German Economics and Labor Minister Wolfgang Clement to urge a cut in interest rates. Such a move, they say, would slow the currency's gains and help European companies deal with the impact of the euro on their exports. Exports account for about a fifth of Europe's economy.

Wellink's remarks echo comments by Bundesbank council member Edgar Meister, who said in a separate interview with Bloomberg News that he sees no need for the ECB to sell the currency or cut rates to slow its appreciation. The euro had its biggest advance against the dollar in two months yesterday after European finance ministers ended a meeting with ``no view'' on how to stem gains in the currency that risk hurting the economy.


Wellink said it was ``important'' that the euro didn't gain further after Trichet's statement, which was made at a meeting of Group of 10 central bankers in Basel earlier this month. Still, he said, the euro's appreciation so far hasn't been ``excessive'' and won't stop the region's recovery.

The euro's 17 percent appreciation against the dollar since the start of September ``is on the high side, but my feeling is it's not excessive,'' Wellink said. Trichet's statement that the ECB is concerned about `` brutal moves'' in the exchange rate was ``a general remark. The statement was not that there is, at this very moment, excessive volatility in the market,'' Wellink said.

The ECB on Jan. 8 left its benchmark lending rate at 2 percent, the lowest in any euro country since at least 1946. The rate is still twice as high as the U.S. Federal Reserve's main rate, making the euro-denominated investments more attractive.

`Bit More Difficult'

The euro's appreciation ``makes life for exporters a little bit more difficult,'' Wellink said. Still, ``in the somewhat longer term -- a period of one to two years -- the impact on GDP growth is more or less zero,'' provided the euro rises at a pace slow enough to allow companies to adjust.

``So I would not give in to the desire of that minister in Germany,'' he said, referring to Clement. ``Rates are really low enough.''

Investors have scaled back expectations the ECB may raise rates any time soon, as the euro's appreciation threatens to slow export growth and helps keep inflation in check. The yield on the three-month Euribor futures contract for June settlement dropped to 2.07 percent in Frankfurt, from 2.38 percent two months ago. The money market rate is 2.08 percent.

Reluctant to Sell

ECB policy makers may be reluctant to sell euros to slow the currency's gain as long as other countries aren't willing to support it. Bank of Japan Governor Toshihiko Fukui has said the dollar's drop is ``a U.S. problem, not ours.'' Fed Chairman Alan Greenspan said the U.S. is able to fund its current account deficit with few consequences for the global financial system.

Asked if the U.S. or Japan signaled support for Europe at the G-10 central bankers meeting, Wellink said ``we are not in a situation where we need support.'' Greenspan's assessment is ``right,'' he said. ``It is still an orderly adjustment process. And it shouldn't become a disorderly process.''

The euro has gained more than other currencies against the dollar, because countries including China and Japan have pegged their currency to the dollar or sold it to stop it from gaining too much. G-7 finance ministers in September, trying to ease pressure on the euro, urged more flexible exchange rates globally. The euro has gained more than 11 percent since that statement.

The statement, made in Dubai, ``was misinterpreted as a call for overall flexibility, that is to say, it was also interpreted as the need to adjust the bilateral rates between the dollar and the euro,'' Wellink said. In Asia, ``no changes yet have until now appeared'' as a reaction to the Dubai statement, he said.


syr :rolleyes:

23.01.2004, 10:27
Aus der FTD vom 23.1.2004

Bushs Defizit bedroht Aufschwung

Von Thomas Fricke, Davos

Die drastisch gestiegenen Budgetdefizite der US-Regierung sind zu einem der größten Risiken für den globalen Aufschwung geworden. Diese Einschätzung äußerte der bisherige Chefökonom des Internationalen Währungsfonds (IWF), Kenneth Rogoff.


syr :rolleyes:

27.01.2004, 13:51
Yen Gains; Tanigaki Signals Japan May Let Currency Appreciate

Jan. 27 (Bloomberg) -- The yen rose for a fifth day in six against the dollar in London after Finance Minister Sadakazu Tanigaki suggested Japan may allow its currency to gain before a meeting of Group of Seven ministers in Florida next month.

Selling yen is ``intended to avert speculative market moves and excessive moves of foreign exchange rates,'' Tanigaki told the budget committee of the lower house of parliament. ``We can neither maintain specific levels of the yen nor guide the currency cheaper. That is not our purpose.''

Tanigaki ``is trying to tread a little more softly ahead of the G-7 meeting,'' said Minoru Shioiri, foreign exchange manager in Tokyo at Mitsubishi Securities Ltd., a unit of Japan's second- largest bank. ``Europe is upset that the dollar's fallen more against the euro than the yen.''

Against the dollar, the yen strengthened to 105.90 at 11:19 a.m. in London from 106.38 late yesterday in New York, according to EBS prices. The yen also gained to as much as 131.97 per euro from 132.55. The pound fell on concern Prime Minister Tony Blair may today suffer his first legislative defeat today since he took office in 1997. Britain's currency weakened to $1.8076 from $1.8149, according to Bloomberg prices.

``Whether Blair wins or loses, his reputation has been damaged, his standing in the country will be damaged,'' Nick Parsons, a currency strategist at Commerzbank AG, said in a televised interview with Bloomberg News in London. ``It's hard to see an outcome which is positive for sterling.''

Criticism of Japan

Japan, which spent record sums last year slowing the yen's appreciation, is under pressure from European governments to let the yen rise more against the dollar. Tanigaki told reporters in Tokyo that the ministry's yen sales are not aimed at keeping the currency at a specific level.

The yen has climbed 11 percent against the dollar over the past year, about half the rate of the euro's appreciation. The European Central Bank hasn't attempted to steer the foreign- exchange market since late 2000, when it bought euros after the currency fell to a record 82.28 cents in October of that year.

Japan sold 20.1 trillion yen ($189.3 billion) last year, limiting the yen's advance. European officials including German Deputy Finance Minister Caio Koch-Weser last week criticized yen sales as shifting too much of the burden of the dollar's slide onto Europe. Exports account for a third of Germany's economy.

Blair Faces Defeat

Britain's pound is today the second-worst performing currency against the dollar among 16 currencies monitored by Bloomberg News.

One in four lawmakers in Blair's Labour party have threatened to vote against his plan to let universities set tuition fees. The ballot is scheduled for 7 p.m. London time today. The challenge to Blair coincides with the publication tomorrow of Lord Hutton's judicial report into the death of government weapons scientist David Kelly.

The pound pared some of its losses after the Guardian reported on its website that former minister Nick Brown will back the government. He had been a leading opponent of the bill.

``Sterling is weakening as the political tension builds,'' said Adam Cole, a currency strategist in London at Credit Agricole SA. ``The most negative scenario for sterling is that Blair's government stumbles on badly wounded.''

German Confidence

The euro rose to $1.2485 from $1.2460 after German business confidence unexpectedly climbed to a three-year high, suggesting executives in Europe's largest economy are optimistic they will overcome the effects of the euro's appreciation.

The Ifo institute's index of western German business sentiment increased to 97.4 in January from a revised 96.9 in December. Economists had expected confidence to be unchanged, the median of 40 forecasts in a Bloomberg News survey showed.

An interest rate cut ``is not an issue at the moment,'' European Central Bank board member Gertrude Tumpel-Gugerell said in a televised interview with Bloomberg News. ``The euro's appreciation has a damping effect. But we are confident that the positive forces will predominate.''

Japanese exports surged in December, rising 1.6 from the previous month, as the trade surplus widened 9.9 percent in December from November, government reports showed yesterday.

Merrill Lynch & Co., Morgan Stanley and J.P. Morgan Chase & Co. said they are considering raising their growth forecast for Japan as exports pick-up.

``The figures show a higher yen has not been negative for exporters'' and the Japanese are saying ``let's take a more relaxed view of the dollar-yen move,'' said Michael Klawitter, a currency strategist in London at WestLB AG, Germany's third- biggest bank. Klawitter predicts the yen will rise to 100 against the dollar in six months.

`Upped the Stakes'

Tanigaki's comments, along with comments from European officials expressing concern about the euro's rise, have ``upped the stakes that something quite meaningful could come out of next weekend'' when the G-7 meets, Jake Moore, currency strategist in Tokyo at Barclays Capital Inc., told Bloomberg News in a television interview.

The yen has fluctuated less in the past month against the dollar than other currencies including the euro, the British pound and the Swiss franc. A measure of volatility, or swings in price, for the yen was at 5.7 percent for the past 30 days, compared with 11.4 percent for the euro and the pound and 12.3 percent for the Swiss franc.

``These statements are becoming more newsworthy because everyone is very nervous before the G-7'' meeting, said David Bloom, a currency strategist at HSBC Holdings Plc in London, in reference to Tanigaki's comments. ``The slowing down of the dollar decline can be stemmed by politics.''

Last Updated: January 27, 2004 06:22 EST


syr :schaf:

30.01.2004, 18:37
Alan hat mal etwas Boden für den $$$ gelegt. Aber diesem Herr hier müssen sie ab sofort das Reden verbieten. Sonst wird das nichts :hihi:

12:09pm 01/30/04
Snow to take strong dollar message to G7
By Maggie McNeil

WASHINGTON (CBS.MW) -- Treasury Secretary John Snow repeated that the administration supports a strong dollar and that he would take that message to the upcoming G7 meeting in Florida. "Our message is always the same ... we support a strong dollar ," Snow told reporters on Friday when asked what the position of the U.S. would be at the meeting of financial ministers and central bankers from the world's leading industrial nations. In an earlier session with reporters following a meeting with economists, President Bush said the U.S. economy is strong and getting stronger, again urged Congress to make permanent his tax cuts, and pledged that he would cut the deficit in half in five years.

Und Japan verfeuert allein im Januar 1/3 vom gesamten Vorjahr:

5:22am 01/30/04
Japan spends $67 bln on currency mkts in Jan

By Emily Church

LONDON (CBS.MW) -- Japan spent a record of 7.1545 trillion yen, or around $67 billion in January to keep the dollar from sliding against the yen by intervention in the currency markets, Finance Ministry data showed, Reuters reported from Tokyo.

Mal sehen ;).


31.01.2004, 08:54
Aua, das schmerzt :schaf:......

01:30 31.01.2004
Weisses Haus rechnet mit Rekorddefizit von 521 Milliarden Dollar

Die US-Regierung rechnet im Wahljahr mit einem weitaus grösseren Rekorddefizit als bislang bekannt: Der Haushaltsplan, den das Weisse Haus am Montag öffentlich vorstellen wird, sehe für das Fiskaljahr 2004 ein Defizit von 521 Milliarden Dollar vor.

[sda] - Dies meldete die französische Nachrichtenagentur afp unter Berufung auf einen hochrangigen Mitarbeiter der US-Regierung. In einem am Montag vorgelegten Bericht war der Kongress noch von einem Minus von 477 Milliarden Dollar ausgegangen. Das Weisse Haus hatte die Schätzung noch am Montag als "übertrieben" bezeichnet.

US-Präsident George W. Bush werde ein Budget präsentieren, das "das Wirtschaftswachstum ankurbeln wird", sagte der Sprecher der Budgetabteilung des US-Präsidialamtes, Chad Kolton, der afp.

Mit dem Haushaltsplan würden nationale Aufgaben wie der "Kampf gegen den Terrorismus" und der Schutz der USA vor anderen Staaten finanziert. Das Weisse Haus strebt Kolton zufolge weiter eine Halbierung des Defizits in den nächsten fünf Jahren an.

Die Bush-Regierung hatte erst im vergangenen Jahr ein Haushaltsdefizit von 374 Milliarden Dollar eingefahren. Das war weit mehr als das bis dahin höchste Haushaltsdefizit im Jahr 1992 unter Präsident George Bush senior, dem Vater des derzeitigen Amtsinhabers.

Bush, der sich im November zur Wiederwahl stellt, steht wegen der explodierenden Neuverschuldung unter Druck. Trotz der angekündigten Defizitverringerung will er die massiven Steuersenkungen in Milliardenhöhe verlängern , die teilweise Ende des Jahres auslaufen.


Alan wird George lieben :rofl......


01.02.2004, 18:02
Japans Unterhaus genehmigt Nachtragshaushalt für Interventionen

Samstag 31 Januar, 2004 10:53 CET

Tokio (Reuters) - Das Unterhaus des japanischen Parlaments hat am Samstag im Rahmen eines Nachtragshaushalts die Erhöhung der Finanzmittel für Devisenmarkt-Interventionen genehmigt
Das Unterhaus stimmte dabei dem Antrag des Finanzministeriums zu, die Mittelaufnahmegrenze für sein Devisen-Sonderkonto auf 100 Billionen Yen (760 Milliarden Euro) von 79 Billionen Yen zu erhöhen. In dem am 1. April beginnenden Fiskaljahr soll die Grenze noch höher bei 140 Billionen Yen liegen, wenn das Parlament das Haushalt 2004/2005 genehmigt.

Im vergangenen Jahr hatte Japan etwa 20 Billionen Yen am Devisenmarkt gegen den Kursanstieg der Landeswährung eingesetzt. Im Januar gab Japan weitere sieben Billionen Yen auf dem Devisenmarkt aus.

Dem Nachtragshaushalt muss noch das Oberhaus zustimmen.

syr :rolleyes:

03.02.2004, 16:54
George Bush setzt auf John Maynard Keynes

03. Feb 12:11

US-Präsident George W. Bush setzt bei seiner Haushaltsplanung auf den Ökonomen John Maynard Keynes. Zumindest während seiner möglichen zweiten Amtszeit - danach beginnen die wirklichen Probleme der Bush-Politik.

Von Marcus Gatzke

«Das unabwendbare tritt nie ein. Das unerwartete aber immer», sagte einmal der Ökonom John Maynard Keynes. Der derzeitige Präsident der Vereinigten Staaten, George W. Bush, scheint sich bei seiner Haushaltsplanung für die kommenden Jahre an dieses Zitat aus den 30er Jahren des vergangenen Jahrhunderts erinnert zu haben.

Bush setzt voll und ganz auf die Theorien von Keynes. «Deficit Spending» lautet das Zauberwort. In schlechten Zeiten wird die Wirtschaft durch eine expansive Fiskalpolitik auf Pump gestützt. In guten sollen die angehäuften Defizite durch verstärkte Sparanstrengungen wieder abgebaut werden.

Soweit die Theorie – die Praxis sieht aber ganz anders aus. «Es ist sehr fraglich, ob Bush seine Ziele für den US-Haushalt erreichen wird», sagte Volkswirt Thomas Amend vom Bankhaus Trinkaus & Burkhardt der Netzeitung. Der US-Präsident will das diesjährige Haushaltsdefizit von mehr als 500 Milliarden Dollar bis zum Jahr 2009 halbieren. Zum Vergleich: Bei Bushs Amtsantritt prognostizierte das Congressional Budget Office einen Haushalts-Überschuss von 5,6 Billionen Dollar für die kommenden zehn Jahre.

Wachstum, Wachstum und nochmals Wachstum

Schon beim Wirtschaftswachstum ist der Präsident optimistischer als viele Volkswirte: Für das laufende Jahr rechnet die amerikanische Regierung mit einem Wachstum von 4,4 Prozent. «Wir gehen nur von 3,7 Prozent aus», sagt Volkswirt Amend. Immerhin bleibt Bush aber noch leicht unter den Schätzungen des Congressional Budget Office. Diese rechnen mit 4,8 Prozent Wachstum in diesem Jahr.

Der sich langsam durchsetzende Aufschwung in den USA steht derzeit noch auf tönernen Füßen. Gestützt durch massive fiskalpolitische und auch geldpolitische Impulse haben die US-Verbraucher mit ihren Konsum auf Pump die US-Wirtschaft am Leben erhalten. «Die Stimulierung der Wirtschaft über die Nachfrage scheint Wirkung gezeigt zu haben», sagt Amend. «Aber auf lange Sicht kann es nicht so weiter gehen.» Die Verbraucher in den USA sind indes hoch verschuldet, und die Sparquote in den USA liegt nahe Null. Der Aufschwung könnte also schnell wieder verpuffen.

Regierung hofft auf maßvollen Greenspan

Wichtig für den Konsum ist die künftige Zinsentwicklung: Wann und wie schnell wird Fed-Chef Alan Greenspan die Leitzinsen anheben und damit Kredite verteuern? Ein Indiz hierfür ist die erwartete Inflationsentwicklung: Die Regierung Bush geht demnach von einer Preissteigerung von 1,4 Prozent in diesem und 1,7 Prozent im kommenden Jahr aus. Dem steht eine durchschnittliche Prognose des Marktes von 1,5 in diesem und 2,1 Prozent im kommenden Jahr gegenüber.

Die Regierung mache einen höheren Einfluss der noch niedrigen Kapazitätsauslastung bei den Unternehmen und der Arbeitslosigkeit auf die Inflation aus, als dies die privaten Volkswirte tun, meint Gregory Mankiw, Chef von Bushs Wirtschaftsberatern. Im Klartext: Bush rechnet mit langsamer steigenden Zinsen als der Markt - mit entsprechend positiven Wirkungen auf Konsum und Investitionen.

Wachstum und Inflation bestimmen die Größe der Volkswirtschaft und damit auch die Höhe der Steuereinnahmen. Und höhere Steuereinnahmen braucht Bush, um das Defizit zumindest während seiner Amtszeit abbauen zu können. Die wahren Probleme beginnen aber erst – eine Wiederwahl Bushs vorausgesetzt – ab 2009.

Nach Bush wird es noch schlimmer

Der Präsident plant, die bisher auf zehn Jahre befristeten Steuersenkungen auf Dauer festzuschreiben – mit entsprechenden Auswirkungen auf den Haushalt. Dieser Entwicklung ist sich auch die US-Regierung bewusst. Zwar sehen die Prognosen der US-Regierung vor, dass sich das Defizit bis zum Jahr 2009 deutlich reduziert. Aber auch unter den optimistischen Bush-Prognosen wird sich das Haushaltsloch nach 2009 bis auf über zehn Prozent des Bruttoinlandsprodukts (BIP) ausweiten.

Aber 2009 kann Bush eigentlich egal sein. Der amerikanischen Verfassung zufolge kann ein US-Präsident nur einmal wiedergewählt werden. Wenn also der Haushalt richtig aus dem Ruder läuft, sitzt Bush auf jeden Fall nicht mehr im Weißen Haus.

Der Haushaltsplan von Bush

URL dieses Artikels: http://www.netzeitung.de/wirtschaft/271614.html

syr :rolleyes:

03.02.2004, 22:02
G7 members downplay chance of new dollar agreement

Tuesday February 3, 8:36 am ET
By Mike Dolan

LONDON, Feb 3 (Reuters) - Key members of the Group of Seven richest nations, whose finance ministers meet in Florida later this week, threw cold water on Tuesday on speculation about an agreement to arrest the U.S. dollar's recent steep decline.
Financial markets, nervous for weeks that the meeting in Boca Raton on Friday and Saturday would agree either words or action to buoy the weakening dollar, are now betting a lack of consensus among the seven will scupper any concrete initiative.

The dollar, which is down about nine percent against a trade-weighted basket of world currencies since G7 finance chiefs last met in Dubai in September, skidded to a three-year low on the yen and dropped one percent on the euro on Tuesday.

Japan's Finance Minister Sadakazu Tanigaki said earlier on Tuesday the performance of the recovering world economy and structural issues underlying it would have more weight than currency issues at the annual February gathering.

"Macroeconomy, structural issues -- these will have the most weight in the discussions," Tanigaki told a news conference.

His comments echoed those of U.S. Treasury Undersecretary John Taylor, who said on Monday G7 commitments to lift economic growth in all areas would dominate the weekend gathering.

"The agenda for growth, which is a very important initiative launched in Dubai back in September, will be the focus of the policy discussions at the G7 meetings," he said, declining even to comment on currency issues.


Renewed dollar weakness on Tuesday indicated currency traders now believe no new agreement on foreign exchange will emerge from the Boca Raton meeting of finance ministers and central bankers from the United States, Japan, Germany, France, Britain, Italy and Canada.

In the absence of that, huge U.S. trade and budget deficits are likely to see the dollar resume its slide, they said.

As long as these deficits continue to expand, the dollar will need more and more foreign investment into the United States and its assets just to keep the exchange rate steady.

Economists reckon a cheaper dollar may attract foreigners back to U.S. markets while easing the country's trade deficit by boosting U.S. exports and limiting imports. But official purchases of dollars by Asian governments in particular, aimed at keeping their local exports competitive in U.S. markets, is complicating the adjustment by making dollar losses uneven and artificially funding U.S. budget gaps.

"People are beginning to realise there won't be much coming out of the G7 that will change the dollar's weak trend," said Marvin Barth, global currency strategist at Citibank in London.

"The U.S. has made it clear as long as the dollar's decline is orderly, it is beneficial all round by helping disinflation and current account problems."

The stance of the U.S. and Japan, which was suspected by currency traders of intervening yet again to buy dollars for yen on Tuesday, is in contrast to European concerns the euro is taking the heat from dollar depreciation.

At the very least, euro zone delegations are expected to seek to add a phrase to the G7 communique that says excess volatility on the currency markets is unwelcome while adding a call for a greater sharing of the dollar decline.

This is because the dollar's loss of more than 12 percent against the euro since September is the highest against all major currencies and European governments are concerned this could stifle the primarily export-led recovery in the euro zone.

Euro zone governments have complained that the Dubai G7 statement seeking "more flexibility in exchange rates" was interpreted as a green light for markets to sell dollars for euros because other countries actively opposed dollar losses.

Asian economic giants such as Japan, China and South Korea, to which the statement was addressed, either continue to intervene to limit dollar losses or continue to fix currencies to the U.S. unit. A major problem for G7, however, is that neither China nor other Asia economic powerhouses outside Japan are party to G7 agreements and gatherings.

"In terms of raising the issue and persuading China to react, I think the aim has been achieved," said a senior Japanese finance ministry official on Tuesday.

International Monetary Fund (News - Websites) managing Director Horst Koehler said on Monday all major economic areas should share the burden of the dollar's deficit-driven adjustment, but he also said Europe should not panic over the extent of recent moves.

"We expect no major revision in the G7 statement, so prefer to go dollar short for now," said Trevor Dinmore, foreign exchange strategist at Deutsche Bank.


syr :rolleyes:

05.02.2004, 07:58
U.S. will discourage dollar prop at G-7

'Stability' may be added to statement urging 'flexibility'

By Rachel Koning, CBS.MarketWatch.com
Last Update: 12:14 AM ET Feb. 5, 2004

CHICAGO (CBS.MW) - U.S. finance officials aren't expected to offer overseas counterparts much salve for the sting of a weaker dollar when they gather in sun-soaked South Florida this weekend for the G-7 finance ministers meeting.

The Bush administration signaled this week it's comfortable with the dollar's depreciation, which is helping troubled manufacturers narrow the U.S. export gap. That means U.S. trading partners, notably Japan and Europe, can only fret over the impact on their own exports and larger risks to their economic fitness.

The finance ministers and central bankers of the world's industrial giants - the Group of Seven -- converge on Boca Raton, Fla. Friday and Saturday. The countries represented are the U.S., Canada, Great Britain, France, Germany, Italy, and Japan. Bilateral meetings and large-group sessions are expected, culminating in a joint communiqué to be issued Saturday evening.

"Every country wants a weaker currency and they can't all get what they want," said Greg Anderson, senior currency strategist with ABN Amro, in Chicago.

In addressing reporters this week, U.S. Treasury Undersecretary John Taylor emphasized a focus on cooperative growth among the G-7 membership. With barely a mention of currencies, he thereby deemphasized Europe and Japan's grousing over market volatility, analysts said. See related story.

The weaker dollar has helped to alleviate some of the pressures on the record U.S. current account imbalance, a broad measure of trade that includes investment flows, said Kathy Lien, chief fundamental analyst with Forex Capital Markets, in New York.

A weaker dollar "provides another avenue for the U.S. government to stimulate a robust economic recovery, which they hope will lead to a renewed surge in job creation before the November election," said Lien.

"The U.S. is comfortable with the current foreign-exchange rates. The U.S. would probably not want to stir the markets by agreeing to a sweeping change in policy," this weekend, said Masato Imai, deputy general manager of the international treasury and trading department at UFJ Bank, in Tokyo.

The dollar had been in a general decline for more than a year in large part on worries that four-decade-low U.S. interest rates won't attract enough foreign capital to finance record U.S. budget and trade deficits. Critics say the United States is too reliant on foreign purchases of its assets, while U.S. officials maintain demand for U.S. assets reflects confidence in the world's economic superpower.

Treasury Secretary John Snow pledged yet again this week the White House's vague public commitment to a "strong dollar" and its benefits for low inflation, while stressing that markets are the best venue for setting foreign-exchange values.

He too has said he will urge his G-7 brethren to stimulate domestic and global growth, suggesting the United States has done its part with decades-low interest rates and tax cuts.

Flexible vs. stable

Snow said Tuesday that exchange-rate flexibility will contribute to sounder global economic health.

It was the G-7's urging for "flexibility" in September that accelerated an already softer dollar's skid.

The Dubai call for flexible exchange rates was believed aimed at Japan, which had spent record reserves intervening in currency markets by selling yen for dollars in order to keep Japanese-made goods attractive abroad, and at China, which keeps its currency pegged to the dollar, also to boost exports.

Since the fall meeting, the greenback has tumbled most dramatically -- more than 12 percent -- vs. the euro. One euro would buy $1.12 in September. It brings $1.2530 currently and last month grazed $1.29, its richest worth since its 1999 launch, having rallied some 40 percent on the dollar in two years.

