Destruction of the US dollar

[devil21]

(This thread should have been titled "Destruction of the FRN global standard" but I was in the early stages of learning this stuff. Dollar and FRN are not necessarily the same.)


UPDATE: Some of the links are dead but the texts of the deleted articles are still in this thread.


We have ongoing threads that chronicle the progression of the downward spiral of things like the Friday bank closures, Corporate bankruptcies but we don't have one for the destruction of the dollar currently underway. We have a lot of articles spread around in different threads but no central repository of these stories.

Well now we do. Please post any news items, press releases, op-eds, etc that you come across in your travels regarding the impending and ongoing destruction of the US dollar. I will edit your individual links into this post for quick reference. Include date of item and the complete text if possible, in case the article disappears later for some reason.


ARTICLES START HERE AND ARE CHRONOLOGICAL STARTING LATE 2009. This is far from a complete volume as the orderly destruction of the dollar has been underway for a long time.

Recent video on these developments and end stages underway:



World Bank warns that USD hegemony not to be taken for granted, other options emerging
http://www.reuters.com/article/businessNews/idUSTRE58Q1YU20090927?feedType=RSS&feedName=businessNews

UN calling for USD influence to be reduced due to financial "confidence games" being played
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSp9VoPeHquI

Iran pushing to remove USD from oil trade revenue and reserves
http://www.presstv.ir/detail.aspx?id=108867&sectionid=351020102

Chavez calls for USD to be replaced for oil trade
http://www.reuters.com/article/companyNewsAndPR/idUSN1731520620091017

Countries meeting privately about replacing the USD
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

Canadian dollar rallies to near parity with USD. Example of how falling USD boosts other currencies upward.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aU5OBX1AsQgA

Russia ready to abandon USD for oil, gas trade with China
http://en.rian.ru/russia/20091014/156468599.html

Geithner: US must live with its means once the economy recovers to protect the USD
http://www.reuters.com/article/ousivMolt/idUSTRE59G24A20091018

Latin America plans USD replacement, regional trade currency called the Sucre.
http://www.presstv.ir/detail.aspx?id=108916&sectionid=351020706
12-13-09 Followup
http://news.yahoo.com/s/ap/20091213/ap_on_re_la_am_ca/cb_cuba_leftist_bloc

Russia, China, Britain working on Iraqi oil field deals (preliminary prices listed in USD but other articles question if that's long term).
http://apnews.myway.com/article/20091017/D9BD30B83.html

Russia Times contributor Max Keiser on USD failure.
YouTube - ‪Max Keiser: Dollar to be buried way before 2018‬‎

Dollar decline is all Matt Drudge's fault because he's a conservative and he links to articles about the dollar collapsing. The Fed's printing presses have nothing to do with it.
http://www.politico.com/news/stories/1009/28530.html

Europe starting to feel the sting of a falling dollar and rising euro. Calls to "prop up the dollar".
http://www.businessinsider.com/god-save-the-dollar-2009-10

Turkey drops USD for commodities trade with Russia and Iran.
http://en.rian.ru/business/20091028/156617011.html

TIME magazine: Is the Dollar Dying a Slow Death?
http://www.time.com/time/business/article/0,8599,1935868,00.html?xid=rss-topstories#ixzz0WDcxHOGj

G20 Leaves door open for fresh dollar pressure
http://www.reuters.com/article/ousivMolt/idUSTRE5A71XS20091108?sp=true

World bank: Yuan to become alternate reserve currency in 10-15 years
http://www.reuters.com/article/marketsNews/idUSSIN49889420091111

UN Secretary General, Ban Ki-Moon, meets privately in US Capitol with US Senators (Kerry, Lieberman, etc) to urge passing of Cap and Trade; global socialism
http://www.washingtonpost.com/wp-dy.../11/10/AR2009111015034.html?hpid=opinionsbox1

China Signals That It May Allow Currency to Rise Against Dollar
http://www.cnbc.com/id/33850971

Gulf Petro-powers to launch Currency in latest threat to Dollar Hegemony (no more oil for USD?)
http://www.telegraph.co.uk/finance/...ency-in-latest-threat-to-dollar-hegemony.html