The greenback has lost roughly 10 percent vs. the British pound, also reaching multiyear lows against the Swiss franc, Canadian and Australian dollars. See Currencies for the latest dollar trading action.

The dollar has surrendered 7.5 percent against the yen, with the dollar worth 115 yen just after the Sept. 20 meeting and 105.25 yen at the 31/2-year low hit Wednesday, despite Japan's best efforts.

Japanese authorities have pledged they will continue to use markets to curb the yen's rise. Europe, because its averse to controversial intervention, has only been able to watch the euro rack up a double-digit advance on the greenback.

ABN Amro's Anderson thinks the United States will say this weekend it wants currency flexibility, i.e. hands off the markets. Europe will say its wants stability and Japan will say that domestic economic health doesn't justify yen levels, signaling its willingness to keep up intervention.

Many analysts think the United States will get its way.

"I'm betting on no change to the statement," said David Gilmore, analyst at Foreign Exchange Analytics.

"Europe has the power to affect the exchange rate with an [interest] rate cut, which the U.S. would welcome. And calling for stable exchange rates or a sentence protesting excessive volatility smacks of manipulation, which Taylor finds repugnant," he said.

Masaki Fukui, vice president of forex division at Mizuho Corporate Bank, in Tokyo, said he doesn't expect the G-7 nations will call for revision for a weakening dollar.

"The flexible foreign-exchange clause might remain in the statements, as well as the clause saying the overshooting exchange rates are undesirable."

"The momentum for the euro's rise has subsided for the last two or three weeks. But if the euro nears the $1.30 level again, the case for the ECB's interest-cut will be stronger. The currency intervention by the ECB is also an option, but I think the ECB would regard that as the last resort."

Foreign aid

U.S. officials certainly welcome the other economic benefit from a rising yen vs. the dollar: Japan turns its currency market proceeds into holdings of U.S. government debt.

"Indeed Japan alone has been accumulating in the neighborhood of 30-40 percent of the Treasury debt auctions as well as regularly buying Treasury notes between auctions," said Gilmore.

Demand for government-issued notes, which influence mortgage rates and other longer-term consumer borrowing rates, pushes prices up and yields down.

U.S. reliance on others to boost its economy is risky, said Brian Wesbury, chief economist with Griffin, Kubik, Stephens and Thompson, taking part in a Chicago Mercantile Exchange panel on foreign exchange Wednesday.

"The United States has flooded the world with dollars, which have to show back up in the system somehow, such as Japanese purchases of U.S. debt. But at some point that will come home to roost."

He looks for the dollar to return to "a long-run growth path" as soon as the Federal Reserve begins raising U.S. interest rates.

syr :rolleyes:

09.02.2004, 21:39
Snow: No hint of shift in dollar

Treasury Secretary, in interview, says finance chiefs reiterated belief in market forces.

February 9, 2004: 1:00 PM EST
By Kathleen Hays, CNNfn correspondent

BOCA RATON, Fla. (CNNfn) - Far from hinting at a Group of Seven shift to prevent a further drop in the dollar, Treasury Secretary John Snow insisted that the finance chiefs of the world's richest nations had agreed this weekend to maintain flexible exchange rates, a policy in place since the group last met in September.

During an interview with CNNfn following the G-7 meeting in Boca Raton, Fla., Snow said Sunday the G-7 agreed "to allow market forces to set exchange rates, to let the fundamentals of the marketplace drive exchange rate changes. That was a clear consensus that came out of both Dubai and Boca Raton and it is entirely consistent with U.S. views."

This contrasts with the positions taken by some other G-7 officials that a new sentence was inserted in the latest communiqué to show that the group had decided the dollar should fall no further in currency markets.

Asked to comment on statements attributed to European Central Bank president Jean Claude Trichet, that there was a clear G-7 consensus on the diagnosis and measures that need to be taken in foreign exchange markets, Snow said, "I'm not sure exactly what he has in his mind. I think what he had in mind is probably the existence of a broad consensus on the need for flexible exchange rates."

The dollar has fallen steadily over the last year and a half, losing more than 20 percent of its value against the euro since the G-7 met in Dubai last September. U.S. officials have done nothing to halt its slide, neither in word by saying they did not wish to see it fall further, nor in deed by intervening in currency markets.

In spite of the decline, Snow, the White House point man on currency, has continued to insist the U.S. favors a strong dollar.

Economists point out that the falling dollar helps U.S. exporters sell their goods overseas. U.S. exports surged 19 percent in the fourth quarter of last year.

European officials have been complaining that the falling dollar and rising euro are hurting their economies by making Europe's exports more expensive at a time when their economies are struggling to grow.

Japan has taken action, intervening in currency markets to the tune of billions of dollars to buoy the dollar and stop the yen from rising.

Strong dollar policy reiterated

Publicly, the U.S. supports a strong dollar. On Sunday, when asked to explain how, if the "strong" dollar is in the U.S. interest, it has been permitted to fall so far and so fast over the past few months, Snow would only say, "I never comment on the relative value of currencies. What I do is reiterate our basic policy which is of course that we support the strong dollar."

In what could be seen as an attempt to refute economists who say the U.S. is allowing the dollar to fall in order to boost its exports and help its economy grow faster, Snow said, "We also always add that -- and I think it's a critically important point -- nobody can devalue their way to prosperity."

Snow didn't hint at any new initiatives to prevent the dollar from falling further.

Currencies are "strong when they reflect market fundamentals, not when they're artificially propped up," he said.

Snow's reference to artificially propping up currencies appeared to refer to government actions to intervene in currency markets. For example, if the U.S. government wanted to keep the dollar from falling further against the euro, it could buy dollars and sell euros in the foreign exchange market.

He did not rule out, in the broadest terms, that the U.S. could intervene in currency markets. Asked to outline the policy guidelines the U.S. follows when it decides to intervene in currency markets, he said, "Of course, we wouldn't articulate those policies except to say that we never say never and we have a strong, strong support for the policy of open competitive markets."

A big theme for the White House team going into the G-7 meeting was that the U.S. cannot be the sole engine of global economic growth, that the rest of the industrialized world must do more to spur growth in their own economies.

But asked if there were any new initiatives agreed behind the scenes at the weekend meeting Snow said, "No, not at this meeting. But of course that wasn't the purpose of this meeting." He said the there was a reaffirmation of the need to reduce the debt burdens of Iraq and Afghanistan, and that he had bilateral meetings with the finance chiefs of both nations.


syr :rolleyes:

10.02.2004, 13:27
Euro rallies against dollar

Markets testing Europe's resolve to defend dollar

By Emily Church, CBS.MarketWatch.com
Last Update: 7:19 AM ET Feb. 10, 2004

LONDON (CBS.MW) - The euro tested a one-month high on the dollar Tuesday after the chief economist for the European Central Bank doused speculation that European officials are readying intervention to stem the dollar's decline.

The European currencies are bearing much of the brunt of the dollar's decline. A statement by the G-7 finance ministers Saturday, which largely supported the European complaints over the weakening dollar, has done little to alter the trend.

ECB economist Otmar Issing indicated in an interview in the Sueddeutsche Zeitung Tuesday that there is no point in short-term action by central banks to influence exchange rates , according to AFX.

Issing said the exchange rate is not a major target for the ECB, prompting the euro rally.

The euro held back on Monday partly amid fears the Europeans were prepared to defend the dollar in the markets, as Japan has done repeatedly over the last year.

Elsewhere, dealers started to look ahead to Wednesday's congressional testimony by Federal Reserve chairman Alan Greenspan.

The greenback traded at 105.71 yen by noon, up from the late Monday New York level of 105.60 yen.

Dealers said that Japanese officials have been generally pleased with the outcome of the G-7 meeting given the lack of criticism over the country's intervention policies.

Finance Minister Sadakazu Tanigaki reportedly said that Japan isn't one of the countries that lack exchange-rate stability and that the U.S. understands the need for Japan to continue intervention.

"As is natural after a G-7 meeting, Tanigaki is probably overstating his case, but this time we think that he is close to the truth. As a result, Japan is likely to continue its defensive intervention, to resist excessive volatility while ensuring respecting exchange rate flexibility consistent with economic fundamentals," Nikko Citigroup analysts said in a note.



11.02.2004, 19:06
Dollar Drops on Greenspan Remarks

Wednesday February 11, 11:39 am ET
By Kyle Peterson

CHICAGO (Reuters) - The dollar fell against the euro on Wednesday after Federal Reserve Chairman Alan Greenspan said the U.S. currency's decline should help narrow the gaping U.S. current account gap.

The Fed chief, in his semi-annual report on monetary policy to the U.S. House of Representatives Financial Services Committee, said the economy has turned the corner to vigorous growth but policymakers can be patient about raising interest rates.

It was his comment about the dollar's impact on the current account gap, however, that sent the euro to a fresh session high against the dollar and sterling to a new 11-year high.

A weaker dollar makes exports cheaper and imports more expensive, which should narrow the U.S. trade deficit, a major component of the current account.

"That is the most direct comment that I've seen Greenspan make in a very long time," said Bob Priore, desk manager at Carr Futures in Chicago. "It takes the place of any G7 statement. This will force the hand of the European community to tell us what they really think."

Last weekend, finance ministers from the Group of Seven major economic powers denounced excessive volatility in currency markets as an obstacle to global growth. Many in the market took that statement as criticism of dollar weakness. But analysts said the ministers appeared unwilling to take aggressive action to prevent further weakness.

Some economists think the Fed will raise rates from the current 1958 low of 1 percent around mid-year. Others think the central bank will leave rates steady until after the November U.S. presidential election.

The Fed sparked speculation of an earlier-than-expected rate hike in its last policy statement. But a weak January U.S. jobs report undermined that speculation, even though other data have shown the economic recovery is holding up.

Yield-boosting rate rises are key to ending the dollar's two-year decline, especially after the G7 finance ministers made no promises to support the dollar. The G7 statement warned against "disorderly movements in exchange rates."

In mid-morning U.S. trade, the euro was up 0.54 percent at $1.2757 (EUR=). The dollar fell 0.32 percent to 1.2313 Swiss francs (CHF=).

The dollar was down 0.09 percent at 105.39 yen (JPY=). The dollar has been lingering just above three-year lows against the yen, helped by expectations of Bank of Japan yen-selling intervention.

Lawmakers were likely to grill the Fed chief during a question-and-answer session on U.S. fiscal policy.

The Bush administration has forecast a record $521 billion deficit this year, adding to the dollar's woes, but has vowed to halve that by 2009.


syr :rolleyes:

12.02.2004, 17:05
Wechselkurspolitische Machtspiele der Fed

- von vwd Korrespondent Peter Trautmann -

Frankfurt (vwd) - Ein wenig verwundert es schon. Da treffen sich am
Wochenende die Finanzminister und Notenbankgouverneure der G-7-Länder und
einigen sich auf die Erklärung, eine hohe Wechselkursvolatilität sei
unerwünscht, und wenige Tage später ist dies alles wieder vergessen. Nur so
kann man die Ausführungen von Fed-Chairman Alan Greenspan deuten, der
eindrucksvoll klar gemacht hat, wie wenig Probleme er mit der
Dollar-Abwertung hat und wie gut dies für die US-Wirtschaft sei. Greenspan
wird bewusst gewesen sein, dass er mit seinen sehr offenen Worten den Dollar
weiter drückt, vor allem zu Lasten des Euro.

Noch im Verlauf seiner Rede vor dem US-Kongress gewann der Euro mehr als
2 US-Cents und kam nahe an sein bisheriges Rekordhoch von knapp 1,29 USD
heran. Greenspans Motive sind eindeutig: Ihm geht es darum, einerseits das
hohe US-Leistungsbilanzdefizit über eine nachhaltige Abwertung zu
korrigieren, zum anderen will er den schwachen Wechselkurs als zusätzlichen
Verstärker der Niedrigzinspolitik der Fed nutzen, mit der die Konjunktur auf
Trab gehalten werden soll. Denn noch immer gibt es Zweifel an der
Nachhaltigkeit des Aufschwungs, dazu reicht ein Blick auf die hohe
US-Konsumentenverschuldung und die kritische Variable privater Verbrauch.

Greenspan selbst hat diese Zweifel offen zugegeben, als er von einer
"substanziellen" Trägheit in der US-Wirtschaft sprach, was einigen
Beobachtern offenbar entgangen ist, die seine Rede als Vorbereitung für
Zinserhöhungen interpretiert sehen wollten. Zwar hat Greenspan eingeräumt,
die Leitzinsen nicht "unendlich" lange auf ihrem 45-Jahres-Tief von 1,00%
halten zu können, aber dies wäre auch nicht realistisch. Die "Geduld", von
der er hinsichtlich einer wann auch immer anstehenden geldpolitischen
Straffung sprach, sollte ausreichen, Greenpan eine weitere Nominierung als
Chairman zu sichern und die Märkte zu beruhigen.

Weniger beruhigt kann hingegen die Europäische Zentralbank sein, die
jetzt nicht nur mit verbalen Interventionen des US-Treasury zur Schwächung
des Dollar leben muss, sondern auch mit verstärkten Querschlägern der
Federal Reserve. Boca Raton war gestern, heute dominiert bereits wieder die
wechselkurspolitische Unilateralität. Sich aus Sicht der EZB mit
Interventionen oder Zinssenkungen dagegen zu stemmen, wie es manche
Beobachter fordern, scheint nicht nur angesichts der fundamentalen
Anpassungszwänge mehr als aussichtslos.


syr ;)

15.02.2004, 18:40
Trade gap hits record

U.S. deficit with other nations widens to $42.5B in December, hits record $489B for year.

February 13, 2004: 4:08 PM EST

NEW YORK (CNN/Money) - The nation's trade deficit jumped about 11 percent in December as strong economic growth pulled in record imports and exports inched lower despite a weaker dollar, the government reported Friday.

The gap came in above the average forecast by private economists. For the full year, the trade deficit was a record $489.4 billion, up 17 percent from 2002.

The deficit grew to $42.48 billion from a revised $38.35 billion in November. Economists, on average, expected the trade gap to rise to $40 billion, according to Briefing.com. December's gap was just a bit below the record trade gap in March of $42.9 billion.

Exports fell 0.2 percent to $90.4 billion despite the weaker dollar, after rising 2.8 percent in November. Imports rose 3 percent to $132.8 billion after falling 0.6 percent in November.

On Wall Street, stocks fell after the report while Treasury bond prices rose. The dollar rose against the euro and edged higher against the Japanese yen.

The value of the dollar has dropped in recent years, due in part to the wide trade gap. But the dollar's fall has helped U.S. exporters by making their goods cheaper overseas, and U.S. policy makers have done little to stop it.

The dollar has changed little against the currency of China, the biggest U.S. trading partner, since that nation pegs its currency to the greenback.

The U.S. trade gap with China shrank a bit in December to $9.9 billion from $10.8 billion in November. For the full year, however, it rose to a record $124 billion.

"(The data are) suggesting the decline we've seen in the dollar over the last couple of years is not having an impact. It suggests the dollar may still need to fall to help narrow the trade deficit. But there's a risk to higher inflation if it does," Gary Thayer, chief economist at AG Edwards & Sons in St. Louis, told Reuters.

A separate Labor Department report showed the price of imported goods rose sharply in January, a sign the weaker dollar may finally be making itself felt on the price end.

U.S. import prices rose 1.3 percent last month, the biggest climb since February 2003, after a revised 0.5 percent advance in December, the Labor Department said. Wall Street had forecast a milder 0.4 percent gain.

In testimony this week to Congress, Fed Chairman Alan Greenspan seemed comfortable with the dollar's decline, saying foreign companies had so far been able to absorb the impact. He said the weaker currency would also eventually help contain the trade gap as foreign producers export less to the United States.

Analysts said the larger-than-expected trade deficit could require the government to trim its estimate of fourth-quarter economic growth, currently pegged at 4.0 percent.

"It's probably going to knock about 0.4 percent off GDP revisions for the fourth quarter," said David Sloan, an economist with 4Cast in New York.



17.02.2004, 13:42
Contrarian Chronicles

The 7 stages of a dollar crisis

By Bill Fleckenstein

'Experts' simplistically tout a weak dollar as good news. No wonder many regular folks are unaware that its dramatic decline could spell real trouble.

Along the way to a full-blown crisis, the steps leading up to it may either pass unnoticed or prompt insufficient concern. That is the story of the dollar. Its decline continues to strike many folks as good news. It is only a matter of time before that perception changes. The inevitable crisis will inflict damage, but those who see where we are headed can protect themselves beforehand. To this end, I'll explain where I believe we are in that process.

G7's 'lingo limbo:' How low can the dollar go?

Recently, the Group of Seven finance ministers met in Boca Raton, Fla., to hammer out a much-parsed currencies communiqué. Why folks take this exercise in semantics seriously beats me. The fact is, even the seven ministers, who are capable of speaking five languages, can't tell you what the heck they mean. Of course, one reason they can't tell you is that their differing agendas make it hard to pretend like they're all on the same page.

That said, the foreign ministers probably agree on one point: The dollar is becoming a problem, which is why the gist of their communiqué stated that too much volatility (read: dollar weakness) is not a good thing.

What we are witnessing is the unfolding of a dollar crisis. Though its external value seems to be a nebulous concept for many folks, as the dollar's ongoing decline builds to a crisis, it will have a significant impact on the workings of financial markets -- and affect everyone's financial well-being. (For review, please see my past columns: "The dollar's dramatic decline comes out of your wallet”; "The dollar: linchpin to stocks and the economy"; "Face up to the falling dollar"; “Fantasy, the Fed and the falling dollar: Oh my!"; and "The dollar is on borrowed time.")

7 small steps to crisis

Here, then, is my outline of a 7-step process of creating a full-blown crisis.

Step 1. Nobody notices or pays attention that the dollar is falling.

Step 2. Folks wake up, but they either don't care or rationalize dollar weakness as a good thing.

Step 3. The central banks now know they have a problem, but the bankers think the market will obey them. It will, for a while. (This is the step we have now reached and what emerged at the G7 meeting.)

Step 4. The dollar now tests everyone's resolve by resuming its decline. The currency markets will not respond to jawboning by finance ministers.

Step 5. In this step, the finance ministers are forced to take action. (Think about it. Even if they'd stated that they wanted the dollar to go up, nothing either explicit or implied indicates they'll do anything about what's happening. That will come next.) When they do take action, the market will do what they want -- but only for a while.

Step 6. The ministers take some additional action, but it won't be enough, and the currency markets won't do what the ministers want.

Step 7. Finally, we'll have a full-blown crisis, and that will be the end game.

Pssst, Economist: It's Al (Greenspan), not Asia

To buttress my claim that we are segueing from the initial stages where no one cares to the next and dicier stages, I'd like to share a few quotes from "Let the dollar drop," the lead editorial in last week's issue of The Economist. Though the writer first takes a why-worry attitude toward the decline, he seems to recognize that all this central-bank dithering can lead to real trouble. So, confusion of conclusions notwithstanding, it's worthwhile spending a minute on the article.

Starting with the why-worry theme, the writer argues the nonsensical case that the dollar has, in fact, been too strong. (If that isn't an example of drinking 'em pretty, I don't know what is.) A weaker dollar, he says, "will help to reduce America's vast current-account deficit."

Well, I've got news for him. The dollar's slide of nearly 30% from the peak of its valuation two years ago to where it is now hasn't done a whole heck of a lot to reduce the imbalances. A further slide may help some, but it's not going to do a lot, either. So much of our manufacturing has been wiped out as we ship jobs to Asia that we're exporting less and less of what the world wants. Thus, it's kind of hard to fix all these problems simply by having the dollar collapse.


syr :rolleyes:

18.02.2004, 10:33
The "Real" Value of a Dollar

February 14, 2004

In a January 4 speech this year, Fed. Governor Bernanke opined that the rising gold price was caused by terrorism. Geopolitical tensions, he said, “account for the bulk of the recent increase in the real price of gold.” He also downplayed the weakness of the dollar. Weakness against the euro was less important than the fact that the dollar’s “real value against the currencies of important U.S. trading partners, weighted by trade shares, has fallen only about 12 percent from its peak in the first quarter of 2002.” Bernanke’s remarks in total formulate the rationale for the Fed’s easy money policy. As such, they illuminate reality as perceived by the Fed versus reality as perceived by the rest of humanity.

Bernanke’s references to the “real” price of gold and the “real” value of the dollar suggest that he and his colleagues have access to information and knowledge unavailable to ordinary citizens. Policy decisions, and most specifically, the Fed’s ultra easy money stance, are based on these “realities”. Those of us who believe the price of gold is rising in response to easy money as well as repeated interventions in past and prospective capital market crises have got it all wrong. Those who fear that the overvaluation of the dollar and resulting capital market imbalances may spell trouble for the financial markets and the economy can toss out the tranquilizers.

There are three ways to assess the Fed’s worldview. First, they are indeed right. Critics should just simmer down. Second, what the governors say for public consumption (and the Fed has become increasingly vocal in recent years) is primarily designed to affect the behavior of consumers, corporations and other governments in order to achieve desired results such as economic growth, financial market tranquility, and retention of dollar holdings by foreign central banks. In other words, they don’t believe what they are saying but are using the Fed pulpit to achieve policy objectives. Third, and most disturbing: they actually believe what they are saying.

What is the “real” value of a dollar? It is a question of metaphysical dimensions. The dollar is the unit of account by which all participants in the economic process make decisions. Whether or not to buy, hire, produce, or invest depends on millions of daily calculations measured in dollars. Decades ago, thirty-three years to be exact, dollar centric decisions were pretty much confined to the borders of the United States. The 1971 decision to decouple the dollar and gold marked the beginning of an explosion of international reserves. It gave birth to the dollar-based system of global credit and an era of unprecedented world prosperity. Today, the preponderance of global economic decision-making is rooted in some notion as to the intrinsic value of a dollar expended, received, or held as an investment.

For the dollar to continue as the global numeraire, it is essential that its value remain stable. What participants in the economic process believe the value of the dollar to be has the power to affect global economic activity. There can be no room for doubt as to the dollar’s value either in the present or in the future. The enticing question is what information should the market utilize to assess the dollar? Should it use the price of gold? Not according to Gov. Bernanke. Should it use exchange rates? Again, the answer is no. Let us then turn to the mini-maestro for the correct answer. He concludes his January 4th speech:

“The achievement of price stability must not and will not be jeopardized. We at the Federal Reserve will closely monitor developments in prices and wages, as well as conditions in the labor market and the broader economy for any sign of incipient inflation. We will also look at the information that can be drawn from surveys and financial markets about inflation expectations. For now, I believe that the Federal Reserve has the luxury of being patient. However, I am also confident that, when the time comes, the Fed will act to ensure that inflation remains firmly under control.”

In other words, “trust us” to get it right. But is Bernanke’s confidence that the Fed will act appropriately to maintain the dollar’s value enough to dispel all doubts? Perhaps central bankers in Asia have not yet had a chance to digest Bernanke’s words. This might explain the January 28 comments of Japanese Finance Minister Sadakazu. He said he wanted to carefully consider whether to change the weighting of gold in Japan’s foreign reserves, which are “mostly made up of dollar-denominated assets”. Japan’s reserves reached a record high of $673 billion at the end of December, 2003. Zhu Min, general manager and advisor to the president of the Bank of China, the largest holder of dollar reserves in China, recently stated: “all the Asian countries hold dollars for security reasons, but at some point, this has to end.” Speaking at the Davos World Economic Forum in January, he added, “Over time, China’s pace of export growth would wane, weakening its ability to buy dollar-denominated assets.”

Central bankers, upon concluding that they hold more of a particular reserve asset than they desire, have been known to act without any consideration of intrinsic value. One need only recall the relentless divestment of gold holdings by European central banks at prices well below the current market. That episode alone suggests that central bankers are either incapable of judging or indifferent to matters of valuation.

By now, any literate investor knows there are too many dollars held by Asian central banks, but nobody can figure out what happens next. It is obvious, for example, that if they were to sell, or even stop buying, the ever-increasing supply of treasury debt, interest rates in the United States would rise substantially. The less obvious but inescapable side effects would be lower stock prices, higher inflation, and a softer economy. It could also cause dislocations in China, which needs the US market to provide job growth. In a recent article in Foreign Affairs ( Nov/Dec ‘03) David and Lyric Hughes Hale wrote “the unemployment rate in (Chinese) urban areas is estimated at more than 8 percent; there may be an additional 200 million jobless workers in the countryside. According to Zhai Zhenwu, the director of the Population Research Institute at China’s Renmin University, China will need to create 20 million new jobs a year to absorb the 8 million people who have lost their jobs in state-owned enterprises.”

It seems unlikely that Chinese bureaucrats would initiate any precipitous move away from the dollar, either in the composition of their reserves or in the manipulated peg of 8.3 renminbi/$. It is more plausible that external events will impose change. Still, financial officials in Asia are telegraphing creeping abandonment of the dollar. Stephanie Pomboy of Macromavens notes that the percentage of Chinese FX reserves recycled into Treasuries declined to 24% in the second half of 2003 from 54% for all of 2002. These signals, alone, may prove sufficient to accelerate the dollar’s slide from its perch as the global numeraire. Perhaps a resurgence of US protectionism based on the issue of job losses will add momentum. Spreading credit worries tied to deflation of the Chinese bubble, an unexpected global downturn, or a sharp rise in interest rates are also capable of greasing the skids.

One could speculate endlessly on the scenarios. It is impossible for anyone to write tomorrow’s headlines. What is absolutely and irrefutably certain, however, is that oversupply, a term without which it would be impossible to describe the dollar, will be corrected by market forces in due course. The Fed, notwithstanding its privileged knowledge of the true value of the dollar, is powerless to dictate that the dollar will trade for one penny more than its market- clearing price.

The presence or absence of value cannot be determined apart from a context of scarcity or abundance. Value is also inextricably tied to usefulness. Water may be cheap in most parts of North America, but in the Sahara, it can be priceless. The hard-pressed debtor may thirst for a few dollars, but not the rock star. While the principal is easy to apply locally, it is more challenging on a global scale. The earth is 80% water and so, for most, it is relatively cheap. Essential to life itself, water can be very expensive.

The value of money is fundamentally different from all other daily necessities. Money is useful both for its current transaction value and for its future purchasing power. While its transaction value can be known at any given moment, future purchasing power is a matter of speculation. Money should not be confused with currency. Real money is scarce. A five million Turkish lira note sits on my desk. There are plenty more where it came from. Its utility ends with its curiosity value (and its transaction value for those in Turkey.) Otherwise, a low opinion of the Turkish Lira is shared universally. No central bank accumulates the Turkish Lira as a reserve asset. Its future purchasing power is expected to decline because the issuing authority lacks any credible commitment to maintaining its current value. To hold more of a currency than one requires for daily transactions, one must believe that its future purchasing power will approximate that of today.

The Federal Reserve would have us believe that the inherent value of the dollar is best represented by the Consumer Price Index. The American Institute for Economic Research informs us (January 12, 2004 Research Report) that this measure of the general price level was first introduced in World War I at the request of President Wilson to help mediate disputes between labor and management in defense related industries. Its usage spread over the next several decades, almost always in relation to wage issues. By the 1960’s and 1970’s, it became the basis for cost of living adjustments for benefit packages including social security. The index, compiled and published by the Bureau of Labor Statistics (BLS), is the most widely used and trusted barometer of the dollar’s value. It is the basis for calculating the excess return on Treasury Inflation Protected Securities (TIPS) and real interest rates (t-bills minus trailing twelve month CPI). It is the method by which investors calculate their inflation-adjusted returns from government bonds and private sector debt securities. Since short-duration government bonds approximate risk free return, the CPI indirectly but most powerfully influences the valuation of the entire equity market.

What started out as a fairly simple and pragmatic attempt to hammer out equitable wage settlements some 90 years ago has become a highly complicated, politically charged, and controversial cornerstone for the capital markets. The BLS, in a never-ending and earnest effort to keep up with the times, has changed the items, the composition, and the pricing methodology of the CPI components. It has distinguished between core inflation and reported inflation to iron out unsustainable fluctuations in commodities. It has introduced seasonal adjustments to smooth out comparisons on a month-to-month basis. The index currently contains 400 items thought to approximate a market basket of goods and services that best represent the general price level. In recent years, the index has been tame, advancing at a rate of 1.9% for the last twelve months, and down from 2.4% for 2002. The signal transmitted to the capital markets is that there is little or no inflation and therefore the value of the dollar is rock solid. In fact, the Federal Reserve has been more preoccupied with potential deflation, or a general decline in the price level. The expectation of low CPI readings for the foreseeable future is a key justification for the Federal Reserve’s aggressively accomodative stance on interest rates, the lowest bond yields since the 1950’s, and the highest equity market valuations since the dot-com crash of 2000.

Arnirvan Banerji, Director of Research at the Economic Cycle Research Institute, scrutinizes CPI data for hints about potential changes in direction. The Future Inflation Gauge or “FIG” has fairly reliably anticipated changes in direction with lead times of several months. The “FIG” according to Mr. Banerji, is currently forecasting a further decline in the CPI, more good news for the capital markets, or so it would seem. He hastens to add that the FIG is helpful only in pinpointing changes in direction of the CPI. It does not capture the amplitude of an imminent rise or decline in the CPI. It also cannot detect secular shifts in magnitude that span more than a single business cycle.

This leading analyst of the CPI questions whether the information conveyed by the series is as meaningful as the financial markets take it to be. In a very effective sound bite heard by this listener on Bloomberg radio, Banerji said that a person with one foot in boiling water and the other in a bucket of ice is on average perfectly comfortable. So it would seem that the tranquility of the CPI does not capture underlying turbulence. The thematic cross current would be one of rapidly escalating price levels for goods and services that are in scarce supply or have some measure of pricing power such as health care or raw commodities. On the other hand, price deflation is evident in many consumer goods. 16% of Wal Mart’s (purveyor of many of the 400 items measured in the CPI) 2003 sales were sourced in China. At the current exchange rate for the renminbi, this percentage will undoubtedly grow and keep a ceiling on consumer good prices. Thanks to Asian outsourcing, the BLS was able to report declines of 83% in computers, 56% in televisions, 18% in women’s dresses, 7.8% in sports equipment, and 1.7%-5.1% in other apparel categories for the period 1990-2003. For the same period, the all-item average rose 46%. Over the same period, college and tuition fees rose 171%, cable television plus 114.7%, bank services up 104.5%, motor vehicle insurance up 85.2%, and movie, theater, and sporting event tickets plus 81.8%.

But there is more to this than simple crosscurrents, according to Banerji. Several years ago, the very important housing component of the CPI was increasing at an annual rate of 4%. Today, that number is 2.2% and heading lower. Housing is weighted at 40.85% of the total CPI. How is it falling when house prices are rising? Simple. The BLI calculates this important component on the basis of “imputed rent” rather than the capital cost of buying a new home. Imputed rent synthesizes the cost of home ownership into a rental factor putting all citizens, both renters and homeowners, on the same footing. The BLS gathers the information for imputed rent, or the “Owners’ Equivalent Rent Index” by asking “each homeowner (surveyed) for their estimate of the house’s implicit rent and what the occupants would get for their rent …. if the owner did rent their home.” (US Department of Labor Program Highlight-Fact Sheet No. BLS 96-5.) It should be noted that in light of the Federal Reserve’s highly expansionary monetary policy, single-family owner-occupied housing has enjoyed an unprecedented new construction boom. Mr. Banerji observes that a felicitous (for the CPI) consequence of the single family housing boom has been a rise in vacancies and a decline in rental rates for apartment properties. Pressure on the rental market appears to go a long way towards explaining the mystifying decline in the housing component of the CPI. Could it be that the sagging apartment rental market also explains rising bond and equity markets?

There is still more to the tale. Gertrude Stein’s famous dictum: “Rose is a rose is a rose” speaks to the mutation of a word’s meaning over decades or centuries of usage. We can surmise that Big Brother is alive and well at the BLS where a computer is not a computer is not a computer. In other words, added features, memory capacity, and random bells and whistles are not captured in the straightforward list price of a computer. To expunge all continuity of meaning, the BLS brought forth “hedonics”, the science of measuring the value of a product or a service after allowing for qualitative improvements. A laptop with twice the memory as last year’s model sold at the same price this year is counted as a 50% price reduction. This sort of analysis was applied initially to computers and IT equipment. More recently, a broad range of consumer goods including electronics and automobiles has been subjected to hedonic measurement. Health care has been a particularly ill behaved sector of the CPI. Hospital services, nursing homes and adult day care, for example, increased 141.4% over the period 1990 to 2003, versus an average of 46% for all items measured. It should come as no surprise, then, that the Bureau of Economic Analysis is considering adjusting prices of medical services for quality changes (Grant’s Interest Rate Observer-1/30/04.)

Proponents of hedonic price measurement admit that the process is not without flaws. In a July 12, 2001 paper, Jack Triplett of the Brookings Institution found that “the hedonically based computer equipment deflators in the national accounts of OECD countries recorded …ranged form +80% to –72% for the decade of the 1980’s.” Happily, after the misadventures of the 1980’s, the European practitioners of hedonics achieved a “smaller dispersion” by the early 1990’s when the computer deflators ranged from “-10% to - 47%.”

The notion underlying hedonic adjustment is that normal price measurement techniques fail to capture qualitative improvements. However, we are entitled to ask whether there are any objective standards by which these price adjustments are applied. Why should an increase in memory capacity or a ramp up in processing speed equate to a price reduction? By what factor are auto prices reduced because of airbags, catalytic converters, seat warmers, or tinted glass? Should health care costs be adjusted downward because patients are discharged in two days rather than three? Hedonic adjustments, as with pro-forma earnings, require a great deal of subjectivity to rearrange reported information into a new kind of reality. Slashing reported list prices for a computer because of advanced specifications over last year’s model implies there is quantifiable improvement in productivity or output. As noted in Grant’s (Feb. 16, 2001) a computer “like a piano depends on the individual at the keyboard: He may play the ‘The Moonlight Sonata’ or ‘Happy Birthday.’ The implication of hedonic adjustment is that the computer-using U.S. workforce studied at Julliard.”

We must address one final layer to understand the mystery of price stability in the midst of a falling dollar, rising deficits, and ongoing trade imbalances. The problem goes further than the constant re-jiggering of the index or the application of abstruse price measurement techniques. The problem is that the prices that are being measured are themselves fake. Preposterous? Blame it on manipulated exchange rates. Does the dollar trade at 8.3 renminbi or 105 yen because of intrinsic value? Asian governments that peg or manipulate their currencies to these levels have no interest in value. An undervalued renminbi is needed to create jobs and investment. It is for the United States, “an unholy partnership with its Asian creditors. They would produce; we would consume…..the United States and its lenders have entered into the biggest vendor-financing scheme in the history of borrowing and lending.” As a result, “the prices are fake. The exchange rates are manipulated, the interest rates are adulterated and the product prices are contrived.” (Grant’s 1/16/04) What prices would the CPI measure if the US dollar bought only half as many renminbi, rupee, or yen? The valuation of the dollar as supported by the CPI is a testament to institutional inertia, delusions of elitist intellectuals, and public gullibility. The myth of price stability conveyed by the CPI would shatter upon contact with freely floating exchange rates.

The CPI was conceived to measure price levels within the borders of the United States. It was thought to convey helpful information to consumers, managements, and investors as to the presence or lack of price stability. It did so in a context of stable exchange rates and international trade flows that are miniscule by today’s standards. Thanks to the evolution of financial markets and trade reform, the dollar is a borderless currency. For the substantial holders of dollars outside of the US, the notion that a benchmark so flawed as the CPI should be the preeminent measure of value is laughable. Extra territorial dollars are held not for consumption but for investment. The more astute holders of these dollars must look beyond the CPI to the future supply and demand for the currency. In assessing those fundamentals, they must take into account the integrity of the issuing authority. They must also evaluate the suspect reliability of the principal and the only readily available measure of the currency’s value, the consumer price index. As for future supply and demand, Richard Duncan remarks in the Financial Times: “The amount of new yen that Japan ‘printed’ and converted into dollars during January 2004 alone was enough to finance 13 per cent of the US budget deficit.” Earlier in the column, he states: “It is inconceivable that economic policy makers in Tokyo and Washington do not understand the impact that this unprecedented act of money creation is having on global interest rates and economic output.”

In its infancy, the CPI was a tool for settling disputes, not a measure of the dollar’s value. In those days, twenty dollars bought an ounce of gold and that was the measure of the currency’s value. It was simple to understand for one and all. Armies of bureaucrats, statisticians, and academicians were not required to collect, massage, interpret or invent obscure information in order to divine the dollar’s value. No financial high priests comparable to today’s Fed were needed to reveal the truth. Credibility of the currency rested simply on its link to gold. The dollar’s viability as the cornerstone for international credit is in jeopardy. The over valuation of the dollar cannot help but breed further capital misallocation, production overcapacity, inflation of asset values and debt buildup, all precursors to another bubble.

How will world financial authorities orchestrate a graceful retreat for the dollar from center stage? The possibility of an orderly, well-choreographed exit seems remote. Whether it goes out with a bang or a whimper, the end game will be deflationary. Bob Hoye of Chartworks (February 6) observes: “central bankers merely assist the credit expansion that, by necessity, is hypothecated against rising asset prices. Once the top is in, the power inevitably shifts to margin clerks (whose) mandate is to get the accounts on side and, after rampant speculations, that means selling into a collapsing market.” The perceived safe havens offered by the euro or the yen will eventually yield only losses. While these currencies provide a liquid alternative in the short run, their fate is inseparable from the dollar. The three are like inebriated celebrants wobbling home, propping each other up and incapable of orbiting too far from their collective gravity. The day when each becomes confetti is within sight.

What is the value of a dollar? For us, the simplest and most reliable measure is the amount of dollars required to buy a fixed quantity of gold. We respectfully disagree with Mr. Bernanke. Whether he and his fellow governors are hypocritical or delusionary in their assessment of the dollar’s intrinsic worth is of no matter. What is important is that they are flat out wrong. As anyone can see, the dollar is falling against gold and has been doing so for almost five years, long before terrorism became a front-page item. As we are very busy figuring out how to profit from the view that it has much further to fall, we have given little thought on how to fix the mess. Let us leave financial diagnosis and prescriptions to those wise policy makers who got us here. Still, we cannot resist offering some friendly advice. The next time around, respect history. Anchor a new global currency to something that has real monetary value.

John Hathaway
Tocqueville Asset Management L.P


syr :rolleyes:

25.02.2004, 16:07
10:01am 02/25/04
Greenspan urges action on federal deficits

By Rex Nutting

WASHINGTON (CBS.MW) -- Federal Reserve Chairman Alan Greenspan urged Congress on Wednesday to take the long view and act now to reduce the mounting federal debt . Greenspan said running federal deficits is wise and necessary for the next year or two to support the fledgling economic recovery. But deficits in the long run could retard U.S. economic growth, he warned. The aging Baby Boom generation will begin retiring in just four years, the beginning of a long process that could boost government spending for retirement and health security programs, Greenspan told the House Budget Committee. Greenspan suggested that changes be made in Social Security to limit cost-of-living increases and perhaps to adjust the retirement age.

syr :rolleyes:

02.03.2004, 18:44
Greenspan: China could overheat

Value of yuan could rise if dollar purchases slowed

By Corbett B. Daly, CBS Marketwatch
Last Update: 12:33 PM ET March 2, 2004

WASHINGTON (CBS.MW) -- China could be forced to limit its dollar purchases to avoid excessive economic growth, Federal Reserve Board Chairman Alan Greenspan warned Tuesday.

"China's central bank purchases of dollars, unless offset, threaten an excess of so-called high-powered money expansion and a consequent overheating of the Chinese economy," Greenspan said in prepared remarks to the Economic Club of New York.

And if the Chinese did limit their purchases of the greenback, the value of the Chinese renminbi, also known as the yuan, could rise in the short-term.

"Lesser dollar purchases presumably would allow the renminbi, at least temporarily, to appreciate against the dollar," Greenspan said.

China has fixed its currency at roughly 8.3 yuan to the dollar since 1994, and the issue is a politically sensitive one for politicians in Washington during a presidential election year.

Democrats and Republicans from key electoral college states have pushed the administration to talk tough to the Chinese.

American manufacturers complain that the fixed Chinese exchange rate provides an unfair cost advantage to China's exports and is therefore costing thousands of U.S. jobs.

The U.S. manufacturing sector has shed 2.8 million jobs over the last three years.

Last month, the Bush administration sent six economic officials to Beijing for the first of several meetings aimed at providing technical assistance to China that could eventually allow China to float its currency.


syr :rolleyes:

02.03.2004, 20:01
1:53pm 03/02/04
Greenspan sees rates rising at some point

By Rex Nutting
WASHINGTON (CBS.MW) -- The Federal Reserve will have to raise interest rates at some point, Fed Chairman Alan Greenspan said Tuesday in response to questions after a speech in New York. Greenspan said the Fed has been dealing with a special case over the past three years that requires an accommodative monetary policy. Greenspan also said "corrosive deflation" is probably not possible without a collapse in asset prices. Falling prices of goods, if caused by strong productivity, need not be worrisome, he said.


:rolleyes: ;)


09.03.2004, 20:00
Buffet warns on dollar and greed

By Michael Harrison, Business Editor
08 March 2004

Warren Buffett, the American investment guru and chairman of Berkshire Hathaway, has issued a fresh warning over the way the US is deluging the world with dollars to fund its huge trade deficit.

In his annual letter to Berkshire Hathaway shareholders, the world's second wealthiest man says the consequences of this could be "troublesome", reaching far beyond the currency markets. He also discloses that Berkshire is loading up with foreign currency to offset its exposure to the dollar.

"Prevailing exchange rates will not lead to a material let-up in our trade deficit. So whether foreign investors like it or not, they will continue to be flooded with dollars," Mr Buffett writes.

Although Mr Buffett said the bulk of Berkshire's $120bn in net worth would continue to be held in US assets, such as its stakes in Coca-Cola and American Express, the company was spreading its risk by increasing its exposure to currencies including the euro. "Berkshire holds many billions of cash-equivalents denominated in dollars. So I feel more comfortable owning foreign exchange contracts that are at least a partial offset to that position," he tells shareholders. In 2002, the company took a deliberate decision to increase its holdings of junk bonds denominated in euros and now owns $1bn worth of these.

Elsewhere, in his famously folksy style, the Sage of Omaha, as he is known, criticises corporate America for boardroon greed, takes President Bush to task for his tax cuts, and attacks the "lapdog" behaviour of supposedly independent mutual fund directors who allowed the "market timing" scandal to take place under their noses.

On pay, Mr Buffett writes: "In judging whether corporate America is serious about reforming itself, CEO pay remains the acid test. To date, the results aren't encouraging."

But he reserves more of his ire for the mutual fund managers who allowed hedge funds to make millions of dollars at the expense of ordinary investors. "I am on my soapbox now only because the blatant wrongdoing that has occurred has betrayed the trust of so many millions of shareholders. Hundreds of industry insiders had to know what was going on, yet none publicly said a word."

As for President Bush's fiscal policies, Mr Buffett notes that in 1952 a third of all federal tax receipts came from the corporate sector whereas last year the figure was just 7.4 per cent, thanks to the tax breaks handed out to companies and their investors. "If class warfare is being waged in America, my class is clearly winning."

Berkshire Hathaway doubled its profits last year from $4.3bn to $8.1bn and increased its net worth by $13.6bn. But Mr Buffett cautioned that under-valued stocks were becoming hard to find, meaning that its future performance would fall "far short of what it has been in the past".


syr :rolleyes:

15.03.2004, 22:41

BOJ mulls ending massive yen intervention - Nikkei

Monday March 15, 1:21 pm ET

NEW YORK, March 15 (Reuters) - The Bank of Japan is mulling ending its massive yen-selling interventions in the currency market by the end of March, the Nihon Keizai Shimbun reported from Tokyo in its early Tuesday edition.

"Some central bank officials predict that it will walk away from large-scale interventions by the end of this month and that the upward pressure on the yen ... will abate beginning in April," the Nikkei reported.

Many BOJ officials, as well as foreign central bankers, question Japan's strategy of intervening in the currency market to halt the appreciation of the yen, the influential Japanese newspaper reported on its online site monitored in New York.

The central bank is apparently hoping that it can stop concentrating on reining in the strong yen and shift its focus to policy options related to price trends and interest rates, the report said.

The BOJ has in recent months intervened to sell yen in massive amounts to protect its exporters, spending 7.5 trillion yen in January and around 3.34 trillion yen in February, or approaching $100 billion in all.

The Nikkei report caused ructions in the currency market where the dollar instantly slipped against the yen. It also hurt U.S. Treasury prices since the BOJ has been using part of its intervention proceeds to buy huge amounts of U.S. debt in recent months.

syr :rolleyes:

21.03.2004, 19:26
den CHF mag ich besonders im Umfeld des USD-Crash's :xyz. Und da liegen die COT's eigentlich ganz gut jeweils ;). In der Folge ist es an der Zeit......


die Augen offen zu halten :rolleyes: ;) ......


14.04.2004, 21:42
Russische Zentralbank will Rubel auch an Euro binden

Moskau 14.04.04 (www.asia-economy.de) www.moskau.ru

Die russische Zentralbank löst sich von der starren Anbindung des Rubels an den USD. Zukünftig richtet sie sich bei ihrer Währungspolitik nach USD und Euro. Infolgedessen wird der Euro-Rubel-Kurs stabiler, während die Wechselkurse gegenüber der amerikanischen Währung mehr schwanken. Der Übergang zum neuen Wechselkurssystem erfolgt jedoch nicht sofort.

Die Änderung der Kurspolitik „ist eine Frage von Wochen, vielleicht Monaten“, sagte der stellvertretende Zentralbankchef Konstantin Korischtschenko. Ganz klar ist auch noch nicht das Gewicht, das der Euro zukünftig bei der Bewertung des Rubels spielen wird. Nach Angaben von Korischtschenko könnte der Euro anfangs mit zehn - 20 Prozent (gegenüber 80 - 90 Prozent USD) gewichtet werden, doch Marktteilnehmer gehen von einer Berechnung 50:50 aus.

Grund für diese Änderungen in der Wechselkurspolitik sind die heftigen Schwankungen des Euro gegenüber dem Rubel, die innerhalb eines Tages mitunter 50 Kopeken pro Euro betrugen. Spekulanten können nun hingegen wieder mit dem USD spielen, der sich eineinhalb Monate überhaupt nicht bewegte . Am letztlichen Ziel der Zentralbank, der Stärkung des Rubels, ändert sich jedoch nichts. (ab/.rufo)
20:51 (il)


20.06.2004, 18:26
Original geschrieben von faszination
:respekt ---------------------------------------------------------------------

20. Juni 2004, 02:30, NZZ am Sonntag

Ist der Dollar am Ende?

Die Vereinigten Staaten haben sich innert kurzer Zeit vom Weltbankier zum weltweit grössten Schuldner gewandelt. Noch halten die Staatsbanken Asiens den US-Dollar durch den Kauf von US-Staatsanleihen auf Kurs. Doch wenn die USA nicht mehr länger der Motor der globalen Nachfrage sind, muss der Euroraum in Aktion treten, und zwar bald. Nutzen die Europäer ihre Chance, könnte für die Amerikaner ein halbes Jahrhundert Dollar-Herrschaft zu Ende gehen, schreibt Niall Ferguson

«Die Übereinkunft, wonach der Dollar als internationale Währung anerkannt wird, entbehrt inzwischen ihrer ursprünglichen Grundlage.

[B]Weil viele Staaten zum Ausgleich des amerikanischen Handelsbilanzdefizits Dollars akzeptieren, können sich die Vereinigten Staaten gratis im Ausland verschulden. Was die Vereinigten Staaten diesen Ländern schulden, bezahlen sie in Dollar, die sie nach Belieben drucken können . . . Diese beispiellose Fähigkeit hat zur Verbreitung der Idee beigetragen, der Dollar sei ein objektives, internationales Zahlungsmittel, tatsächlich jedoch ist er ein Kreditinstrument, das einem einzigen Staat gehört.»

Dies sprach Charles de Gaulle im Jahre 1965 auf einer Pressekonferenz, die von Historikern oft als der Anfang vom Ende der internationalen Währungsstabilität der Nachkriegszeit bezeichnet wird. De Gaulle behauptete, die USA zögen unfairen Vorteil daraus, dass der US-Dollar die wichtigste internationale Reservewährung sei. Sie finanzierten ihr eigenes Zahlungsbilanzdefizit, indem sie dem Ausland Dollars verkauften, welche voraussichtlich an Wert verlieren würden.

Das Bemerkenswerte an de Gaulles Analyse ist, wie gut sie auf die Rolle des Dollars im Jahr 2004 zutrifft - ironischerweise. General de Gaulle hatte beabsichtigt, den Dollar, falls möglich, von seiner Position als wichtigste Währung der Welt abzudrängen. Sicher, in Folge von de Gaulles Bemerkungen nahm der Druck auf den Dollar kontinuierlich zu. 1973, wenn nicht schon früher, war das (1944 in Bretton Woods ausgearbeitete) System von mehr oder weniger festen Wechselkursen tot, und für die Welt brach eine Ära variabler Wechselkurse und hoher Inflation an. Aber noch in den dunkelsten Tagen der siebziger Jahre behielt der Dollar seinen Status als Reservewährung. Tatsächlich ist er in dieser Rolle auch weiterhin so erfolgreich, dass einige Ökonomen unlängst von Bretton Woods II gesprochen haben; abermals mit dem Dollar als Schlüsselwährung. Doch wie lange kann sich dieser neue Dollar-Standard halten?

Asiatische Dollars

Die Existenz eines Dollar-Standards mag all jene Amerikaner überraschen, die sich mit dem Gedanken tragen, die Sommerferien in Europa zu verbringen. Bei einem Euro-Kurs von 1,18 Dollar (gegenüber 0,90 Dollar vor zwei Jahren) scheint es weit hergeholt, von einer neuen Ära der festen Wechselkurse zu sprechen. Doch Bretton Woods II ist kein globales System (ebenso wenig wie Bretton Woods I), sondern ein primär asiatisches System. Dollar-gestützt sind die Währungen Chinas, Hongkongs und Malaysias sowie, wenn auch weniger starr, die Währungen Indiens, Indonesiens, Japans, Singapurs, Südkoreas, Taiwans und Thailands.

Es fällt nicht schwer zu erraten, dass die Nutzniesser eines solchen Systems, wie schon in den sechziger Jahren, primär die USA sind. In den letzten zehn Jahren ist das amerikanische Aussenhandelsdefizit für Waren, Dienstleistungen und Kredite dramatisch angestiegen. Zählt man die Defizite der letzten zwölf Jahre zusammen, erhält man Auslandsschulden von insgesamt 2,9 Billionen Dollar. Nach Angaben des US-Handelsministeriums entsprach die Netto-Auslandsverschuldung der USA Ende 2002 rund einem Viertel des Bruttoinlandproduktes. Noch 1988 waren die USA Nettogläubiger gewesen.

Der rasche Wandel vom Weltbankier zum grössten Schuldner der Welt hat zwei Vorteile für die Amerikaner. Erstens konnten die US-Unternehmen in grossem Umfang investieren (besonders die IT-Branche), ohne dass die Amerikaner ihren Konsum einschränken mussten. Zwischen 10 und 20 Prozent der Investitionen in der US-Wirtschaft im letzten Jahrzehnt wurden mit ausländischem Kapital getätigt, so dass die Amerikaner selbst immer mehr ausgeben konnten. Die Pro-Kopf-Sparquote beträgt weniger als die Hälfte der Quote der achtziger Jahre.

Fetter «Free Lunch»

Der zweite Vorteil nimmt Gestalt an in Steuersenkungen. Der seit 2000 stark defizitäre US-Haushalt - laut IWF eine beispiellose Verschlechterung für Friedenszeiten - gründet im Wesentlichen auf ausländischem Kapital. Ohne diese Grundlage hätte die für die Finanzpolitik von Präsident Bush charakteristische Kombination von Steuersenkungen, gestiegenen Ausgaben und sinkenden Staatseinnahmen zu einem sehr viel höheren Zinssatz geführt. Veteranen der Nixon- und Reagan-Jahre können angesichts der verschwenderischen Haushaltspolitik, die die gegenwärtige republikanische Regierung ungestraft verfolgt, nur neidisch den Kopf schütteln. Sich derart zu verschulden und gleichzeitig Renditen für langfristige Anleihen von unter 5 Prozent zu geniessen, das kann man getrost als den fettesten «Free Lunch» der modernen Wirtschaftsgeschichte bezeichnen. Unter Präsident Bush sind sogar die Kosten des Schuldendienstes gesunken, obwohl die Gesamthöhe der Schulden gestiegen ist.

Das hat ganz einfach damit zu tun, dass das Ausland bereit ist, die bemerkenswert teuren neuen US-Staatsanleihen zu kaufen. In den letzten zehn Jahren ist der Anteil der US-Schulden in ausländischer Hand von 20 auf fast 45 Prozent angestiegen. Wer kauft diese auf Dollar lautenden Anleihen, offenbar ohne ein Bewusstsein für die Gefahr, dass deren Wert ziemlich plötzlich fallen könnte? Es sind keine Privatinvestoren, sondern staatliche Institutionen - die asiatischen Staatsbanken.

Zwischen Januar 2002 und Dezember 2003 wuchsen die Devisenreserven der japanischen Staatsbank um 266 Milliarden Dollar an. Diejenigen in China, Hongkong und Malaysia um 224 Milliarden Dollar, in Taiwan um mehr als 80 Milliarden Dollar. Dieses Geld wurde fast ausschliesslich in US-Dollar und Dollar-denominierten Anleihen angelegt. Allein im ersten Quartal dieses Jahres kauften die Japaner 142 Milliarden Dollar. Die asiatischen Zentralbanken lassen sich dabei von einem einfachen Motiv lenken: Sie wollen eine Aufwertung der eigenen Währung im Verhältnis zum Dollar verhindern - denn ein schwacher Dollar würde den Export eigener Produkte auf dem amerikanischen Markt behindern. Ohne diese Interventionen würde der Dollar im Verhältnis zu den asiatischen Währungen an Wert verlieren, genauso wie gegenüber dem Euro. Die asiatischen Zentralbanken sind aber entschlossen, alles zu tun, um einen festen Dollar- Kurs zu stützen.

Bretton Woods II ist also ein asiatisches System von Dollar-gekoppelten Währungskursen, das dafür sorgt, dass die asiatischen Exporte in den USA konkurrenzfähig bleiben, während die Amerikaner ihrerseits eine scheinbar unerschöpfliche und günstige Kreditmöglichkeit haben, um im privaten und staatlichen Bereich gigantische Schulden anzuhäufen.

Zumindest in einer Hinsicht ist die These von einer unbewussten Neuauflage von Bretton Woods überzeugend. Langfristig hat sich der Aussenwert des Dollars als erstaunlich stabil erwiesen. Anfang der achtziger und Ende der neunziger Jahre gab es Phasen der Überbewertung, doch immer wieder kehrte er zu einem Durchschnittswert zurück. Momentan liegt er bei weniger als 10 Prozent, unter der Marke von 1973. Wo sich das neue System vom alten unterscheidet, ist es zum Vorteil des neuen. Grundlage von Bretton Woods war die feste Goldparität des Dollars. Erinnern Sie sich noch an «Goldfinger»? Der Wohlstand der Ära des Kalten Kriegs beruhte auf den Goldreserven von Fort Knox. Damit war das System aber anfällig für ausländische Spekulanten, die, wie etwa de Gaulle, lieber auf Gold als auf Dollar setzten. Heute gibt es nur den Dollar. Das internationale Währungssystem ist auf Papier gebaut.

Doch dies ist der Haken: Die Anhänger von Bretton Woods II scheinen ein System mit einer grenzenlosen, rosigen Zukunft vor sich zu sehen. Die Asiaten, so lautet ihr Argument, werden weiterhin Dollar und US-Staatsanleihen kaufen, weil sie unbedingt einen Wertverlust des Dollars vermeiden wollen und weil sie theoretisch grenzenlos eigene Währung drucken können, nur um Dollar-Käufe tätigen zu können. Und überhaupt: Warum soll das Ausland nicht in den USA investieren wollen? Nachdem dort der Aufschwung eingesetzt hat, seien die USA genau der richtige Ort für Investoren, wie mir Wall-Street-Analysten in den letzten Monaten immer wieder versichert haben. «Wo denn sonst?», fragte mich kürzlich ein Wall-Street-Banker nicht ohne eine gewisse Arroganz. «Etwa in Europa?»

Diese optimistische, konventionelle Auffassung übersieht jedoch eine Reihe wichtiger Tatsachen. In den sechziger Jahren war das amerikanische Handelsdefizit unbedeutend. Sorge bereitete eher, dass die Amerikaner im grossen Stil im Ausland investierten, auch wenn dies mit dem Import von ausländischem Kapital wettgemacht wurde. Doch vor allem sorgte man sich darüber, dass die Dollarinvestitionen im Ausland den Goldbestand der US- Zentralbank übersteigen könnten. Heute verzeichnet Amerika enorme Defizite, sehr viel mehr ausländisches Kapital fliesst herein. Folglich sind die potenziellen Probleme für ein System von festen Wechselkursen wesentlich grösser.

Welche Vorteile das System Bretton Woods auch hatte, es war nicht von langer Dauer. Zählt man nur die Jahre, in denen der Dollar und die grossen europäischen Währungen eine festgesetzte Goldparität hatten, dann waren es deren zehn; von 1958 bis 1968. Das asiatische Kind von Bretton Woods wird vermutlich ähnlich kurzlebig sein. Und sein Verschwinden dürfte ebenso unangenehme Folgen haben wie die Krise in der Mitte der siebziger Jahre.

Der Dollar ist trotz all seiner mystischen Anziehungskraft keine Goldmünze. Seit dem Ende der Goldparität ist er kaum mehr als ein bedrucktes Papier, dessen Herstellung etwa drei Cent kostet. Das weltweit bekannte Design stammt aus dem Jahr 1957, und seitdem hat der Dollar inflationsbedingt 84 Prozent seiner Kaufkraft eingebüsst. Die Japaner werden lachen, wenn man sie dazu beglückwünscht, zum «Dollar-Standard» zu gehören. 1971 bekam man über 350 Yen für einen Dollar, heute sind es um die 100.

Die Schwäche des Dollars hat bis zuletzt kaum eine Rolle gespielt. Wir haben ihm die gelegentlichen Kursverluste verziehen, weil es keine Alternative gab. Die schiere Grösse der amerikanischen Wirtschaft (die Preise so vieler Waren - von Öl bis hin zu Gold - werden in Dollar angegeben) bedeutet, dass der Dollar noch immer die führende Währung der Welt und die Berechnungsgrundlage internationaler Leistungsbilanzen ist.

Doch kein Geldsystem hält ewig. Vor hundert Jahren war das Pfund Sterling die führende Währung der Welt. Die immense britische Verschuldung während des Ersten Weltkriegs und in der Folgezeit bot dem Dollar die Gelegenheit, gleichzuziehen und die Führungsrolle zu beanspruchen. Dieses Muster könnte sich wiederholen; im internationalen Geldwesen ist ein neues Kind aufgetaucht. Nur wenige Amerikaner haben begriffen, dass dieses neue Kind ein ernst zu nehmender Kandidat für den Spitzenjob ist.

Was immer man politisch von der Europäischen Union halten mag, niemand kann leugnen, dass die von ihr geschaffene Währung das Zeug hat, dem Dollar als internationale Reservewährung Konkurrenz zu machen. Erstens ist das BIP von Euroland kaum tiefer als das der USA - 16 Prozent der Weltproduktion 2002; verglichen mit 21 Prozent in den USA. Zweitens weist die Eurozone, anders als die USA, einen Überschuss auf. Die europäische Nachfrage ist sehr gering. Und drittens (meiner Ansicht nach der wichtigste Faktor) sind seit Einführung des Euro mehr internationale Anleihen in Euro als in Dollar aufgelegt worden. Vor 1999 waren etwa 30 Prozent aller internationalen Anleihen in den Vorgänger- Währungen des Euro aufgelegt worden, mehr als 50 Prozent lauteten auf Dollar. In den letzten fünf Jahren liegen Euro-Anleihen bei 47 Prozent, Dollar- Anleihen bei 44 Prozent.

Könnte dies der Wendepunkt sein? Bei einem Dinner, das eine der grössten US-Banken kürzlich in London gab, stellte ich die Frage: Wer glaubt, dass der Euro den Dollar als internationale Reservewährung ersetzen könnte? Nicht weniger als sechs Anwesende antworteten mit Ja und waren auch bereit, ihre Ansicht gegenüber den amerikanischen Gästen zu vertreten. Als ich einer kleineren Gruppe von Wall- Street-Bankern die gleiche Frage stellte, reagierten sie eher skeptisch. Einer meinte, dass der Euro bereits die Lieblingswährung des organisierten Verbrechens sei, weil die Europäische Zentralbank (anders als die Federal Reserve Bank in den USA, die nur noch Banknoten im Wert von höchstens 100 Dollar druckt) immerhin 500-Euro- Noten ausgibt. So kann man locker ein paar Millionen Euro in die Aktenmappe stopfen - was in bestimmten Gegenden Kolumbiens nützlich sein kann. Womöglich auch an der Wall Street.

Millionen im Aktenkoffer

Die Zukunft des asiatischen Bretton- Woods-Systems - und des Aufschwungs der US-Wirtschaft - hängt ab von der Bereitschaft der asiatischen Institutionen, weiterhin Dollars zu kaufen. Aber warum sollten sie das tun, wenn die japanische Wirtschaft offenbar aus ihrer deflationären Talsohle herauskommt? Jedenfalls konnten die japanischen Interventionen den Kursverlust des Dollars nicht aufhalten - in den letzten zwei Jahren hat der Yen (im Verhältnis zum Dollar) von 135 auf 110 zugelegt. Die Dollarguthaben der japanischen Staatsbank haben so an Wert verloren.

Es mag für Asien langfristig wenig sinnvoll sein, sich auf den US-Markt zu verlassen. Der ehemalige US-Finanzminister Larry Summers erklärte jüngst in einem Vortrag in Washington, dass den USA nichts anderes übrig bliebe, als mehr zu sparen, wenn man «das riesige Problem des geringen Sparvolumens lösen wolle, das zu einer Abhängigkeit von ausländischem Kapital geführt hat sowie zur fiskalischen Schwäche, die wir in den letzten fünfzig Jahren hatten». Die Welt, so Summers' Konsequenz, darf sich nicht länger darauf verlassen, dass die USA der führende Konsument sind. Was wiederum bedeutet, dass Staaten, die auf «ein exportorientiertes Wachstum bauen, sich in den nächsten Jahren umorientieren müssen».

Das Dilemma der asiatischen Dollars ist die Gelegenheit für den Euro, wirtschaftlich wie politisch. Wenn die USA tatsächlich nicht mehr der einzige funktionierende Motor für die globale Nachfrage sind, muss der Euroraum in Erscheinung treten, und zwar bald. Allzu lange war die Preisstabilität der alleinige Orientierungspunkt für die Europäische Zentralbank. Sie hat sich nicht ausreichend mit dem Wirtschaftswachstum in Europa und der Welt auseinandergesetzt. Zu lange lag der Zinssatz der EZB einen Prozentpunkt über dem der Federal Reserve, obwohl Deflation für die wichtige deutsche Wirtschaft die grössere Gefahr ist, als sie es je für die USA war.

Inzwischen ist ein Franzose Präsident der EZB. Vielleicht sollte Jean- Claude Trichet einen Blick auf die Geschichte werfen. Vor 39 Jahren geriet der Dollar unter Druck, als sich die USA in zunehmendem Mass in einen schmutzigen postkolonialen Krieg verwickelt sahen. Charles de Gaulle verkündete das Ende von Bretton Woods, weil dieses System, wie er sagte, die europäischen Staaten zwang, die amerikanische Inflation zu importieren. Heute ist der Moment gekommen, das Ende von Bretton Woods II auszurufen. Asiaten und Europäer müssen ihre Waren anderswo als in Amerika verkaufen. Und sie müssen sehen, dass die Entwicklung des Euro zu einer alternativen Reservewährung die Chance bietet, den Schwerpunkt der internationalen Wirtschaft nachhaltig zu verlagern.

Nutzen die Europäer ihre Chance, könnte für die Amerikaner ein halbes Jahrhundert Dollar-Herrschaft zu Ende gehen. Ist das denn so wichtig? Gar keine Frage. Wenn nämlich asiatische Länder ihre Guthaben von Dollar auf Euro umstellen, werden die Amerikaner sehr viel mehr Mühe haben, den privaten und staatlichen Konsum zu einem (aus Sicht ausländischer Kreditgeber) niedrigen oder negativen Realzins zu finanzieren. (Es ist eine einfache Rechenaufgabe: Vor einem Jahr betrug die Rendite bei einer zehnjährigen US- Anleihe etwa 4 Prozent, doch im gleichen Zeitraum verlor der Dollar gegenüber dem Yen 9 Prozent an Wert.)

Der Verlust dieser Subventionierung (faktisch ist es die Prämie, die das Ausland bezahlt, um die beliebteste Währung der Welt zu stützen) könnte teuer sein. Denn ein Anstieg der Zinsen auf ein Niveau, wie es der Ökonom Paul Krugman prognostiziert (Anleihen mit zehn Jahren Laufzeit bei 7 Prozent, Hypothekenzinsen bei 8,5 Prozent) hätte zwei verheerende Auswirkungen. Nicht für die grossen US-Unternehmen, die sich abgesichert haben (mehr als fünf Achtel aller nachgeordneten Aufträge operieren mit bestimmten Zinssätzen), sondern vor allem für die Bundesregierung und die Hausbesitzer. Die Fristenstruktur der Staatsschulden ist extrem kurz: 35 Prozent haben eine Laufzeit von weniger als einem Jahr, so dass höhere Zinsen sich quasi sofort als höherer Schuldendienst niederschlagen und im Haushaltsdefizit bemerkbar machen. Obwohl der Zinssatz schon vorsichtig anzieht, hat sich der Anteil neuer Hypotheken mit variablem Zinssatz von etwa 12 Prozent Ende 2002 auf 32 Prozent erhöht.

Über die geopolitischen Implikationen dieses Sachverhalts darf getrost spekuliert werden. Ein Anstieg der US- Zinsen dürfte nicht nur den Aufschwung verlangsamen. Er könnte auch zu einer noch höheren Staatsverschuldung führen. Damit dürfte der Druck zunehmen, die verfügbaren Mittel zu reduzieren, und das heisst gewöhnlich: das Militärbudget. Es dürfte zunehmend schwieriger werden, einer Bevölkerung, die unter steigenden Schulden und einem unaufhaltsamen Haushaltsdefizit leidet, eine kostspielige Besatzung des Iraks schmackhaft zu machen. Die Europäer dagegen werden selbstbewusster auftreten. Nicht nur werden sie mehr Geld für Entwicklungshilfe und Friedenssicherung ausgeben als die USA, sie werden auch über die Währung der Welt verfügen.

Solche historischen Wendepunkte lassen sich kaum eindeutig markieren. Es ist nicht klar, wann der Dollar das Pfund verdrängte. Doch dann ging alles sehr rasch. Nachdem der Euro schon so weit hochgeklettert ist, werden sich vielleicht schon bald die Ölproduzenten zusammensetzen und ihr schwarzes Gold in der europäischen Währung auspreisen (eine Vorstellung, die für antiamerikanische Produzenten wie Venezuela und Malaysia sehr attraktiv sein muss). Weltwährung bedeutet jedoch nicht Weltmacht. Die Europäische Union ist den USA als militärische Macht noch immer weit unterlegen. Aber der Verlust der führenden Weltwährung würde das wirtschaftliche Fundament der Militärmacht USA fraglos schwächen.

Langsam wird sich Amerika der schrecklichen Konsequenzen des Niedergangs des Dollars bewusst. Der Geist des General de Gaulle wird seine späte Genugtuung geniessen.

Der Schotte Niall Ferguson, 40, ist Herzog-Professor für Finanzgeschichte an der Stern School of Business in New York. Sein neustes Buch, «Colossus», erschien 2004 bei Penguin Press.

Übersetzung: Matthias Fienbork.

Quelle: http://www.nzz.ch/2004/06/20/wi/page-article9O8UX.html

syr :rolleyes:

11.09.2004, 09:34
Hallo Leute!
Bin neu hier.
Gruss an alle Deviseninteressierte, speziell an Syracus.
Hab zum Thema auch ein paar gute Artikel an Lager z.B. den hier:


09.11.2004, 18:21
Bush ist gewählt und damit hat der Thread weitere 3 Jahre und noch mehr als 300 Tage vor sich, auch wenn alle Ziele zuvor erreicht wurden :schaf:.... Ok, liegt schon alles fast auf Rekordtief :lach....

Waiting for The Crash

Larry LaBorde
November 9, 2004

This past weekend I had the pleasure of accompanying my wife to LSU-Baton Rouge to visit my daughter who just this week was initiated into her sorority. We pulled our small Airstream trailer four hours South and enjoyed a delightful weekend visiting our daughter and just relaxing in the perfect November weather of South Louisiana. (clear blue sky, 68 degrees, sun and a slight breeze) I even managed to finish Pat Buchanan's new book "Where the Right Went Wrong."

In Mr. Buchanan's book he explains the post WWII US foreign policy. It all starts out with Harry Dexter White's plan at Bretton Woods. White was a Soviet spy working under Treasury Secretary Morgenthau. The White plan consisted of the US dollar as the world's reserve currency and that dollar being backed by gold at $35/oz. All other currencies would be valued against the US dollar. The International Monetary Fund was then set up and funded with 104 million oz of US gold and billions of dollars of US cash. Other countries contributed money and were granted voting rights in proportion to their contributions. The IMF was set up to provide loans to countries facing a run on their currencies. The International Bank for Reconstruction and Development was also created to provide loans to rebuild countries that suffered destruction during the war. The IBR&D would later become known as the World Bank.

After WWII, peacetime America sold the rest of the world twice as much as it imported. Since under the Bretton Woods plan the USA was supposed to provide the liquidity for the rest of the world the trade surplus would have to be worked around. Too much of the world's money was piling up inside the USA. Some way would have to be found to help send US dollars throughout the world. The US stationed troops around the world and built bases which helped export dollars. Foreign aid as well as loans from US banks sent even more money overseas. US markets were opened to foreign goods without import tariffs. Foreign currency was devalued to make their goods more attractive in US markets to allow foreign countries to earn cash to pay back their loans.

Pretty soon the flow of money going out of the US got out of hand. Nixon and Treasury Secretary Connally severed the gold link in 1971 to stop the subsequent gold redemptions. The IMF then changed its mission. They loaned money to any country that found itself unable to pay back its loans if that country would pledge to follow IMF rules concerning their monetary policy. With the Reagan tax cuts and economic boom as well as the defense cuts at the end of the cold war the US was able to rescue Mexico, Thailand, Indonesia, South Korea, Russia, Argentina and Brazil from currency collapse. The IMF and the World Bank poured money into these countries to allow them to continue to service their foreign debts. The IMF insisted that these countries devalue their currency so they could export their way out of the crisis by flooding the US market with cheap goods to earn US dollars to service their loans. The US agreed to keep its markets wide open. ALL THIS WAS DONE AT THE EXPENSE OF THE US MARKET.

With our trade deficit at $600 billion + dollars the US is in trouble. US dollars are piling up overseas. Unless the US can substantially increase its exports (not possible) then the US dollar MUST FALL. In the long run a devalued US dollar will help us export goods and correct our trade imbalance. In the short run there will be much pain. There will also be pain for anyone foolish enough to be holding US dollars. Eventually US industry will reassert itself but it will take a decade or more. Our standard of living will drop. For now we must import many essential items because we no longer make them in this country and when the dollar devalues we will have to pay a much higher price for them until we can produce them again.

Make no mistake - the dollar must devalue. Politically a devaluing dollar will play havoc with our empire. Just study the UK and see how well they were able to run their empire on a declining currency. Perhaps some good will come out of all this if we are forced to bring home our troops and quit meddling in the affairs of others. (Vote against all incumbents and both political parties whenever possible since they got us into this mess. Small government and sound money are the only things that can save us and no one in Washington wants either. OK- congressman Ron Paul can stay but everyone else needs to go).

In the meantime foreigners are buying US assets such as treasury securities and US businesses. Our great US companies are slowly being sold. Our country is being deindustrialized while we sit and watch.

Will there be a trigger that precipitates a dollar crisis? Will the system blow up? Will the Middle Eastern oil countries suddenly decide to sell their oil for Euros only? Will the Dinar upset the US dollar? Or will we, the dollar, die the death of a thousand cuts where it slowly but steadily devalues? When the dollar devalues gold naturally goes up (unless it held down by artificial means). Over the past few years the dollar has dropped around 35% against the Euro and gold is up almost 70%. Maybe it is ALREADY HAPPENING before our eyes.

Live life and enjoy today because it is the only life we have - but be aware of what is happening all around us and take financial precautions.

Quelle (http://www.321gold.com/editorials/laborde/laborde110904.html)


26.11.2004, 07:44
China cuts US-Treasury holdings

By CBS MarketWatch
Nov. 25, 2004

TOKYO (CBS.MW) -- China has cut the size of its U.S. Treasury bond holdings in its foreign exchange reserves to $180 billion to avoid losses from a weakening dollar, according to a published report.

A report in the Shanghai-based China Business News cited Yu Yongding, a member of the monetary policy committee under the central bank, according to AFX-Asia.

The report did not say how much of a reduction in Treasury debt the cut represented. The central bank normally does not disclose the composition of its foreign exchange holdings.

Yu, speaking at a seminar given at Shanghai University of Finance & Economics, was quoted as saying that China has cut the portion of U.S. dollar-denominated assets as part of its foreign exchange reserves. He said this was largely a reduction in Treasury debt.

The report quoted an unidentified source as saying that U.S. dollar-denominated assets have in the past accounted for about 80 percent of China's foreign exchange reserves. Most of the U.S. dollar assets were Treasury bonds or bills.

China's foreign exchange reserves stood at $514.5 billion at the end of September.

CBSMW (http://cbs.marketwatch.com/news/story.asp?guid=%7BBFCC42B4%2D4153%2D484D%2D988B%2D2CDBE10A9415%7D&siteid=mktw)


26.11.2004, 10:32
Global Economy
Dollar drops: Good news and bad
By Jack Crooks

Many believe a lower dollar is the only plausible policy tool available to the United States if it's to reduce its massive current account deficit. It is why, increasingly, analysts are calling for a coordinated effort on the part of central banks around the globe to push the dollar lower. But it's not an easy task. Failure could spark protectionism, a dollar crisis, and a global financial crisis. And there's still no clear proof that a lower dollar is the best solution.

The problem
The US economy is hooked on consumption and imports, while Asia is hooked on savings and exports. It's an unbalanced financial world. The following is a chart of US as a percentage consumption of gross domestic product (GDP). It now stands at more than 70%. US consumer-demand growth averaged 4% annually (in real terms) over the 1995-2003 period; that's almost twice the 2.2% growth elsewhere in industrialized countries, according to Morgan Stanley. This wouldn't be all bad were the consumption being funded out of growing income levels. But it's not. It's coming out of savings.



The drawdown of savings has produced this buying binge on the part of US consumers. This chart shows savings as a percentage of personal income has fallen to 0.2%. Yikes!

So it's no wonder the US relies on foreigners to the tune of US$2.6 billion a day to fund this gaping current account deficit, absorbing about 80% of the world's surplus savings from Asia, Europe and the Middle East in the process. The chart below shows that the deficit (in red) rose to a whopping $166.2 billion for the second quarter of 2004. Annualized, that's $664.8 billion. The blue line represents the trade-weighted value of the US dollar - its decline is now tracking closely with the increase in the deficit.


The problem is, despite calls for a lower dollar to help close the current account gap, it's poised to get worse before it improves. Here's why, says Morgan Stanley economist Richard Berner:1) Import of goods, services and income is 40% bigger than exports. And this ratio is on the rise again.

2) Higher US interest rates will increase debt payments to foreign debt holders.
3) Iraq war and redevelopment.
4) Slowdown in global growth, especially in Asia.
5) Soaring cost of imported oil.

It means US funding need will continue to grow. Already foreign central banks, especially in Asia, have been carrying the bulk of the funding load. Over the 12-month period ending September 2004, foreign central banks have accounted for 28% of total net foreign purchases of long-term US securities - nearly double the 15% share of the prior 12-month period, according to Morgan Stanley.

But US reliance on Asian funding won't last forever. In fact, it could end sooner than later. Dr Jiang Ruiping, director of international economics at the China Foreign Affairs University, pointed out the following as a warning to the US in an article titled "Crisis looms due to weaker dollar" in the China Daily newspaper:Since China holds huge amounts of dollar-denominated foreign-exchange reserves, the authorities should consider taking prompt measures to ward off possible risks.

Given the deteriorating relations between the US and the Arab world, quite a few Middle Eastern oil-exporting countries have begun to increase the proportion of euro in international settlements. Russia is reportedly going to follow suit.
About two-thirds of the reserve [Chinese] is dominated by the dollar. As the dollar goes down, China will suffer great financial losses.
The low earning rate of US treasury bonds, only 2% - much lower than investment in domestic projects - could cost China's capital dearly ... If the bubble bursts, China will suffer serious losses.
To ward off foreign-exchange risks, China needs to readjust the current foreign-exchange holding structure, increasing the proportion of euro in its forex reserves.
Considering the improving Sino-Japanese trade relations, more yen may also become an option.
China could also encourage its enterprises to "go global" to weaken its dependence on US treasury bonds.
Using US assets to increase the strategic resource reserves, such as oil reserves, could be another alternative.

Just how much more debt can the US pump out to the world? Are we close to saturation? The chart below compares the total amount of US dollar debt held by the rest of the world (red line) - a cool $4.37 trillion - to the trade-weighted value of the US dollar (blue line). The period between 2002 and the second quarter of 2004 has been shaded, showing the massive US Federal Reserve credit-expansion campaign engineered by the pushdown on the Fed funds rate (chart below), dragging the dollar down with it.


That summarizes why the dollar is heading lower. It's an unbalanced financial world and the US needs to get its financial house in order. If the recommended solution is followed, it means the dollar goes even lower. But if all the players don't agree on the recommended solution, we could face a dollar and global financial crisis.

The solution: A new Plaza Accord
In an article in the Financial Times, financial analyst Peter Bernstein says it is time for another Plaza Accord. On September 22, 1985, the ministers of finance and governors of central banks of France, Germany, Japan, the United Kingdom and the United States signed an accord at the Plaza Hotel in New York stating that the signatories "were of the view that recent shifts in fundamental economic conditions among their countries, together with policy commitments for the future, have not been reflected fully in exchange markets ... In view of the present and prospective changes in the fundamentals, some further orderly appreciation of the main non-dollar currencies against the dollar is desirable. They stand ready to cooperate more closely to encourage this when to do so would be helpful."

Bernstein points out that the dollar dropped 30% in the next two years and by 1991, the current account was "just about in balance". But the financial environment now is difficult and complicated. The risks are greater. Bernstein believes it is important for the dollar to fall in an orderly fashion. The funding arrangement can't go on indefinitely in this environment.

Private capital inflows into the US are already shrinking. There is a point at which one or other central bank will cry "Enough!" and the house of cards will cave in. Indeed, China has already begun diversifying its foreign-exchange reserves into other currencies and investments. Protectionist pressures are developing within the US, which - to borrow the Plaza Accord's words - "if not resisted, could lead to mutually destructive retaliation with serious damage to the world economy". At the same time, Americans are creating the means for foreign nations to blackmail them over unpopular US policies by threatening to cease accumulating dollars, thus prompting the dreaded crisis.

It's clear there is no easy way out of this mess. Another Plaza Accord is the best available alternative, according to Bernstein and many others. Otherwise, we could see a sharp rise in protectionism in the US, which "would immediately invite retaliation abroad".

Here is how a coordinated decline in the US dollar is supposed to rebalance an unbalanced world:

1) A global agreement to let the dollar fall (explicit or implicit) leads to:
(i) Gradual increase in US interest rates
(ii) Dampening of US consumer demand
(iii) Increased domestic savings, reducing the dependence on foreign funds
(iv) Making US bonds more attractive for new buyers to help maintain capital flows to US.
2) A weaker dollar pressures European and Asian exports by:
(i) Forcing them to focus on domestic demand compensating for lower exports and decline in US consumer demand
(ii) Increasing US exports and reduces global trade tensions
3) Ultimately leading to improvement in the US current account and more productive use of surpluses in Europe and Asia.
That's the theory. But it requires that the players read from the same sheet of music.

If the dollar continues to fall, but Asia does not allow its currencies to rise in response, the burden of dollar weakness will be borne by Europe. And European policymakers are not about to sit idly and let that play out. (We are already seeing it as the euro rally continues.) At present, without a dollar accord, the United States' benign neglect is acting as a wedge to pressure Europe to push harder for Chinese revaluation. But it's unclear whether China is willing to "bear its burden".

Li Ruogu, deputy governor of the People's Bank of China, in a recent interview said the US "blames others" for its problems. China is in no hurry to change the yuan's peg to the dollar, he said. "Under heavy speculation we cannot move [toward greater flexibility] and under heavy external pressures we cannot."

If China doesn't revalue in some form or fashion, protectionism could rear its ugly head. But if China does revalue, some think it could be the worst possible outcome. There is no solution without risk. It shows just how delicate the balance is in a dynamic financial system.

A gamble either way

When Japan "revalued" the yen back in the early '80s, it created an enormous bubble in its stock and property markets. It's another matter that traders are ready to pounce if China "toes the line".

But China is already in Bubblesville. "It's extremely unlikely they could create a bigger one," believes Andy Xie of Morgan Stanley. Xie believes a Chinese revaluation would be disastrous for the Chinese economy because the financial system is not sophisticated enough to deal with more financial pressure.

Xie is not the only one worried. In a recent interview, Bank of Japan governor Toshihiko Fukui said: "I understand the feelings of people who tend to focus on just China's exchange rate [regime], but this should be combined with the wider issue of how to make the Chinese economic system more flexible. This includes the deregulation of the financial system, capital account convertibility, and achieving soundness of the banking system. Without these across-the-board initiatives, just changing the exchange-rate regime would cause disruption to the Chinese economy."


The China peg is a stabilizer, says Xie. A lifting of the peg could lead to a "dollar crash" because demand from ethnic Chinese would plummet. In fact, we are already seeing Chinese citizens dumping the dollar in favor of their own "hard" currency.

Domestic Chinese sold $20 billion in US dollars during the first six months of 2004, according to the State Administration of Foreign Exchange.

There are interesting financial parallels shaping up between now and the mid-1980s:


Go-go '60s stock market boom (conglomerates craze)'90s stock market boom (Internet craze) Vietnam quagmire and communist dominoesIraq quagmire and "war on terror"Soaring budget deficit Soaring budget deficit Rising energy pricesRising energy pricesRising interest rates to stem inflationRising interest rates to "normalize" the Fed funds rateSoaring commodity prices (inflation-driven)Rising commodity prices (for now, supply/demand imbalance) Japanese revaluationChinese revaluation?

If the delicate relationship between the dollar and global capital flows isn't engineered with some degree of precision, we could be adding a stock market crash to the columns of "Then" vs "Now". And keep in mind, the 1987 crash was a global affair.

We are in a precarious macro environment. Have we seen this all before?

1) Fed funds rate slashed lower into 2004 ...

2) Fed funds rate slashed lower into 1987 ...

3) Rising euro (falling dollar) coinciding with a sharp rise in the stock market ... from 2002 through 2004 ...

4) Rising euro (falling dollar) coinciding with a sharp rise in the stock market ... 1985 through 1987 ... before it crashed!

The pressure grows on China, internally and externally, for some type of revaluation. Its decision could ultimately spawn global financial healing or spark a global financial crisis.

Pick a color. Pick a number. Lay down your money. And spin the wheel.

Asia Times (http://www.atimes.com/atimes/Global_Economy/FK25Dj02.html)


26.11.2004, 16:15
Artikel 1: Zeit-Fragen Nr.45 vom 22.11.2004

Der Welt-Geldbetrug
von Prof. Dr. Eberhard Hamer, Mittelstandsinstitut Hannover
Der grösste und weitreichendste Wirtschaftsskandal unserer Tage findet zurzeit durch die Manipulationen an den Geld- und Währungssystemen statt. Der Geldbetrug hat erstmalig eine globale Dimension, weil er sich weltumspannend abspielt, von keiner nationalen Regierung deshalb mehr kontrolliert, gestoppt oder verhindert werden kann, und weil er sogar nach den veralteten nationalen Gesetzen formell legal stattfindet. Sicher ist aber, dass der Geldbetrug wie jeder andere Betrug auch nicht langfristig zur Bereicherung der Täter durch Entreicherung der Opfer führen kann, weil kein freies Geldsystem auf Dauer missbraucht werden kann.

Nach der Finanztheorie ist Geld ein legalisiertes Tauschmittel, welches auch zur Wert-aufbewahrung dienen soll. Die Ausgabe von Geld war deshalb früher staatliches Privileg (Münzhoheit). Die als Geld umlaufenden Gold-, Silber- und Kupfermünzen hatten staatliche Prägung. Der Staat garantierte also die Reinheit des Metalls und das Gewicht der Münzen, so dass man nicht nur im Inland, sondern auch im Ausland jederzeit wusste, wieviel jedes Geldstück wert war. So waren die Metallmünzen zugleich Tauschmittel und Dauerwert.

Der Staat musste aber, um Geld ausgeben zu können, Gold und Silber haben. Deshalb war es wichtig, dass zum Beispiel Silberbergwerke in staatlicher Hand waren (Rammelsberg bei Goslar) und auf diese Weise der Staat das Silber für zusätzliche Prägemünzen einsetzen konnte. Umgekehrt wussten die Bürger, dass der Staat nur soviel Geld ausgeben konnte, wie er über Edelmetall verfügte. Der Edelmetallvorrat war also die Basis für das in Edelmetall umlaufende Naturalgeld (Goldumlaufwährung).

Vom Realgeld zum Nominalgeld
Immer wieder haben Fürsten allerdings versucht, sich mehr Geld zu verschaffen, als sie Edelmetall hatten, indem sie den Anteil des Edelmetalls bei den Münzlegierungen verminderten («kippen und wippen»). Das Ergebnis war jeweils, dass die Kaufleute und Bürger das schlechte Geld weitergaben, das gute aber behielten, bis alle Bescheid wussten und das schlechte Geld wieder eingeschmolzen werden musste. Goldumlaufwährungen gab es noch bis zum Ersten Weltkrieg.

Jede Goldumlaufwährung hat allerdings den Nachteil, dass Gold nicht so stark vermehrbar ist, wie die Wirtschaft wächst, dass also eine gewisse deflatorische Geldknappheit stärkeres Wirtschaftswachstum behindern könnte. Deshalb gingen viele Staaten zu einer indirekten Goldwährung über: Sie hatten einen bestimmten Goldschatz und gaben auf dieser Basis staatliche Zentralbanknoten aus, die im täglichen Gebrauch leichter zu transportieren, zu zählen und auch in höheren Summen aufzubewahren waren. Ihr Wert beruhte darauf, dass man die Geldscheine jederzeit bei der Zentralbank vorlegen und in entsprechendes Gold oder Silber umtauschen konnte (Goldkernwährung). Auf diese Weise konnte der Staat sogar mehr Nominalgeld ausgeben, als er an Edelmetall verfügbar hatte, denn üblicherweise bestanden nur wenige Geldscheininhaber auf dem Umtausch ihrer Scheine in Gold. Normalerweise reichte also ein Volumen von weniger als 10% Gold für ein Währungsvolumen einer um 90% höheren Geldscheinmenge.

Das System funktionierte weltweit, weil auch Länder, die selbst keinen Goldschatz hatten, den Inhabern ihrer nationalen Geldscheine einen festen Umtauschkurs zu anderen Währungen garantierten, die ihrerseits wieder einen Goldkern hatten. Solange diese Umtauschgarantie bestand, konnten die Bürger darauf vertrauen, dass sie - wenn auch über doppelten Umtausch - die Geldschein-Nominalwerte in Münzrealwerte umtauschen konnten (Golddevisenwährung), hatten also eine zumindest indirekte Geldwertgarantie.

Vom staatlichen zum privaten Geld
Der entscheidende Schritt weg vom Staatsgeld war 1913 die Gründung des Federal Reserve System in den USA. Obwohl nach der amerikanischen Verfassung eigentlich nur Gold und Silber gesetzliches Geld sein dürfen, hat sich ein von privaten Banken gegründetes Kartell unter Führung der beiden Grossfinanzgruppen Rothschild und Rockefeller eine private Zentralbank geschaffen mit dem Recht, eigenes Geld auszugeben, welches gesetzliches Zahlungsmittel wurde und für welches anfangs noch die amerikanische Zentralregierung garantierte. In dieser privaten Bank wurden nach dem Ersten Weltkrieg die Goldreserven der Welt zusammengekauft, mit der Folge, dass viele andere Währungen ihren Goldstandard nicht mehr halten konnten und in der Deflation zusammenbrachen (erste Weltwirtschaftskrise).

Am Ende des Zweiten Weltkriegs wurde deshalb 1944 in Bretton Woods wieder die Einführung eines neuen Golddollarstandards beschlossen. Während des Weltkrieges verlangten die USA für die Bezahlung von Rüstungsgütern Gold von den kriegführenden Nationen. Auch das Gold Deutschlands musste als Kriegsbeute abgegeben werden. So sammelten sich über 30000 Tonnen Gold der Welt allein in den USA - mehr als alle anderen zusammen hatten. Dieses Gold diente als Deckung für die Dollars. Da aber ein grösserer Teil der Dollars in den Zentralbanken der Welt als Reservewährung gehalten wurde, konnten die USA mehr Dollars ausgeben als sie an Goldbasis hatten. Die Länder der Welt brauchten nämlich Dollars, um die Rohstoffe dafür zu kaufen, die nur auf Dollarbasis gehandelt wurden. Neben dem Gold wurde deshalb der Dollar immer stärker in den anderen Zentralbanken zur Hauptwährungsreserve. Die Dollarherrschaft über die Welt hatte begonnen.

1971 kündigte US-Präsident Nixon die Einlösungspflicht des Dollars in Gold (Golddollarstandard) und zugleich die Haftung des Staates für den Dollar auf. Seitdem sind die Dollarnoten weder real durch Gold noch durch Staatshaftung gedeckt, also eine freie private Währung der Federal-Reserve-Bank (FED). Der Dollar und alles andere Geld der Welt sind seitdem nicht mehr werthaltig, sondern nur noch gedrucktes, legalisiertes Zahlungspapier.

Eine durch nichts gedeckte Währung kann zwar durch Gesetz zum amtlichen Tauschmittel erzwungen werden, nicht jedoch zum Mittel der Wertaufbewahrung. Hierzu bedarf es des Vertrauens der Geldinhaber, dass sie ihr Geld langfristig wertgesichert sehen. Der langfristige Kurswert - das Vertrauen - einer freien Quantitätswährung hängt wiederum allein von der Knappheit des Geldes bzw. der Geldmenge ab. Das Problem: Während sich in den letzten 30 Jahren die Gütermenge der Welt nur vervierfachte, hat sich die Geldmenge vervierzigfacht.

Geldmengenvermehrung bedeutet nämlich immer Inflation. Und Inflation bedeutet Geldentwertung. Für dieses Problem wurden drei Lösungswege beschritten:

Die deutsche Finanzwissenschaft hatte schon bei der Bundesbankgründung eine staatsunabhängige neutrale «vierte Gewalt» für die Bundesbank gefordert, damit diese den politischen Pressionen zum Geldmengenmissbrauch widerstehen könne, damit der Bürger sich also auf die Werthaltigkeit des Geldes verlassen könne. Tatsächlich ist die Bundesbank gesetzlich zur Werthaltigkeit der D-Mark verpflichtet gewesen (Neutralgeldtheorem) und war weitgehend staatsunabhängig. Dies hat dazu geführt, dass die D-Mark als stabilste Währung der Welt immer mehr auch Währungsreserve und bevorzugte Wertanlage wurde.
Die meisten anderen Staaten haben eine «orientierte Quantitätswährung» bevorzugt. Sie verpflichteten ihre Zentralbanken, die Geldmenge an bestimmten Zielen zu orientieren, wie zum Beispiel Wachstum, Vollbeschäftigung oder anderen. Dies gab der nationalen Politik ausreichend Einflussmöglichkeiten auf die Zentralbank und auf das Geld und hat regelmässig dazu geführt, dass der politische Missbrauch zu entsprechender Inflationierung der Währungen geführt hat. (Beispiel: Frankreich, Italien, Spanien usw.)
Die meisten Diktaturen der unterentwickelten Länder und das private Federal-Reserve-System dagegen bevorzugten eine «freie Quantitätswährung», also eine Währung, deren Missbrauch durch die Politik oder durch die privaten Zentralbankeigentümer nicht gesetzlich beschränkt wurde. «Freie Quantitätswährung» hat immer «Freiheit zum Missbrauch der Währung» bedeutet und nie langfristig funktioniert.
Vor allem führt ein Nebeneinander von Währungen, die teils von einer unabhängigen Staatsbank in ihrem Wert gehalten werden - wie die D-Mark - oder andererseits von abhängigen Staatsbanken oder sogar von Privatbanken nach deren jeweiligen Zwecken frei manipuliert werden, zu erheblichen Kursspannungen: Weil die Deutsche Mark durch die Bundesbank relativ wertstabil gehalten wurde, andere wichtige Währungen sich dagegen durch Geldmengenvermehrung und Inflation immer stärker wertminderten (Abwertung), versuchen die Geldwertbesitzer naturgemäss, mit ihren längerfristigen Dispositionen in harte Währungen zu gehen und weiche zu meiden.

So wurde die Deutsche Mark in Konkurrenz zum Dollar immer stärker auch Währungsreserve von Wirtschaft und Zentralbanken in der Welt. Vor allem aber wurde an der «harten» Währung deutlich, wie weich eine ständige Geldmengenvermehrung die inflationierten Privat- oder Staatswährungen gemacht hatte. Die der Geldwertstabilität verpflichtete Bundesbank wurde so zum gemeinsamen Störer im Chor der Geldmengenvermehrer und Inflationisten des Weltwährungssystems - kein Wunder, dass dieser Störer durch Abschaffung der Deutschen Mark und Einbindung in eine wieder mehr von der Politik gesteuerte, nicht mehr souveräne Europäische Zentralbank ausgeschaltet werden musste. Kohl hat dafür gesorgt, dass dies «im kleinen Kreise» entschieden wurde, dass die deutsche Bevölkerung über den Verlust ihrer werthaltigen Währung nicht abstimmen durfte («Wo kommen wir hin, wenn die Bevölkerung über so wichtige Dinge selbst entscheiden sollte?»). Die Bevölkerung hätte nie freiwillig die solide D-Mark geopfert.

Inzwischen hat also keine Währung der Welt noch irgendeine reale Wertgrundlage, hat sich das Geld der Welt von jedem zugrundeliegenden Sachwert gelöst, wird es als Papier hemmungslos neu gedruckt und durch ständige Vermehrung ständig entwertet. Dass die Leute immer noch glauben, das Geldpapier, welches sie in der Hand haben, habe einen festen Wert, liegt daran, dass durch geschickte Manipulation der Devisenkurse ein scheinbares Wertverhältnis vorgespiegelt wird. Diese Devisenkurse werden nämlich von genau den gleichen Gruppen manipuliert, die auch die Geldmengenvermehrung produzieren.

Praktisch hat inzwischen das von der US-Grossfinanz gesteuerte und ihnen gehörende private Federal-Reserve-System Welt-Geldbedeutung erlangt:

Das FED-Privatgeld Dollar ist schon von der Geldmenge her in der Welt dominierend. Mehr als 75% aller Geldquantitäten sind Dollars.
Die US-Grossfinanz hat auch die von ihnen kontrollierten Rohstoffmärkte gezwungen, nur in Dollars zu verkaufen. Wer sein Öl nicht gegen wertlose Dollars, sondern gegen Euro verkaufen will, wird zum Terroristen erklärt (Saddam).
Auch die Zentralbanken der übrigen Länder werden gezwungen, die Dollars in immer stärkerem Masse (Euro-Bank über 90%) als Währungsreserven anzunehmen. Die übrigen Währungen, wie zum Beispiel der Euro, beruhen also in ihrem Wert zu über 90% auf wertlosen, nur durch die Macht und den Willen der US-Grossfinanz gehaltenen Dollar-Papieren.
Inzwischen wurden sogar die Nationalbanken sanft oder hart (Schweiz) gedrängt, ihre Goldvorräte gegen Dollars abzugeben oder «auszuleihen». Das Gold der Welt hat sich dadurch wiederum wie vor der ersten Weltwirtschaftskrise bei den Eigentümern des Federal-Reserve-Systems konzentriert, so dass ein neuer Goldstandard nur mit deren Willen und nach deren Diktat wieder einzuführen wäre und die FED-Eigentümer mit einer Neufestsetzung des Goldpreises (Greenspan: «Möglicherweise bis 6000 Dollar.») allein dadurch im Falle einer Währungsreform ein Jahrhundert-geschäft machen würden.
Die US-Grossfinanz steuert also über die ihr gehörende FED letztlich das Geld und die Währungen der ganzen Welt. Der Dollar ist privates Geld dieser US-Grossfinanz, von niemandem ausser von ihr garantiert, aber nach Kräften missbraucht, vermehrt und zum Instrument ihrer Weltherrschaft und zum Hilfsmittel für den Raub aller wichtigen Rohstoffe und Sachwerte der Welt missbraucht.

Durch ungehemmte Vermehrung des Dollars hat natürlich die ausgebende US-Gross-finanz unbegrenzte liquide Mittel, mit denen sie die ganze Welt kaufen kann. Aber auch der amerikanische Staat kann durch die Dollarvermehrung mehr ausgeben, als er einnimmt (Schuldenreiterei). Missbrauch des Dollars durch Geldmengenvermehrung ist also sowohl für die herrschende US-Finanz als auch für die von ihr beherrschte US-Administration einseitiger Vorteil. Deshalb hat sich das Dollarvolumen in den letzten 10 Jahren immer schneller vermehrt.

Ebenso haben sich die Schulden des amerikanischen Staates gegenüber dem Ausland drastisch vermehrt. Der US-Staat lässt sich also in immer grösserem Ausmass von der Welt Sachgüter gegen wertlose Scheinchen liefern - die moderne Form der Tribute.

Dass diese ungehemmte Dollarvermehrung nicht längst den Dollarabsturz und zur Zurückweisung des Dollars durch die Kunden geführt hat, ist kluger Regie und Erpressung zu verdanken: Die US-Grossfinanz und die US-Administration zwingen seit Jahren wirtschaftlich und politisch die wichtigen Zentralbanken der Welt (Eurobank, Japan, China und andere), die bei ihnen sich für Exporterlöse oder als Kaufpreise für den Aufkauf von Sachgütern ansammelnden wertlosen Dollars zu behalten und als angeblich werthaltige Devisenreserve zu halten. Praktisch heisst das: Die Zentralbanken in China, Japan und Europa sammeln die für die Sachwertlieferungen ihrer Bürger einkommenden wertlosen Dollars in immer grösseren Beständen als angeblich werthaltige Währungsreserve an. Die Währung der Satellitenstaaten wird also und ist bereits mit immer wertloseren Dollars unterlegt - also praktisch ebenso wertlos geworden. Somit sind alle im gleichen Geldentwertungsboot: Die Urheber der Geldmengenvermehrung in New York und Washington ebenso wie die Helfer der Geldmengenvermehrung in den Zentralbanken der Satellitenstaaten.

Damit aber hat es der Schuldner USA selbst in der Hand, wie stark er durch offizielle Abwertung des Dollars schliesslich seine Gläubiger entreichern - betrügen - und sich auf deren Kosten wieder entschulden will. Jede Abwertung des Dollars wird vor allem das 80% aller Dollars haltende Ausland entreichern. Dem Schuldner steht es frei, wie stark er seine Schulden abwerten und damit seine Gläubiger betrügen will.

Dem Publikum wird inzwischen allerdings mit manipulierten Kursen und Kurspflege suggeriert, die missbrauchten Währungen und das hemmungslos vermehrte Geld hätten immer noch einen soliden Kurswert.

Würden die Geldbesitzer wissen, dass sie eigentlich nur Papierwert in den Händen haben, alles andere aber von den Manipulationen, den Missbräuchen, der Macht und den Zwecken der US-Grossfinanz abhängt,

würde die Geldumlaufsgeschwindigkeit wegen Zurückweisung des Geldes stärker steigen,
würde eine Flucht in die Sachwerte einsetzen,
und damit eine dramatisch steigende bis galoppierende Inflation beginnen,
würde die längst geschehene Entwertung der Geldwertanlagen der Bürger (Geldpapiere, Renten, Fonds und andere) sich in einem zweiten Börsencrash auflösen und zusammenbrechen,
und würden ganze Branchen der Finanzindustrie und Finanzdienstleistung unter Haftungsprozessen wegen der Entwertung zusammenbrechen,
so dass eine Währungsreform unvermeidlich wird.
Noch wird die Illusion des Geldwertes trotz dramatischer Entwertung durch den Zwang eines gesetzlichen Zahlungsmittels künstlich aufrechterhalten. Nutzniesser dieses Systems sind nicht nur die US-Grossfinanz, welche durch ihre FED immer hemmungsloser Dollarmengen in die Welt jagt, sondern auch die dieses Spiel mitbetreibenden Zentralbanken, wie zum Beispiel die Eurobank, die Banque of Japan und andere. Die Vorstände dieser Banken wissen genau, wie wertlos der Dollar inzwischen ist, stützen aber immer noch die gesetzliche Illusion der Zahlungsmittelfunktion des Dollars, haben sogar aus politischen Gründen geschwiegen und die eigene Währung nahezu ausschliesslich mit wertlosen Dollars in ihrer Währungsreserve unterlegt, also ihre Währung praktisch ebenso wertlos gemacht. Würde eine Währungsreform kommen, stünde zum Beispiel die Eurobank ohne Werte da. Das Gold - auch das deutsche Gold - ist mutmasslich nur noch als blosser schuldrechtlicher Rückgabeanspruch vorhanden, nicht mehr aber als Realgold. Es ist zumeist angeblich naturaliter an die private Federal Reserve Bank und von dieser weiter verliehen, also im Zusammenbruch nicht mehr greifbar. Das System lebt davon, dass ein Missbrauch nicht diskutiert und nicht veröffentlicht wird.

Tatsache 1: Die wichtigsten Währungen der Welt sind so hemmungslos vermehrt worden und stehen auf so tönernen Füssen, dass ihre Währungen (Dollar, Euro, Yen und andere) keine echte Wertaufbewahrungsfunktion für die Bürger mehr haben.

Tatsache 2: Auch die Tauschfunktion der Währungen wird nur durch Manipulation und Täuschung über einen angeblichen - aber nicht vorhandenen - Kurswert künstlich aufrechterhalten und ist längst nicht mehr echt.

Tatsache 3: Das Privatgeld (Dollar) der US-Grossfinanz ist längst von allen Bindungen an Sachwerte (Gold) oder einer Geldmengenbindung befreit, hat also nicht nur seine Wertaufbewahrungsfunktion verloren, sondern täuscht auch die Welt nur noch durch weltweite Kursmanipulation über einen scheinbaren Tauschwert des durch hemmungslose Vermehrung entwerteten Privatgeldes. Nur durch diese Täuschung und die Macht der US-Grossfinanz wird noch künstlich «Vertrauen» der Welt in den Dollar suggeriert. Wüssten die Marktteilnehmer dagegen, dass sie mit dem Nominalwert des Geldscheins nur ein wertloses Wertversprechen von Privatleuten in den Händen haben, denen längst nicht mehr zu trauen ist, die ständig ihre Macht, den Geldwert zu manipulieren, missbrauchen, so würde auch das Vertrauen in diese Privatwährung Dollar zusammenbrechen.

Mit dem Geld ist es so wie mit den Aktien. Auch die meisten Aktien sind keine Substanzwerte, sondern nur Hoffnungswerte. Wer in der grossen Aktienhausse glaubte, viel gewonnen zu haben, wurde beim Ak-tiencrash darüber belehrt, dass die Aktie ausser dem Papierwert nur noch Hoffnung trägt, diese aber leicht schwinden kann. Gewinn oder Verlust im Börsenspiel sind reine Hoffnungswerte, keine Sachwerte. Ebenso ist es mit dem Geld. Einziger Sachwert ist der Wert des Papiers. Alles andere ist Hoffnungswert im Vertrauen auf die korrupten, aber stärksten Finanzmächte der Welt.

Mit Scheingeld zu Sachwerten
Würden die Marktteilnehmer wissen, dass unser Geldsystem letztlich am Privatgeld Dollar und dieses Geld ohne jeden Wertbezug allein an den Manipulations- und Missbrauchswünschen der grossen Finanzoligarchie hängt, dann würden die Menschen ihr Währungsvertrauen verlieren, ihr Geld nicht mehr als Wertaufbewahrungsmittel betrachten, sondern der laufenden Geldentwertung durch Flucht in die Sachwerte zu entgehen versuchen.

Genau dies tun die hinter der FED stehenden Täter der grössten Geldvermehrung aller Zeiten: Sie kaufen mit dem immer wertloser werdenden Geld seit Jahrzehnten alle Sachwerte auf, die sie noch erwischen können: Rohstofflager, Industriekomplexe, Immobilien und jede einigermassen intakte ausländische Kapitalgesellschaft in freundlicher oder feindlicher Übernahme zu fast jedem Preis. Und nicht nur die US-Grossfinanz sammelt die Sachwerte der Welt ein, sondern auch der amerikanische Staat importiert für Fiat-Money (gedrucktes, eigentlich wertloses Geld) seit Jahren mehr Sachgüter aus der Welt, als er bezahlen kann, und verschuldet sich dafür hemmungslos im Ausland - solange die ausländischen Gläubiger noch an den Wert des Dollars glauben oder mit politischer Erpressung gezwungen werden können, die faulen Dollars in ihre Währungsreserven anzunehmen.

Mit Sachwerten zu Monopolen
Die hinter der FED stehende Grossfinanz hat auf diese Weise durch gezielte Sachwert-politik ganze Marktsegmente mit ihren faulen Dollars aufgekauft und zu Marktmono-polen bzw. -oligopolen entwickelt: Diamanten, Gold, Kupfer, Zink, Uran, Telekommunikation, Gasfaserleitungsnetze, Print- und Fernsehmedien, Nahrungsmittel (Nestlé, Coca-Cola), grosse Teile der Rüstungsindustrie und der Luftfahrt usw.

Zurzeit läuft ein Monopolisierungsversuch mit Hilfe der Gen-Manipulation. Genmanipulierte Tiere und Pflanzen sind selbst unfruchtbar. Wenn man also die Genmanipulation flächendeckend durchsetzen kann, müssen alle Bauern einer Firma mit einem Patentmonopol das Gen-Saatgut zu dem von ihr festgesetzten Monopolpreis abkaufen, können sie nicht mehr ihr selbst geerntetes Getreide zur Saat verwenden.

Ein anderes Monopolisierungsspiel läuft zurzeit auf dem Zuckermarkt: Die EU hat ihren Zuckermarkt durch eigene Marktordnung geregelt, um den Bauern die Rübenzuckerproduktion zu erhalten, die für viele von ihnen existenznotwendig ist. Der Rübenzucker ist aber teurer als der in den Tropen wachsende Rohrzucker des US-Kartells. Die der US-Grossfinanzgruppe gehörenden Firmen Nestlé und Coca-Cola verlangen nun gemeinsam mit von ihr abhängigen Wissenschaftern und Politikern eine «Liberalisierung des Zuckermarktes» und betreiben dies über die internationalen Gremien (GATT, Mercosur). Sobald diese Liberalisierung durchgesetzt ist, kann sich der teurere Rübenzucker gegen den billigeren Rohrzucker nicht mehr halten, bricht die europäische Zuckerproduktion endgültig zusammen und wird der Zuckermarkt - anfangs billiger, nachher aber teurer - durch das von der US-Grossfinanz beherrschte Rohrzuckerkartell überschwemmt.

Mit welchen kriminellen Methoden die US-Grossfinanz dabei ganze Branchen in ihre Hand bekommt, zeigt der Fall Primacom: Dieser Kabelnetzbetreiber operiert höchst lukrativ, steht aber schon länger im Visier der US-Grossfinanz (Telekommunikations-Monopolisierung). Diese hat deshalb erst den Vorstand von Primacom unterwandert und dann diesem Vorstand ein Darlehen mit mehr als 30% Jahreszinsen oktroyiert, so dass die eigentlich gut operierende Firma wegen der Zinslasten in Schwierigkeiten geriet und nach Ansicht der US-Bank «jetzt billigst übernahmereif» wurde. Das Spiel geht gerade in die letzte Runde.

Ein ähnliches Spiel hat der Abgesandte der US-Grossfinanz Ron Sommer mit der Deutschen Telekom versucht. Die US-Grossfinanz sammelt alle Telekommunikations-Gesellschaften, um sie weltweit zu monopolisieren. Der Abgesandte Sommer hat dazu eine kleine US-Firma der Telekom zum dreissigfachen Preis (30 Mia. US-Dollar) von der US-Grossfinanz gekauft, damit diese aus eigenem Vermögen der Telekom diese aufkaufen konnte. Der zweite Schritt war, die Telekom-Aktien billig zu machen, damit der US-Investor sie billig bekam. In diesem Spiel ist allerdings Ron Sommer über seine Grenzen gegangen und gescheitert. Dies wird aber die US-Grossfinanz in ihren Übernahmeplanungen nur zurückwerfen, nicht hindern. Privatisierung und Aufkauf der Telecom gehen planmässig weiter.

Ein gleiches Spiel vollzieht sich auch auf dem Welt-Energiemarkt, in Deutschland offensichtlich mit EON und RWE, wobei die US-Grossfinanz bereits eigene Vertrauensleute in die für die Übernahmekandidaten entscheidenden Banken und Vorstände entsandt hat. In 20 Jahren will die US-Grossfinanz auch das Wasser der Welt - nach Aussage ihres Vertreters Brzezinski - monopolisiert haben.

Mit Sachwerten zur Währungsreform
Deutet man den Fahrplan der Welt-Grossfinanz richtig, so soll die Geldmenge so lange vermehrt und entwertet werden, bis damit alle wichtigen Sachwerte der Welt aufgekauft und monopolisiert worden sind. Die Grossfinanz ist klug genug zu wissen, dass ihre Geldmengenvermehrung nicht unerkannt bleibt und irgendwann das Vertrauen in den inflationierten Dollar schwindet. Ein Ausbruch der Vertrauenskrise wird die jetzt noch beherrschte, schleichende Inflation zur galoppierenden offenen Inflation machen, die zwangsläufig in eine Währungsreform einmünden muss.

Dies aber ist genau der Vorteil sowohl der Grossfinanz als auch der USA:

Die Grossfinanz hat mit den faulen Dollars vorher ausreichend Sachwerte gekauft, wird also von der Währungsreform mit ihren Sachwerten nicht mehr betroffen, hat sich rechtzeitig aus dem faulen Geld in werthaltiges Vermögen verlagert. Da sie in vielen Bereichen inzwischen Weltmonopolstellungen erreicht hat, kann sie sogar die Welt jederzeit mit Monopolpreisen zu Sonderabgaben heranziehen. Nicht mehr Steuern sind dann das Einkommen der Welt-Herrscher, sondern Monopolerträge. Niemand kann die Grossfinanz hindern, die Preise für Gold, Diamanten, Kupfer, Zink, Eisenerz, Wasser, Saatgut oder Energie um 10, 20 oder 30% anzuheben und auf diese Weise die gesamte Weltbevölkerung zu Sonderabgaben heranzuziehen. Noch nie hat es eine solche Finanzmacht der Welt gegeben, noch nie war sie für die Gesamtbevölkerung der Welt so gefährlich.
Listigerweise hat die US-Grossfinanz die faulen Dollars überwiegend ins Ausland gebracht. Mehr als Dreiviertel der gesamten Dollarbestände sind nicht mehr in den USA, sondern sind bei den Gläubigerstaaten der USA. Die USA haben sich nämlich in den vergangenen Jahren immer kräftiger gegenüber dem Ausland verschuldet. Das Ausland hat Güter geliefert (Sachwerte), dafür aber wertlose Dollars bekommen. Alle Zentralbanken sind voll mit faulen Dollars. Werden diese nun plötzlich entwertet, trifft der Schaden zu mehr als Dreiviertel die Zentralbanken, Banken, Staaten und Marktteilnehmer ausserhalb der USA. Dann rächt sich, dass die Europäischen Zentralbanken ihr Gold gegen faule Dollars abgegeben und dafür immer ausschliess-licher Fiat-Money als Basis (Währungsreserve) für die eigene Währung, zum Beispiel Yen oder Euro, eingesetzt haben. Bricht also die Leitwährung Dollar zusammen, werden zwangsläufig auch die Satellitenwährungen mit zusammenbrechen, deren einzige Basis ein Bestand an faulen Dollars ist. Mit anderen Worten: Die sich abzeichnende Währungsreform des Dollars zieht zwangsläufig eine Weltwährungsreform aller Währungen nach sich, für welche der faule Dollar jetzt noch Hauptwährungsreserve darstellt.
Dass aber jede pausenlose Vermehrung eines Privatgeldes - des Dollars - durch die der US-Grossfinanz gehörende Federal Reserve Bank zur Aufweichung der Dollar-Währung zu immer stärkerer Inflation und schliesslich zur Währungsreform führen muss, ist finanzwissenschaftliches Grundwissen und dürfte nicht einmal Greenspan und seinen Mittätern zweifelhaft sein.

Durch Währungsreform zur Weltwährung
Greenspan hat in einer Rede unvorsichtigerweise geäussert, dass «wohl bis 2007 eine grundsätzliche Dollar-Korrektur anstehe und dass man dann zweckmässigerweise den Dollar und den Euro zum 'Euro-Dollar' einer neuen Welt-Währung vereinigen könnte». Das macht aus Sicht der US-Grossfinanz Sinn, denn längstens bis 2007 sind die Dollar-Missbräuche noch durchzuhalten, bis dahin dürfte längstens das Vertrauen der Welt in diese hemmungslos vermehrte, immer wertloser gewordene und nur noch künstlich aufrechterhaltene Privatwährung der US-Grossfinanz halten. Irgend etwas wird also in nächster Zeit mit dem Dollar geschehen. Würde dann der Dollar mit dem Euro zur Welteinheitswährung, würden damit für die US-Grossfinanz wichtige Ziele erreicht:

Eine neue Währung bietet die Möglichkeit, die alten Währungsschulden abzuwerten und damit die Gläubiger, die noch alte Währung haben, entsprechend zu entreichern. Wenn eben ein neuer Euro-Dollar 20 alte Dollar oder 15 Euro wert ist, sind die alten Währungen entsprechend abgewertet, sind die Gläubiger in alter Währung entreichert, hat sich das Spiel für die privaten Geldausgeber gelohnt.
Vor allem würde damit der US-Staat ebenfalls entschuldet: Seine jetzige Auslandsverschuldung von 5200 Mia. Dollar würde bei 50%er Abwertung nur noch 2600 Mia. Euro-Dollar betragen.
Geschädigt werden alle Inhaber von Alt-Dollars, deren Bestände um 50% oder sogar 90% abgewertet werden. Dies gilt insbesondere für die Zentralbanken von China, Japan und Europa mit ihren hohen Dollar-Währungsreserven.
Das Hauptziel der US-Grossfinanz ist aber, auf diese Weise eine Weltwährung zu erreichen, über die sie wiederum selbst herrschen. In einem Euro-Dollar-System würde zwangsläufig das der US-Gross-finanz gehörende Federal Reserve System eine Mehrheit haben, also die US-Grossfinanz dann auch mehrheitlich das neue Währungssystem beherrschen. Dazu auserwählt ist die BIZ (Bank für internationalen Zahlungsausgleich), eine private Organisation, deren Anteile mehrheitlich bereits von der US-Grossfinanz heimlich aufgekauft worden sind. Würde also die BIZ neue Zentralbank der Euro-Dollar-Währung, sind zufälligerweise wieder die gleichen Privateigentümer Haupteigentümer dieser neuen Zentralbank, die vorher auch Eigentümer der FED waren. Sie könnten dann das gleiche Spiel freier Geldausgabe nach eigenem Belieben, das sie mit dem Federal Reserve System bisher machen, wieder auf höherer Ebene - und dazu auch noch durch Währungsreform entschuldet - erneut -betreiben. Die bisherige Welt-Geldmengenvermehrung, der grosse Geldbetrug gehen dann in der Währungsreform unter. Ein neues System würde den alten Tätern wieder eine neue Währung in die Hände spielen und ihnen damit das neue Spiel mit der Weltwährung Euro-Dollar 20 bis 30 weitere Jahre erlauben.
Die US-Grossfinanz hätte also auf diesem Wege durch Geldbetrug nicht nur die Sachwerte der Welt bei sich monopolisiert - darunter so existenzwichtige Bereiche wie Saatgut, Nahrungsmittel, Wasser, Energie und Metalle, sondern darüber hinaus wiederum ein Währungsmonopol zur eigenen Bedienung, nach eigenem Belieben geschaffen - eine Geldvermehrungsmaschine wie den Dukatenesel im Märchen.

Auch mit Veröffentlichung dieses Geldbetrugssystems wird kein Aufschrei durch die Welt gehen. Man wird dies als «Verschwörungstheorie» oder als «Antiamerikanismus» oder sogar als «Antisemitismus» (Rothschild) abtun oder solche Veröffentlichungen ganz zu verhindern versuchen, denn immerhin gehören der US-Grossfinanz auch wesentliche Teile der Print- und Bildschirmmedien überall in der Welt.

Das Spiel zu durchschauen ist aber wichtig für Menschen, die durch dieses Spiel Verluste erleiden könnten. Wer also Finanzvermögen hat, sollte zuhören bzw. lesen.

Verlierer bei dem grossen Spiel der Finanz-oligarchie sind solche Marktteilnehmer in der Welt, welche dem Geld zuviel Vertrauen entgegenbringen, welche immer noch glauben, dass Geld über seine blosse Tauschfunktion hinaus auch noch Wertaufbewahrungsmittel sei. Die laufende Geldentwertung der vergangenen 40 Jahre hat offenbar die Menschen nicht klug gemacht. Sie wird in den nächsten Jahren galoppieren bis zum bitteren Ende, weil sie nämlich ein einseitiger Vorteil der Täter ist. Wer also auf langfristige Wert-erhaltung seines Vermögens Wert legt, kann nicht in Geldwerten, nicht in Versicherungsverträgen, nicht in Renten und nicht in Bargeld bleiben, er muss in Sachwerte gehen, wie dies die Grossfinanz selbst vorgemacht hat.

Strategieziel des Welt-Geldbetruges
Soweit von aussen her erkennbar, hat die US-Grossfinanz ursprünglich nur das Ziel gehabt, die US-Währung zu beherrschen und damit den US-Markt nach eigenem Willen manipulieren zu können. Diesem Ziel diente das private Zentralbanksystem FED. Als US-Präsident Kennedy ein Gesetz eingebracht hatte, dieses Privatfinanzsystem zu verstaatlichen, starb er eines plötzlichen Todes. Wer immer an diese Privatgeldmöglichkeiten der US-Grossfinanz rührte, verlor dabei Vermögen oder Leben.

Inzwischen aber sind die strategischen Ziele der US-Grossfinanz über die nationale Dimension weit hinausgewachsen. Ihr Ziel ist das globale private Geldsystem, welches sie mit der Vorherrschaft ihres Privatdollars und seiner Durchsetzung als Hauptwährungsreserve überall in der Welt weitgehend erreicht haben und nur noch mit einer Weltwährung - Euro-Dollar - formalisieren müssen.

Wenn wir also einen zweiten Missbrauch des Welt-Geldsystems zugunsten privater Grossfinanzgruppen und überhaupt den Missbrauch der Geldmengenwährungen verhindern wollen, muss jede Währung vor jedem öffentlichen oder privaten Missbrauch, vor jeder Deflations- und Inflationsmanipulation gesichert werden.

Das ist sicher nicht erreichbar, wenn man die Währung der privaten Grossfinanz überlässt. Sie wird die Missbrauchsmöglichkeit wieder nutzen und wieder zum eigenen Vorteil mit Geldmengenvermehrung die Welt betrügen und ausbeuten.

Die Erfahrungen haben aber auch gezeigt, dass die meisten Regierungen ihre Währungen ebenso missbrauchen, wenn sie die Möglichkeiten dazu haben, wenn sie also Einflussmöglichkeiten auf die Zentralbank und ihre Geldmengenpolitik haben.

Es gilt also, aus den Missbräuchen der öffentlichen Hände und der privaten Gross-finanz die Währungen so unabhängig zu machen, dass privater und öffentlicher Missbrauch ausgeschlossen werden.

Sicher ist eine auf Gold basierende Währung nicht so leicht zu manipulieren wie eine blosse Quantitätswährung. Die Probleme jeder auf Gold basierenden Währung liegen aber in der Verfügbarkeit von Gold, nachdem die US-Grossfinanz den grössten Teil des Weltgoldvorrates in ihre Hände bekommen hat. Sie würde also mit jeder Art einer auf Gold basierenden Währung wiederum Gewinner und Ausbeuter werden können.

Bleibt also nur die Lösung einer Quantitätswährung. Diese Quantitätswährung darf aber nicht frei, willkürlich bestimmbar bleiben, sondern muss an dem Neutralgeldziel orientiert werden. Die Geldmenge darf also nicht stärker wachsen als die Gütermenge. Aus dem monetären Sektor dürfen nicht wieder inflatorische oder deflatorische Effekte auf die Währungen und die Weltwirtschaft ausgehen.

Dies ist nur mit streng neutralen und so unabhängigen Zentralbanken erreichbar, dass sie gleichsam die «vierte Gewalt» darstellen, nicht in privater Hand liegen und nicht durch Regierungen beeinflusst werden können. Das Urmodell der Deutschen Bundesbank vor ihrer Kastration in die Euro-Bank kam dieser Unabhängigkeit sehr nahe.

Die kommende Währungsreform bietet eine einmalige Chance, die Täter, ihre Währungsmanipulationen und ihre Missbräuche zu brandmarken und damit eine allgemeine öffentliche Zustimmung zu einem weder von der privaten Grossfinanz noch von den Regierungen mehr beeinflussbares Zentralbankensystem zu schaffen. Dies wäre eine Jahrhundertchance.

Verhindert werden könnte ein unabhängiges Zentralbankensystem vor allem von der Grossfinanz, welche über die ihr schon gehörende BIZ bereits die Weichen für eine neue Übernahme des nächsten Zentralbanken- und Währungssystems gestellt hat. Deshalb tut Aufklärung not, um der Bevölkerung, Wirtschaft und Politik die Gefahr des Monopolkapitalismus nicht nur für die derzeitige Währung, sondern auch für ein neues Währungssystem aufzuzeigen.
Artikel 1: Zeit-Fragen Nr.45 vom 22.11.2004, letzte Änderung am 23.11.2004

27.11.2004, 13:05
It's Only a Matter of Time

David Chuhran
Nov 29, 2004

The USDollar's value is inversely proportional to the Fed's expansion of the money supply. The money supply has more than doubled since Bill Clinton ousted Lloyd Bentsen in December 1994 installing NY Banking insider Robert Rubin in his place. Much of that excess liquidity initially found its way into the stock market building up into the speculative blow-off in 2000. The ensuing recession brought fears of a monetary deflation, hence the Fed's 13 consecutive rate cuts which basically put the monetary gas pedal to the floor. Deflation was averted, for the time being, but that new flood of liquidity found its way into real estate, bonds, and once again into the stock market.

The USDollar has some catching up to do as it's only off its January 2002 high by just over 30%. To account for the last decade of domestic monetary dilution alone requires another 20+% drop taking the $USD Index into the 60's. The unknown effect lurking offshore lies in the global supply of USDollars which are uncounted. Should they wash ashore at high tide the drop in value could overshoot even the most pessimistic predictions.

More ominous than these almost fully developed new bubbles is the fact that the Fed-induced, artificially low interest rates spawned the derivative "carry trade." This is where financial institutions play, unregulated, OTC derivatives that borrow short term, low interest money and lend it out at higher rates for a longer term. They collect the "spread" between the long and short rates while betting that the Fed's well telegraphed bias will remain stable or loose causing the overall value of the underlying bond portfolio to grow or at least remain unchanged. In this situation, it's "free money" and everyone wanted in on the game.

These derivatives are so volcanic because they're all about leverage; and most large institutions can leverage at 20:1, but Fannie and Freddie's enormous size allows leverage as high as 50:1. The Bank of International Settlements, which is the principal center for international central bank cooperation, notionally valued global derivatives at the end of 2004Q2 just short of $220 Trillion. These derivatives are also experiencing a 23% year-over-year growth rate as banks and quasi-financial institutions, like GE and GM, play "pass the hot potato."

The problem comes in a rising rate environment, like we're entering now, where the value of the bond portfolios decrease. A very rough rule of thumb is every +1% rise in yield results in a -10% drop in the bond's value. Therefore, these highly leveraged institutions are setup to take massive losses; and this might explain KPMG's recent refusal to sign off on Fannie's quarterly report. Fannie now sits in violation of SEC rules with a realized, but so far unreported, $9 Billion loss on derivatives if they were accurately "marked-to-market." As institutions attempt to slowly back out of position, they're likely finding it an extremely delicate balancing act. Many have intricately interwoven webs that are unwieldy while others will remain until the last drop of "free money" is squeezed from the slowly dehydrating markets. This virtually ensures a disorderly unwinding of the "carry trade" as one large counter-party default has the potential to cause a domino-like collapse.

While the derivative problem hangs over the markets like a slowly melting ice ledge, that's sure to someday collapse under its own weight, the more immediate problem is the fact that the fiat paper USDollar is a fraud. A dollar is not really a dollar; it's a "Federal Reserve Note," issued by the non-governmental, private US central bank known as the Federal Reserve. It doesn't represent money as defined by the U.S. Constitution and it's backed by nothing of value; it's strictly faith-based! As G. Edward Griffin so accurately describes in his must-read book, "The Creature from Jekyll Island:"

"Since fiat money has nothing of tangible value to offset it, government's fiat purchasing power can be obtained only by subtracting it from somewhere else. It is, in fact, 'collected' from us all through a decline in our purchasing power. It is, therefore, exactly the same as a tax, but one that is hidden from view, silent in operation, and little understood by the taxpayer." (pg.162)

This is the dirty little secret that all politicians share with the private, Federal Reserve bankers. Inflation is manufactured; it is created through an expansion of the money supply.

Inflation is a "hidden tax!"

The Politicians spend in excess of the taxes they collect forcing the Treasury to sell bonds/notes to fund the budget deficit; and then the private bankers at the Fed "monetize" the portion of those Treasury offerings not bought by domestic or foreign investors at the quarterly auction that's now held monthly. This Fed monetization creates "new money" out of thin air causing monetary inflation! (Note: In addition to these direct Open Market Operations, the Fed can also affect inflation by adjusting the Fed Funds rate and the required reserves of member banks. Also important, but left out of this discussion, is the fact that the borrowing necessary to satisfy the current account deficit dilutes the global supply of USDollars directly affecting its real and perceived exchange rate value.)

Monetary inflation sneaks its way into the economy eventually manifesting itself as price inflation in everything; it is a cancer. Not only do we pay through higher prices, but we also pay again for the interest on the deficit induced debt. Ironically, that interest is collected by those very same private bankers that run the Federal Reserve through their member banks. That Treasury debt will never be retired because the origin of all our money is debt. To retire our national debt is deflationary; if all debt were retired, there would be no money. That's why the national debt will never be repaid! The private bankers will squeeze interest out of the taxpayers in perpetuity, or until a deflationary spiral forces a debt pyramid collapse and subsequent default.

From the average citizens' standpoint, taxes are but one side of the equation that visibly erodes disposable income. Inflation is the other side and virtually no one understands it because we've been conditioned to accept its inevitability. It transfers wealth from the citizens to the private Fed bankers who manufacture money at will. Inflation evaporates your disposable income; it's invisible.

You have no input, no vote, and no place to hide! Well, there's one place to hide: precious metals and mining shares.

The rate of increase in the global supply of USDollars is outpacing the growth in worldwide goods and services. Therefore, both internally and externally, this excess supply of USDollars is chasing the slower growing goods and services causing prices to rise. Again, monetary inflation causes price inflation and a corresponding decrease in the Forex value of the USDollar!

Watch out if our foreign creditors lose faith in the Dollar!

It's this covert theft-by-inflation, by a bunch of unelected, private banksters, which has left the USDollar worth only 4 cents relative to a 1913 Dollar. That was the year the Federal Reserve Act was voted in by Congress; it marked the beginning of the end. Previously, from 1776 until 1913, our money's value remained relatively stable with the expected inflationary spikes during Wars. Mild deflations were fairly common as the economy readjusted to a money supply constrained by the supply of specie (precious metals).

This broken system cannot last; it was designed to fail by the Rothschilds, Warburgs, Morgans, and Rockefellers. Did they always plan for Dr. Mundell's "One World Currency?" Once you break down the sovereign currencies how far behind are the sovereign borders?

I hope you realize by now that we're not getting the true global economic picture from any of our media outlets. Apparently, France and Germany desire reserve currency status for the Euro; as Europe's largest economies, they have the most to gain. Prior to the second Iraq war, they conspired with Saddam to begin selling Oil in Euros in an attempt to at least achieve co-equal exchange medium status with the USDollar. We simply could not allow that to happen as their gain in currency demand is our direct loss. If we allowed this to happen, it would very likely result in a corresponding plunge in USDollar demand leading to a precipitous collapse in its value. As the US shrugs its shoulders to recent European calls for currency intervention to stop the USDollar's slide, we are seeing the initial stages of direct economic conflict. France, Germany and Russia precipitated the need for our current War with Iraq, through the Euros-for-Oil-for-Food program; and then they collectively voted against the US in the UN attempting to block our efforts to restore economic order. Of course, Saddam did violate something like 17 UN resolutions and there were concerns about WMD, but in my opinion the war was fought in defense of the USDollar. The UN is now stonewalling our efforts to uncover the truth behind that Euro-Oil-Food scam, which has signs of involvement at the highest levels, while the Europeans, Russians, and OPEC met several weeks ago to discuss further economic cooperation. They're also pushing for appeasement treaties with Iran, much like the decade long appeasement of Iraq, while Iran secretly gathers their nuclear strength. Also, the Euro needs time to build a better foundation on firmer ground; it's not quite ready to replace the USDollar. This has the makings of a full blown World War, but if it has to be, then the US would be better off fighting it now rather than doing it on anyone else's timetable. Delay only allows the Euro time to firm up while Iran has further opportunity to develop and expand their nuclear capabilities. If faith is subsequently lost in the USDollar, or if global support is withdrawn as some OPEC countries switch to Euros-for-Oil, then the value of the USDollar will likely collapse driving our economy into a depression. I firmly believe a wider war is coming, but America's adversaries want us fighting from a position of weakness, not a position of strength. Time is on their side, not ours!

Don't think for one minute that the US is willingly or easily going to relinquish reserve currency status. The problem is that all fiat, paper currencies are a fraud and every major economic power wants the right to create free money out of "thin air." That's why France and Germany attempted to undermine the USDollar while elevating the European Union's recently created common currency. Along with broad currency demand comes the highly coveted prize: the power to inflate at will. Rather than propping up the USDollar we are allowing it to fall under market pressure while we inflate away our deficits and debt. In effect, the recent debt monetization by the Fed is transferring our deficit and debt burden to our trading partners, and the foreign nations that hold our treasuries, as they suffer currency exchange rate, and soon T-bond/note, losses.

The problem for them is they have no alternative because the only real money is Gold/Silver which doesn't exist or circulate in sufficient quantities to supply the World's need for liquidity. Absent any viable currency alternatives, the US has the upper hand in this dangerous game of economic Mutually Assured Destruction. If anyone dares to usurp, undermine, unseat or flee from the USDollar, then the global economy will follow the US economy down the drain. So, we've fired an economic shot across the bow of any would-be USDollar insurgents; we've also shown the willingness to project military power in its defense. The USDollar will be allowed to fall and our debt will be inflated away to a manageable size; domestically, we will feel the effects of this inflation, and quite possibly hyperinflation, at the gas pumps and in the grocery stores.

The problem is that the market rules; and this process can spin out of control as the market seeks its own equilibrium.

Unfortunately, our past habit of living-beyond-our-means has us backed into a corner; we also have few viable alternatives. The only thing that will hold up the money supply going forward is another "Guns and Butter" fiscal policy where we fight a wider war for a just cause.

I can hear the sabers rattling with Iran. It's only a matter of time.

Quelle (http://www.321gold.com/editorials/chuhran/chuhran112904.html)

syr :sss

27.11.2004, 17:25
Weil's eine schöne Zusammenstellung ist :)....

November 27, 2004

Foreign Interest Appears to Flag as Dollar Falls

The New York Times

WASHINGTON, Nov. 26 - Investors and market analysts are increasingly worried that the last big source of support for the American dollar - heavy buying by foreign central banks - is fading.

The anxiety was on full display Friday, when the dollar abruptly slid to a record low against the euro after a report suggesting that the Chinese central bank might start to reduce its holdings in the American currency.

Though Chinese officials later denied the report, and the dollar recovered, analysts say the broader trend is that foreign governments are becoming less willing to finance the growing debt of the United States government.

On Tuesday, a top official with the Russian central bank said his government had become worried about the sinking value of the dollar and might switch some foreign reserves to euros.

A day later, India's central bank hinted that it was worried about the same issue and might shift some reserves into other currencies.

Japan and China, which together have amassed nearly $900 billion in United States Treasury securities, have both slowed their buying sharply from the frenetic pace in February and March.

"There is an emerging consensus that banks around the world are moving to expand their reserves of euros at the expense of dollars," said Laidi Ashraf, chief currency analyst at MG Financial Group in New York.

The Bush administration has essentially condoned the dollar's decline. At meetings with foreign ministers last week, the Treasury secretary, John W. Snow, repeated the American mantra of support for a "strong dollar" but also for letting "market forces" determine exchange rates.

A continued decline of the dollar would be good for American manufacturers, because it would make exports cheaper in foreign markets and push up the cost of imports.

But a diminished foreign appetite for dollars could push up interest rates. The Federal Reserve has already raised short-term rates four times this year, but the shift in the sentiment of foreign investors may soon seriously affect long-term rates that influence the cost of home mortgages.

"Sell U.S., buy Europe," summed up Richard Berner, chief United States economist at Morgan Stanley, in a report last week. Mr. Berner noted that investors have begun demanding higher yields for 10-year Treasury securities than for comparable European bonds, and he predicted that the spread would widen.

Recent data from the Treasury Department indicated that foreign governments had sharply slowed their purchases of Treasury securities. The question is whether those purchases will continue to slow or start to increase again as countries try to shore up the American currency to help maintain their own industries' competitiveness.

Japanese purchases of Treasury securities, which ballooned by about $100 billion from October 2003 to March of this year, have slowed sharply and actually declined slightly in September.

Largely as a result, the dollar has sunk to its lowest level against the Japanese yen, about 102.5 yen to the dollar on Friday, in four and a half years.

Chinese purchases of Treasury securities slowed to a crawl, increasing just $2 billion in September, to $174 billion.

On Friday, a top Chinese central bank official denied reports in a Chinese newspaper that the government planned to reduce its holdings of Treasury bonds.

But Chinese officials, under prodding from the Bush administration, have repeatedly said they want to gradually relax their 10-year-old policy of locking its currency, the yuan, at a fixed exchange rate to the dollar. Any move to a more flexible exchange rate for China would probably cause the dollar to drop in value and allow the Chinese central bank to stop buying United States debt securities.

America's current account deficit, the broadest measure of its indebtedness to other countries, is on track to exceed $600 billion next year, about 6 percent of its gross domestic product. The United States needs to attract about $2 billion a day to keep its spending at current levels.

The nation attracted enormous sums of foreign money in the late 1990's as well, but the character of that money has changed. Back then, a big part of the inflow was through foreign direct investment and purchases of American stocks.

This year, by contrast, foreigners have been net sellers of stocks. The big growth has been in foreign purchases of Treasury securities, and the big buyers have been foreign central banks that wanted to prevent their own currencies from rising too much against the dollar.

Tony Norfield, currency strategist for ABN Amro in London, said he was convinced that central banks were trying to scale back their purchase of dollar assets, a move that could push the euro, already up about 30 percent in the last years, even higher.

"You do not need the central banks to sell Treasuries for the dollar to go down," Mr. Norfield said. "All they have to do is buy less and the dollar is going to be in trouble."

The euro hit a new high of $1.3329 on Friday in light trading, before settling back about a half-penny.

European leaders are alarmed about the potential damage of a sinking dollar to their exports.

"Recent moves on exchange markets of the dollar versus the euro are unwelcome," said Jean-Claude Trichet, president of the European Central Bank, at a banking seminar on Friday in Rio de Janeiro.

"I want to underline the importance of recent statements by the Treasury secretary of the United States on his determination to pursue a strong dollar policy," Mr. Trichet added.

But Mr. Snow and Alan Greenspan, the chairman of the Federal Reserve, offered no hint that they would intervene in currency markets to prop up the dollar.

"The market for U.S. Treasury securities is deep and liquid and continues to be attractive to a broad and diverse pool of investors," a spokesman for Mr. Snow, Robert Nichols, said.

That remains to be seen. According to the most recent Treasury data, the biggest source of growth in securities came not from China, Japan or Europe but from Caribbean banking centers.

nytimes.com (http://www.nytimes.com/2004/11/27/business/27dollar.html?oref=login)


27.11.2004, 17:54
Zur Rede von Greenspan :schaf:.....

Dollar's Dip Shows Greenspan in Denial

By Peter Eavis
Senior Columnist

Just about everyone is worrying about the tanking dollar and the enormous U.S. trade deficit. So it's high time for Alan Greenspan, the nation's central banker, to step in and tell us how we might deal with the wilting greenback.

Instead, the Fed chairman has made a speech that will go down as the one of most flagrant pieces of self-serving tripe in financial history.

The markets slumped after taking in the speech, because investors thought they detected real alarm and concern about America's deficits in Greenspan's comments. But a close reading of the text betrays something far more serious that will steadily eat away at investors' confidence in this country and its currency. The problem starts with easy credit and Greenspan's refusal to acknowledge its many side effects.

The speech, given last Friday at the European Banking Congress in Frankfurt, clearly shows that Greenspan is refusing to deal with the root cause of the dollar's slide because his policies are the main reason for its decline. Now it very much appears that Greenspan will pull up short of doing what's necessary to fix the current account deficit, because it would mean admitting that he's created the mess that led to the blowout trade deficit.

Free Money

Since Greenspan almost never admits he's wrong, the Fed -- under him or one of his acolytes (he's likely to retire in early 2006) -- almost certainly isn't going to change course. This makes it increasingly likely that America will be laid low by the mother of all currency crises before long. It's incredible to think that in a governmental system known for its checks and balances, the pride of one man could cause the fall of the world's largest economy. But that's what we're looking at here, going by the central banker's Friday speech.

Greenspan couldn't wait much longer to give this speech, with the dollar having fallen to all-time lows against the euro -- the European currency climbed to $1.31 Tuesday -- and with the current account deficit at a record 5.7% of GDP in the second quarter (the most recent number available).

Clearly, the Fed chairman had to give the appearance of concern in this speech, or else the market would have reacted twice as badly as it did. And Greenspan's worry was what captured the headlines.

Quoted just about everywhere were these words of his: "Current account imbalances, per se, need not be a problem, but cumulative deficits, which result in a marked decline of a country's net international investment position -- as is occurring in the United States -- raise more complex issues." At first glance, that comes across as opaque central-bank speak, but it's Greenspan's way of saying that it is clearly a problem if America has to keep on borrowing larger and larger sums from foreigners to pay for the consumption and investment the U.S. hasn't got the savings to finance.

But the rest of the speech was artful dissembling. To see why, we must recognize what has led us to the mess we're in. The current account deficit has grown to a grotesque size and become such a worry to the world because Americans are consuming beyond their means. They're doing that on easy credit. And the reason that credit has been so easy is that Greenspan has kept interest rates at artificially low rates.

Haste Makes Waste

Current account deficits are not so much to be feared when foreigners are pouring investment dollars into the U.S. After all, that helps make American companies more productive, which means in the future they'll have the means to pay back the foreign financing.

That just isn't happening now. American companies have a small surplus of savings. But for the first time in decades, it is households that are in deficit, points out Paul Kasriel, chief economist at Northern Trust. (By deficit he means personal income minus expenditures on consumption and residential investment.) In addition, the government also has a deficit that has been mainly created by sharply higher defense, education and health care spending under Bush.

As a result, America is borrowing from abroad to finance spending by individuals and the government. Spending by these two adds almost nothing to the productivity of the economy, and that means America is less likely to generate the extra returns needed to repay foreign financing. The large inflows of foreign capital should not be seen as a vote of confidence in the U.S. economy by foreign entrepreneurs. Nor should they be seen as evidence that foreigners are happy to finance the deficit.

That's because foreign central banks have been doing a large portion of the buying, and they are only parking the dollars that have flooded into their reserves as America sucks in goods and services from abroad.

In the 12 months ending Sept. 30, foreign nonprivate net purchases of U.S. Treasuries totaled $214 billion, compared with $78 billion in the same period ending Sept. 30, 2003. By contrast, private foreign purchases of Treasuries inched up to $167 billion from $162 billion over the same period.

In his speech, Greenspan says this: "Even considering heavy purchases by central banks of U.S. Treasury and agency issues, we see only limited indications that the large U.S. current account is meeting financing resistance." But notice that Greenspan gives no numbers to make his case there. And it is absolutely the case that, without those central-bank purchases, the dollar would be a lot lower today.

Christmas in July

Greenspan did sort of acknowledge the two main causes of this problem: the fiscal and household deficits. He's been a fiscal conservative for a long time, so he's being consistent in his speech when he calls for a budget surplus. But when it comes to the unprecedented and deeply harmful household deficit, Greenspan merely tosses in this line: "Significantly increasing private saving in the United States ... of course would also be helpful." Absolutely no mention of the Fed's role in giving people an incentive to borrow like never before and run down the savings rate to current low levels.

Greenspan then says that he has faith in the markets to restore a sustainable U.S. balance of payments without crisis, citing a Fed paper that supposedly shows this happening in many Western countries since 1980. Problem is, many of the Western countries included in that paper did go through wrenching economic slowdowns in order to cut their trade deficits. What's more, very few of them had the sort of debt levels America now has, and likely none of them had interest rates as low as they are now in the U.S.

In other words, rates in the U.S. are going to have to go up in any adjustment -- and the impact on the debt mountain could be horrible. Indeed, during the last big current account adjustment in the U.S. rates rose sharply, prompting the 1987 stock market crash.

Greenspan also argues that because the U.S. economy hasn't skidded badly since 2001 in face of many shocks, it is strong enough to withstand a current account adjustment. But the main reason the American economy muddled through is that Greenspan slashed rates and shored things up with cheap credit. But it is that cheap credit that has caused the current account deficit to balloon. Take it away, and the current account deficit will decline -- but the economy will also stop in its tracks and debt defaults will be rampant.

In his speech, Greenspan asserts that "inducing recession to suppress consumption" is not a long-term solution. But it looks like the only one left -- because of him.

thestreet.com (http://www.thestreet.com/_googlen/comment/detox/10195931.html)

syr :rolleyes:

29.11.2004, 19:34
Pilloried on the street, mighty greenback now China's 'money to burn'

More Chinese investors are dumping their U.S. dollars as the currency's reputation for stability erodes

Wednesday, November 24, 2004 - Page B3

BEIJING -- In Chinese street slang, they are known as the "yellow bulls" -- the underground traders who lurk outside the banks in aggressive pursuit of currency deals. But despite their business zeal, there is one commodity they are unwilling to buy on the street these days: U.S. dollars.

"Everyone is converting their dollars to Chinese yuan," one black-market trader confided as he stood outside a bank in Beijing yesterday.

"Our business is getting more and more difficult," he said. "It's hard to find anyone buying U.S. dollars any more. The value of the yuan is definitely going to increase."

These are anxious days for China's legions of canny traders and savers. Not long ago, they had faith in the American dollar as the safest of safe havens -- a guaranteed stable investment. For years, China had survived financial crises by pegging its currency to the U.S. dollar.

But the prolonged slump in the dollar, along with hints of an approaching revaluation of the yuan, has created a new phenomenon here: the shunning of the greenback.

"Nobody with a U.S.-dollar account can sit quietly at home any longer," said one man in a queue at a Bank of China branch yesterday. "The black market is a sign of the market trends. The government might say that it won't change the official exchange rate today, but tomorrow it could announce a change."

For the past decade, China has held the yuan to a fixed value of about 8.3 to the U.S. dollar. In the past, the black-market traders were often willing to pay up to nine yuan for a dollar. But today the unofficial rate on the street is only 8.22 yuan to the dollar -- if you can find anyone willing to buy dollars.

Many Chinese investors are nervously wondering whether they should get rid of their dollars. "I'm worrying about it," said Li Dan, a 28-year-old information technology manager in Beijing.

"I've got $60,000 [U.S.] accumulated from shares in my company. What should I do? Who can tell if the exchange rate will decline? If I don't convert my money to yuan, I could lose thousands of dollars. That's a lot of money."

Many have already dumped their dollars. By the end of October, the switch from dollars to yuan had contributed to a 3.8-per-cent drop in foreign-currency savings by Chinese households, compared with a year earlier. This amounted to a decline of $1.7-billion in household foreign-exchange savings this year alone. At the Shanghai branch of the Bank of China, meanwhile, the conversion of dollar accounts to yuan accounts increased by 17 per cent in September and 34 per cent last month.

The dollar has lost the aura of stability that it once enjoyed here. And with the Chinese economy booming, a growing number of Chinese investors are regarding the yuan as the new hard currency. On the pages of a Hong Kong newspaper this month, the trend was illustrated by a picture of a man setting fire to an American dollar bill on Tiananmen Square, with the caption: "Money to burn."

Many Chinese are betting that the dollar will continue to decline and the yuan will be revalued. In the non-deliverable forward market in Hong Kong, the current level of forward contracts suggests that the yuan would rise to a level of 7.887 to the dollar within 12 months if it were freely traded.

The Chinese media and bank officials have sent out a growing number of signals that the yuan could be revalued in the next few months. The central bank has talked of possible "flexibility" in the value of the yuan. Some reports predict a widening of the trading band in the first quarter of next year.

"The decline of the U.S. dollar . . . may be the final factor convincing Beijing to revalue the currency," concluded a report this month by the Eurasia Group, a New York-based firm of political analysts.

"A modest currency revaluation increasingly appears to be Beijing's next step in cooling its economy."

The deputy governor of China's central bank, Li Ruogu, confirmed this week that China is gradually moving toward greater flexibility in its dollar exchange rate, although he emphasized that it would not happen as long as Western leaders continue to apply heavy pressure on China to revalue its currency.

"Everybody is saying that the value of the yuan will increase," a Beijing bank customer said yesterday.

"Even though the central bank says it will happen, I think it is just a matter of sooner or later."

Quelle (http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20041124/IBCHINA24/TPBusiness/?query=greenback)

syr :rolleyes:

30.11.2004, 10:25
Investment Outlook

Bill Gross | December 2004

http://www.pimco.com/PIMCO_US.Site/Images/spacer.gifToo Much!

John Snow and Alan Greenspan have finally bowed to the inevitable. Instead of blocking the lane in defense of a Shaq Attack slam dunk, they have politely if somewhat obfuscatingly stepped aside. “Put it down brother” they seem to be saying, but it’s the dollar and not a round ball that they’re referring to. The dollar has gone down. The dollar is going down. The dollar will continue to go down because it’s the easiest way out (for the U.S.) to begin to rectify its imbalanced finance-based economy. Balance the budget? Fugitaboutit. Raise interest rates to historic norms? Fugitaboutthattoo. “Let the market decide,” Snow says. “Likewise,” chimes Greenspan, warning that sooner or later foreign lenders will not be so exuberant in their purchase of U.S. Treasury bonds. Perhaps they’ll be a little less “irrational” with their money he might have thought, but that’s a word he doesn’t use anymore. And so the market’s most crowded trade – short the dollar – will inevitably become a little more crowded, perhaps “irrational” itself at some point. There is a whiff of crisis in the air.

How the world came to this point is well documented in some journals, including this one, but it bears repeating if only to reacquaint pre-Alzheimer candidates and those with “senior moments” such as myself with the facts. The U.S. spends too much; eats too much; drinks too much; TOO MUCH, (thank you Dave Matthews). And we pay for it with our debt and 80% of the world’s excess savings. In so doing our creepy crawly balance of payments deficit has inched its way up to 6% of GDP – a level never seen in the U.S. and reflective of third world nations in financial crisis. The imbalance has been tolerated by those nations on the surplus side of the ledger – read “Asia” – in a strange sort of mercantilistic Faustian bargain that promises China and Japan the benefits of a strengthening economy now for the perfidy of falling dollar denominated Treasuries bonds later, an arrangement that once again will prove that there is no free lunch, or that hell often follows heaven on Earth.


Chart I

There are those that argue that this tidy little bargain between debtor and creditor nations can go on for a long, long time. Since each party gets what they want – the U.S. to consume, and Asia to produce – who’s to say when the first player will opt out? For now, China’s rather introverted geopolitik allows them the flexibility to revalue their Yuan whenever they damn well please as long as their inflation rate behaves. Japan is beholden to the U.S. militarily and continues to struggle with deflationary pressures. That argues for at least jawboning its Yen lower. “Dirty float” is and likely will remain synonymous with Japanese forex policy. So there seems no immediate incentive for either China or Japan to opt out of their Faustian bargain. On the debtor side, the U.S. will shop ‘til it drops – pure and simple but that phrase up until now has always accentuated the “shop” and conveniently forgotten about the “drop.” The drop comes when this comfy cozy current relationship between giver/taker, consumer/maker for some reason ends in divorce. The only question is one of timing. At some point, as Greenspan so astutely pointed out, “foreign lenders will eventually resist lending more money to the United States, causing the dollar to drop further.” What he didn’t say is that will be the point when the shopping stops and the fun goes out of a trip to the mall. That’s the point when U.S. inflation heads gradually but inevitably higher, and that’s the point, of course when interest rates move into harm’s way.

If it seems strange that Treasury Secretary Snow and Fed Chairman Greenspan are actually encouraging this weak dollar policy, one can rationalize that they’ve seen the end game and they want to ease their way around the pileup. Better to talk the dollar down now before the balance of payments gets so bad that a true crisis is inevitable. I cannot disagree. And as mentioned in my opening paragraph, alternative solutions to the problem are “pie in the sky” unimaginable. For Americans voluntarily to begin to get the old time religion of saving more money is beyond dreaming, especially with employment so weak and the source of historic capital gains – stocks and houses – still above cost. Likewise a Bush Administration seems unlikely to move towards a more balanced budget with its aggressive legislative agenda which includes social security reform. Optimists tout the escape route of faster foreign growth to suck up American exports but Europe has caught a congenital case of influenza, Japan is back to the zero growth line and China is maneuvering for a soft landing.

My point is this: dollar depreciation now, and Chinese Yuan revaluation as soon as possible is the easiest first step to rebalance an imbalanced U.S./global economy. This realization is and has been as close to a slam-dunk as we have seen in the world of finance; slam-dunkier than calling the stock market top at NASDAQ 5000 or Soros breaking the Pound Sterling. You can count on it (the Dollar going down against Asia)– not that there won’t be frantic short squeeze reverses even as this Outlook is being written, or that against some currencies (the Euro) the U.S. dollar actually may be cheap.

But how best to profit from it? Like I’m fond of telling my fellow PIMCO portfolio managers as they pontificate about the future of the economy, “You can’t invest in GDP futures, what are the investment implications?” Granted, some of you readers can or have already joined the trash party and are short the dollar. We can as well and have done so in minor amounts. But currencies are not the game for which we were hired. They go up and down quicker than 30-year 0’s and can ruin or make your day/year/career. And aside from the obvious benefits that a declining dollar imparts to gold and commodity prices, the focus of this Outlook should be on bonds. What bonds should be bought or sold? I have several specific thoughts:

1) As long as the Euro strengthens against the dollar, there is reason to favor German Bunds instead of U.S. Treasuries. We have recently reduced some of our positions but remain confident that the inflationary impact of a weaker dollar and the disinflationary benefit of a stronger Euro favor Bund/Euroland positions. A 10% decline in the trade weighted dollar according to our calculations increases U.S. inflation by approximately ½% over the ensuing 24 months. While a strengthening Euro/dollar relationship has a positive disinflationary impact in Euroland, it will unquestionably not be the inverse of the U.S. due to the smaller dollar impact on their trade weighted currency. But as Chart II shows, the inflation differential in the short run may be as high as ¾% in favor of Euroland with the Euro at its current 1.30 level. Because the Euro has appreciated inordinately as Asia has controlled their own currencies, I would be leery of Bunds when and if China revalues. That point, however, may be months ahead.


Chart II

2) Buy TIPS. I’ve said this before when discussing U.S. reflationary tendencies. Since a declining dollar is perhaps the most quantifiable of all reflationary weapons – ½% higher inflation per every 10% trade weighted dollar decline – the benefit should accrue to short maturity TIPS on an almost one for one basis and to 5-10 year intermediate TIPS in smaller proportions.

3) Be careful with U.S. Treasuries. I offer a word of caution here if only because of a strange rather unquantifiable twist in the balance of payments saga. While Greenspan has correctly suggested that foreign private institutions and central banks will not lend at the current pace forever because of a burdensome trade deficit, there is the probability that until the first sizeable creditor turns tail that an accelerating deficit actually lowers interest rates. Think about it: For every dollar we spend on imports, that buck comes straight back to us (for now) in the form of a Treasury buy ticket. So the more we spend on imports in the short run, the more we save. Sounds like my wife at a sale, but it makes sense as long as foreign creditors buy longer dated Treasuries. Purchases of intermediate and long maturity Treasuries reflect a confidence in the fiscal/monetary stability of the U.S. economy. When that confidence disappears, foreign purchases take the form of overnight deposits as the buck is tossed from one holder to another like a hot potato. That’s when the dollar tanks, the balance of payments deficit eases back towards 2 or 3% and perversely, intermediate and long-term interest rates are more susceptible to going up. To sum up this CATCH 22, a deteriorating balance of payments deficit may actually have a positive effect leading to lower interest rates until a large creditor turns tail. It’s another way of saying that U.S. yields depend upon the kindness of strangers and that the time to not own them is when the strangers become less kind. I suspect that is just around the corner but Beijing and Tokyo have the ball in their courts.

Wherever that should occur, there’s no doubt that the dollar is on the run and that higher U.S. interest rates are the inevitable consequence. Dollar depreciation leads to higher inflation and ultimately forces foreign creditors to question their rationale and indeed their sanity for continuing purchases of U.S. Treasuries. Investors don’t need necessarily “TOO MUCH” intelligence to do this trade. Rather, they may need lots of patience in order to turn it into a profitable, near slam dunk opportunity.

William H. Gross

Managing Director

Quelle (http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2004/IO+December+2004.htm)


30.11.2004, 10:41
die machen dieses Spiel nicht mehr lange mit, so sehr wie die derzeit fast täglich mit neuen Meldungen kommen, China...

Chinas Premierminister kritisiert USA indirekt wegen Talfahrt des Dollar

HONGKONG (dpa-AFX) - Der chinesische Premierminister Wen Jiabao hat die US-Regierung im Zusammenhang mit der Talfahrt des US-Dollar indirekt kritisiert. Der Dollar verliere an Wert und es gebe keinen Versuch dies zu verhindern, sagte Jiabao der in Hong Kong erscheinenden Tageszeitung " China Morning Post" (Montagausgabe). Der chinesische Premierminister stellte der Zeitung zufolge damit die Währungspolitik der US-Regierung in Frage.

China sei hingegen " ein verantwortungsvolles Land" , sagte Jiabao weiter. Die Volksrepublik habe sichergestellt, dass der Yuan seit der Asienkrise 1997 stabil geblieben sei. Damit habe China seinen Teil zur Überwindung der Krise beigetragen./FX/jkr/zb


06.12.2004, 10:23
bei Cherry gefunden :):

6. Dezember 2004, 02:08, Neue Zürcher Zeitung

Versiegende Dollar-Käufe der Zentralbanken

Steigender Appetit auf europäische Anleihen

NZZ, London, 5. Dezember

Durch den Sinkflug des Dollars ist die Bereinigung der globalen Ungleichgewichte im Aussenhandel in Schwung gekommen. Die Weichen sind gestellt für höhere Renditen in den USA und einen Zustrom von Kapital in europäische Anleihen.

Mit der Abwertung des Dollars hat der Abbau der globalen Ungleichgewichte zwischen den USA und dem Rest der Welt begonnen. Der tiefere Wechselkurs verbilligt die Exporte der USA und verteuert ihre Importe. Die Konsequenz daraus ist ein sinkendes Handelsbilanzdefizit. Dies ist sowohl notwendig wie auch erwünscht. Allerdings ist das Einpendeln auf ein neues Gleichgewicht mit Schmerzen verbunden. Gelitten haben bisher vor allem die Länder im Euro- Raum, deren Exportfähigkeit sich durch den hohen Euro-Kurs verschlechtert. Inzwischen haben die Verschiebungen am Devisenmarkt eine ganze Reihe von Entwicklungsländern erfasst; die Lastenverteilung ist damit breiter abgestützt.

Gegenseitige Schuldzuweisungen

Die USA sehen die Ungleichgewichte vor allem als Nebenprodukt des schleppenden Wachstums in anderen Weltregionen. Asien und Europa werfen den USA im Gegenzug vor, zu viel zu konsumieren und zu wenig zu sparen. Niemand will die Verantwortung übernehmen. Die Sparlücke der USA sei das ernsteste Ungleichgewicht der heutigen Wirtschaft, unterstreicht die Investmentbank Morgan Stanley. Die scheinbar unbeschränkte Finanzierung dieser Sparlücke durch ausländische Investoren hat es bisher möglich gemacht, die Lösung des Problems auf die lange Bank zu schieben. Allerdings hat ein Stimmungsumschwung stattgefunden. Die asiatischen Zentralbanken sind inzwischen, so wird vermutet, an einem einschneidenden Wendepunkt angekommen. Sie sind nicht mehr wie früher bereit, über eine weitere Aufstockung ihrer Devisenreserven den Kapitalhunger der USA unbegrenzt zu stillen. Die Aussicht auf einen fallenden Dollar macht die Käufe von US-Staatsanleihen unattraktiv, da hohe Verluste zu erwarten sind.

Mit seiner Bemerkung, dass Investitionen in US-Staatsanleihen auf dem heutigen Preisniveau quasi dem Wunsch gleichkämen, Geld zu verlieren, hat US-Notenbankchef Alan Greenspan die Dollar-Investoren bereits aufgeschreckt und Verkäufe ausgelöst. Diese Entwicklungen geschehen vor dem Hintergrund gewaltig angeschwollener Devisenreserven der Zentralbanken. Japan hat mit 720 Mrd. $ die tiefsten Taschen, gefolgt von China mit Reserven von 515 Mrd. $; hinzu kommen Hongkong und Taiwan mit weiteren 355 Mrd. $. Global sind die Devisenreserven in den letzten anderthalb Jahren um 1000 Mrd. $ gestiegen; für die Akkumulierung der vorherigen 1000 Mrd. $ hatte es im Unterschied dazu volle zehn Jahre gebraucht. Schichten die internationalen Käufer ihre Portfolios um, wird zwangsläufig mehr in Euro-Anlagen investiert. Das Verhalten der asiatischen Zentralbanken ist damit derzeit für den Euro-Dollar-Kurs wichtiger als Zinsschritte oder Devisenmarktinterventionen der Europäischen Zentralbank, meint das britische Research- Haus Capital Economics. Die internationalen Kapitalflüsse signalisieren gemäss Morgan Stanley, dass eine solche Diversifizierung in Richtung Euro bereits begonnen hat. Die Erstarkung des Euro zieht zusätzliche Bond-Investoren an. Der Euro-Raum verzeichnete im September Kapitalzuflüsse von 39,6 Mrd. $ verglichen mit 6,3 Mrd. $ im August.

Mehrere Stützen für US-Bonds

Am US-Obligationenmarkt ist mittlerweile die paradoxe Situation eingetreten, dass die Renditen der Staatsanleihen trotz der Anhebung der Leitzinsen durch die Notenbank gesunken sind. Dies ist umso bemerkenswerter, als die Überkapazitäten der US-Firmen weiter sukzessive abgebaut werden. In dieser Situation sollten die Realzinsen gemäss Morgan Stanley sinnvollerweise bei 3% bis 3,25% liegen. Bei einer Inflation von 2% bis 2,5% kommt man dann auf Marktzinsen von 5%. Tatsächlich liegt die Rendite der zehnjährigen Anleihen aber mit 4,25% volle 0,75 Prozentpunkte tiefer. Die zweijährigen Anleihen haben eine Rendite von 2,92%. Das niedrige Renditeniveau macht die US-Staatsanleihen nach Ansicht der Citigroup anfällig, falls eine Konjunkturerholung über dem langfristigen Wachstumstrend liegen sollte. Allerdings glauben wenige Beobachter an ein wirkliches Hochschiessen der Rendite. Nach Ansicht der Citigroup werden die Renditen der US-Staatsanleihen in diesem Zyklus 5% bis 5,5% nicht übersteigen. Die US-Inflation wird zwar infolge der Dollar-Schwäche vermutlich steigen, ohne jedoch stark aus dem Ruder zu laufen. Ferner werden Obligationen vermehrt als Absicherung gegen Erdölschocks und schwache Aktienmärkte gekauft, was den Papieren eine Stütze verleiht. In Europa hat die Europäische Zentralbank ihrerseits bei ihrem letzten Treffen in der vergangenen Woche über eine Zinssenkung gar nicht diskutiert und stattdessen suggeriert, dass der nächste Schritt eine Zinserhöhung sein werde. Allerdings gab es keinen Hinweis darauf, dass diese Zinserhöhung schon bald anstehen könnte. Viele Marktbeobachter erwarten erst für Mitte 2005 moderate Zinserhöhungen. Die europäischen Anleihen könnten sich in diesem Umfeld von den US-Obligationenmärkten abkoppeln und deutlich besser abschneiden.

NZZ (http://www.nzz.ch/2004/12/06/bm/page-articleA1H7F.html)

syr :rolleyes:

06.12.2004, 20:41
nach China die EU.......

Mon, Dec 06, 2004

Eurozone ministers accuse US as dollar sinks to new lows


BRUSSELS (AFP) - European Union (news - web sites) finance ministers pressed for action by the United States to prop up the dollar as eurozone nations expressed their deep disquiet at the parlous state of America's national finances.

With concern mounting about the impact on Europe's ailing economy, French Finance Minister Herve Gaymard called for intervention on the currency markets not just from Europe but also from "the American and Asian authorities".

"This (dollar) slide must not continue, and there needs to be a better management of these rates at the international level," he told French television channel LCI before heading to Brussels for a euro group meeting.

Several European ministers called on the United States to rectify its yawning trade and budget deficits, which are most to blame for the dollar's slide.

Dutch Finance Minister Gerrit Zalm, who was chairing the two-day EU talks that opened Monday, told the French business daily Les Echos that a "unilateral intervention by the ECB (European Central Bank) will hardly be effective".

On the other hand, Zalm said, it would be "very useful" for Washington to declare its intention to curb its deficits, a message also delivered forcefully by Austrian Finance Minister Karl-Heinz Grasser.

"It's unacceptable that Europe should pay the bill for major imbalances in the world economy, especially in the current account deficit and the budget deficit in the US," he told reporters.

Belgian minister Didier Reynders chimed in: "We must deliver a quite strong message to our American partners that if there are imbalances, they are more on the American side.

"The ECB and euro group must continually repeat the same message," he said.

At their last meeting three weeks ago, when the euro was flirting with the 1.30-dollar mark, ministers from the 12 euro nations limited themselves to saying that excess volatility in exchange rates was "undesirable".

But with both European and Japanese exporters feeling the pinch from the dollar's slide, there is renewed talk of intervention on the currency markets.

The EU ministers cannot count on an interest rate cut by the ECB, whose chief Jean-Claude Trichet ruled out that option last Thursday but who could face questioning on the issue at the talks here.

The ECB's last foray onto foreign exchange markets was in late 2000, when the Group of Seven industrialised nations joined forces to buy euros and sell dollars after the European currency plunged to a record low of 0.8230 dollars.

Japanese Finance Minister Sadakazu Tanigaki on Friday again warned that the yen was still too high and suggested that Tokyo may intervene in an effort to protect its exports.

US Treasury Secretary John Snow, however, has poured cold water on hopes for US action to support the flagging dollar.

On the same day as the eurozone ministers' declaration three week ago, he said that "currency values are best set in open and competitive exchange markets".

In Monday's European trading, the euro hovered just shy of its all-time high above 1.34 dollars in the wake of a disappointing American jobs report.

Against the Japanese currency, the dollar meanwhile rose a touch on the speculation about possible intervention, trading at 102.34 yen compared with 102.04 on Friday.

With the eurozone struggling to pick itself up from a three-year slowdown, fears are intensifying that the euro's rally against the dollar will dent languishing rates of growth.

Spanish Finance Minister Pedro Solbes said the strong euro "negatively affects exports, and for that reason it could negatively affect growth".

Quelle (http://story.news.yahoo.com/news?tmpl=story&cid=1503&ncid=732&e=2&u=/afp/20041206/ts_afp/eu_economy_eurozone)


08.12.2004, 11:36
Opec sharply reduces dollar exposure

By Steve Johnson and Javier Blas in London
Published: December 6 2004 21:12

Oil exporters have sharply reduced their exposure to the US dollar over the past three years, according to data from the Bank for International Settlements.

Members of the Organisation of Petroleum Exporting Countries have cut the proportion of deposits held in dollars from 75 per cent in the third quarter of 2001 to 61.5 per cent.

Middle Eastern central banks have reportedly switched reserves from dollars to euros and sterling to avoid incurring losses as the dollar has fallen and prepare for a shift away from pricing oil exports in dollars alone.

Private Middle East investors are believed to be worried about the prospect of US-held assets being frozen as part of the war on terror, leading to accelerated dollar-selling after the re-election of President George W. Bush.

The BIS data, in the organisation's quarterly review, state that Opec countries' stock of dollar-denominated deposits has fallen by 4 per cent in cash terms since 2002 in spite of Opec revenues' surging to record levels this year.

Opec officials say the cartel is trying to protect its purchasing power per barrel, as Europe is its largest trading partner. Opec imports from Europe rose 29 per cent between 2001 and 2003 while those from the US fell by 14 per cent, according to Morgan Stanley, the US investment bank.

Simon Derrick, head of currency research at Bank of New York, said: "It makes sense to diversify their reserves as much of their spending is in the eurozone and Japan."

Opec officials also point to political motivations after the 2001 terror attacks on the US.

Middle Eastern foreign exchange reserves are relatively small - those of Saudi Arabia, UAE, Kuwait and Qatar are estimated at $61bn by BNP Paribas - but any switch may be seen as indicating the mood of private investors in the region, who control far greater wealth.

Hans Redeker, global head of foreign exchange strategy at the French bank, said the Patriot Act, introduced after September 11 to stop US financial institutions being used by terrorists to launder money, was worrying private investors.

"If you trade with what the US regards as a 'dodgy' bank, you are at risk of your assets in the US being frozen," he said. "After the re-election of George Bush, the Middle East started to sell dollars like crazy due to the fears of assets being frozen."

The BIS report also showed that, in spite of oil prices having risen 85 per cent since the fourth quarter of 2001, overall OPEC bank deposits have barely risen. "Oil reserves have not been channelled into the international banking system in the most recent cycle," the report said.

One school of thought is that Middle Eastern businesses and individuals increasingly prefer to invest at home, leading to sharp rises in real estate and equity prices in many countries. Another argument is that many Opec governments are having to increase public spending to support rapidly growing populations.

Quelle (http://news.ft.com/cms/s/67f88f7c-47cb-11d9-a0fd-00000e2511c8.html)

syr :sss

18.12.2004, 14:17
Saville, mal wieder :supi;)....

Thoughts on the US dollar, asset markets & current account

Steve Saville
17 December, 2004

Flow of Funds

There were some interesting statistics in the latest quarterly "Flow of Funds" report issued by the Fed last week. The most interesting, as far as we were concerned, were the data on household net worth and foreign central bank holdings of US financial assets.

According to the above-mentioned report, foreign central bank holdings of US financial assets increased by $315B -- a 40% annualised rate -- during the first 9 months of this year. To put this amount into perspective, it is equivalent to about three-quarters of the total US trade deficit over the period in question.

So, does this mean that the US$ would have been much weaker if not for the yeoman-like efforts of these central banks?

Perhaps not, because although the foreign CBs have soaked up a lot of the dollars associated with the US trade deficit the fact that they have channeled these dollars back into US financial assets -- mostly Treasury and Agency debt -- means that they haven't actually taken any dollars out of circulation. Rather, what they have done is re-cycle a huge pile of dollars and, in the process, dramatically reduce the supply of US bonds. Therefore, they probably haven't done a lot to support the dollar even though this was their goal, but their actions have almost certainly resulted in lower long-term US interest rates and higher US asset prices than would otherwise have been the case. They have, in other words, unwittingly helped to promote US inflation and widen the US current account deficit.

The Flow of Funds report also notes that household net worth rose by $546B during the third quarter of this year; so although some analysts have repeatedly warned that the US consumer was 'tapped out' the reality is that US consumers, as a group, were much LESS closer to being 'tapped out' at the end of the third quarter than they were three months earlier.

In our opinion, those who forecast that a retrenching by US consumers will create problems for the US economy and the US asset markets are putting the cart in front of the horse. To be specific, it is very unlikely that US consumers will cut back on their spending and ramp-up their rate of saving as long as household net worth is increasing at a robust rate. Instead, it is more reasonable to expect that a downturn in asset prices and a consequential reduction in household net worth will LEAD downturns in consumer borrowing and spending.

Now, last week we mentioned that the key to a substantial contraction in the US current account deficit was less spending and more saving. But according to the above, there are not going to be meaningful changes in spending and saving patterns until after there is a downturn in asset prices. Putting these two thoughts together we get: Regardless of what happens to the US$ there probably isn't going to be any significant contraction in the US current account deficit until some time after US asset prices begin to trend lower.

The US Stock Market versus the US$

Imagine the following scenario:

Joe borrows a lot of money from his local bank and spends the money on general living expenses. After a short while the money is all gone, but the debt remains and Joe is having trouble meeting his monthly obligations so he returns to the bank and asks for some more money. Despite the fact that Joe is already beyond his credit limit taking into account his income and monthly expenses, the bank not only offers to lend him a lot more money but also offers to do so at a lower interest rate. After another short while, though, Joe again finds himself in the position of desperately needing more money to fund his lifestyle. So again he returns to the bank and, like before, leaves with a lot more money at an even lower interest rate. This process is repeated again and again with Joe being offered progressively lower interest rates on his ever-expanding debt despite his weakening financial position.

The above scenario might seem unrealistic, but if we substitute "the US" for "Joe" and "foreign central banks" for "Joe's local bank" then it depicts what has actually been happening in the world over the past two years.

Keeping the above in mind, take a look at the following chart comparison of the S&P500 Index and the Dollar Index. The chart highlights the strong INVERSE relationship between the US stock market and the US$ since March of 2003. Notice, in particular, that the S&P500's upside breakout from a lengthy consolidation in early November of this year occurred shortly after the Dollar Index broke downward from a lengthy consolidation of its own.


The inverse relationship illustrated above is not normal (over the long-term there is a slight positive correlation between the S&P500 Index and the Dollar Index) and is far too tight to be a coincidence. The reason it has occurred, we think, is that each bout of dollar weakness has prompted foreign central banks to buy dollars which are then immediately injected into the US bond market. Dollar weakness therefore leads to higher US bond prices (lower long-term interest rates) and increased liquidity in US financial markets. And the worse things get for the US and the dollar the more dollars the foreign central banks feel they have to buy and the more money gets channeled into US bonds, resulting in lower interest rates and higher US asset prices. Furthermore, this process increases liquidity throughout the world, not just within the US, because in order to 'soak up' excess US dollars the foreign central banks often print more of their own currency.

This apparently virtuous circle can continue for as long as there exists a combination of a weakening dollar and subdued inflation expectations. In other words, it will end when the dollar begins to trend higher or when a weakening dollar (and the associated liquidity generation) causes inflation expectations to surge.

Quelle (http://www.321gold.com/editorials/saville/saville121704.html)


DAO Vinci
08.02.2007, 04:04
Comeback Or Falling Back !? !? !?
Schlusskurs am 06.02.2007 : 82.51 Indexpunkte

Der historische Tiefstkurs des "USD Trade Weighted Index" war am 19.04.1995 mit 79.22 Indexpunkten.
Seither erholte sich der "USD Trade Weighted Index" auf bis 112.89 Punkten - am 28.01.2002 - bevor er wieder auf bis zu knapp 80 Indexpunkten zurückfiel.

Interessant erscheint mir, in diesem Zusammenhang, die Tatsache, dass der "USD Trade Weighted Index" doppelt so schnell fiel als das er, vom historischen Tiefstpunkt, anstieg !!! Das zu interpretiere fällt mir jedoch schwer ...

Viel wichtiger erscheinen mir heute, hier & jetzt folgende Frage ...
Hält die 80 Indexpunkte Marke des "USD Trade Weighted Index" ?

Am 05.12.2006 Schloss Der "USD Trade Weighted Index" Bei 79.99 Punkten ...
War Das Rückblickend Die Trendwende Im "USD Trade Weighted Index" ?
War Das Rückblickend Möglicherweise Auch Im EUR/USD Die Trendwende ?

Oder aber war das nur die Ruhe vor dem möglicherweise aufkommenden Sturm ...
Und Bricht Der "USD Trade Weighted Index" Total - Also Unter 80 - Ein ?

Und wenn der "USD Trade Weighted Index" Wirklich Einbrechen Sollte ...
Wie Tief Wird Der "USD Trade Weighted Index" Dann Fallen ?
Wo Findet Der "USD Trade Weighted Index" Wieder Boden Unter Den Füßen ?
Oder Ist Der USD - Eben In Form Des "USD Trade Weighted Index" Ein Faß Ohne Boden ?

Fragen Über Fragen - Die Sich Lohnen Dürften Nicht Nur Heute, Hier & Jetzt Aktiv Zu Diskutieren ...
Mir fällt es allerdings offen gestanden mehr als schwer Sie heute, hier & jetzt zu beantworten - verweise allerdings mit besten Wünschen auf meinen kostenpflichtigen DS FOREX Infobrief (den progressiven Devisenbrief für den pro-aktiven Devisenmarktteilnehmer).


Aufschlussreicher ist da möglicherweise ein Blick auf die historische Kursentwicklung des "USD Trade Weighted Index" - möglicherweise auch ein Blick auf den 200er & 100er "Simple Moving Average" !? !? !?


Grundsätzliche Informationen Zum "USD Trade Weighted Index" ...
A weighted average of the foreign exchange value of the U.S. dollar against a subset of the broad index currencies that circulate widely outside the country of issue. Major currencies index includes the Euro Area, Canada, Japan, United Kingdom, Switzerland, Australia, and Sweden. For more information about trade-weighted indexes see at the Homepage of the Federal Reserve at http://www.federalreserve.gov/pubs/bulletin/2005/winter05_index.pdf (http://www.federalreserve.gov/pubs/bulletin/2005/winter05_index.pdf).

Und Immer Schon Aufmerksam Bleiben - An Der FOREX - Und Außerhalb Noch Mehr ...


"Wenn Du Denkst Dann Das Du Denkst Dann Denkst Du Nur Das Du Denkst. Oder Um Es Mit Den Worten Imanuel Kants Zu Formulieren : Denken Heißt Mit Sich Selbst zu Sprechen ..."