Do we need a new reserve currency?
http://www.business24-7.ae/Articles...2272009_b60d075ae8834ca981282abc0ee85802.aspx

China says it can't finance US deficits any more due to shrinking current account deficit
http://www.shanghaidaily.com/sp/article/2009/200912/20091218/article_423054.htm

Dollar crisis looms if US can't curb debt: Experts
http://www.cnbc.com/id/34848783

Russia diversifies into Canadian dollar
http://www.ft.com/cms/s/0/22f1bd26-05db-11df-8c97-00144feabdc0.html?nclick_check=1

IMF proposes new Reserve Currency
http://abcnews.go.com/Business/wireStory?id=9958995

Federal Reserve proposes elimination of reserve requirements, as in "fractional reserve banking"
http://www.businessinsider.com/now-...minate-reserve-requirements-completely-2010-3

UN report calls for USD to be scrapped as sole reserve currency
http://www.reuters.com/article/idUSTRE65S40620100629

IMF Documents show plan to turn SDR into global currency (important!)
http://rawstory.com/rs/2010/0805/imf-documents-illustrate-plan-turn-drawing-rights-global-currency/

US Gov't secret plans to destroy USD
http://www.dailyreckoning.com.au/the-us-governments-secret-plan-to-destroy-the-dollar/2010/08/06/

France, G20 talk of new intl currency
http://www.rte.ie/news/2011/0214/g20-business.html

George Soros' meeting of elites to remake the "global economy"
http://www.foxnews.com/opinion/2011...emake-financial-order-media-wheres-reporting/

20% of global GDP (BRICS nations) decides to abandon US dollar for credit agreements and other matters
http://articles.economictimes.india...83_1_economies-food-security-local-currencies

Russia and Iran sign OIL deal, bypassing USD. So have China, Russia, and others. Petrodollar is in final stages....
http://peakoil.com/publicpolicy/pet...an-sign-historic-500000-barrel-a-day-oil-deal

How low can oil go? Low enough to kill the petrodollar, though no MSM articles even mention this very real consequence of sustained low oil.
http://www.reuters.com/article/2014/12/22/us-kaletsky-oil-idUSKBN0K00P820141222

European countries bypassing SWIFT/dollar system for Iranian oil trade
https://www.yahoo.com/news/six-european-countries-join-barter-system-iran-trade-022501492.html

Saudis soon joining BRICS
March 2022
https://www.wsj.com/articles/saudi-...hinese-oil-sales-11647351541?mod=hp_lead_pos6

October 2022
https://theconservativetreehouse.co...saudi-arabia-joining-brics-economic-alliance/

12-7-22
Xi personally attending China-Arab summit
https://www.reuters.com/world/chinas...es-2022-12-07/

 

[devil21]

Here's a couple recent ones from other threads to get this thread started. Feel free to add older articles as well.

http://www.presstv.ir/detail.aspx?id=108867&sectionid=351020102

Oct 17 09
Iran's Trade Promotion Organization has announced a near future plan to completely exclude the US dollar from the country's foreign revenues and reserves.

Iran has recently asked Japan to replace the US dollar with the yen in oil deals it has with the Islamic Republic, Mehr News quoted the organization as saying on Friday.

Since October 2007, Iran has received 85 percent of its oil revenues in currencies other than the US dollar and Tehran is determined to find a substitute for the US dollar for the rest of its 15 percent of oil revenues, the report added.

Iran suggests other currencies such as the euro and the United Arab Emirates' dirham to replace the US dollar for oil revenues.

The constant declining value of the dollar and persisting economic crisis in the US has forced many countries to drop the currency in favor of a more stable and valuable one.

Saudi Arabia, South Korea, China, Venezuela, Sudan and Russia have taken steps to replace the US dollar in their foreign exchange reserves.

http://www.reuters.com/article/companyNewsAndPR/idUSN1731520620091017

COCHABAMBA, Bolivia, Oct 17 (Reuters) - Venezuelan President Hugo Chavez said on Saturday that countries including Venezuela, Russia and Iran had proposed the U.S. dollar should be replaced as the currency used for the oil trade.
"We've been talking about this in OPEC. Venezuela agrees and there are other countries, such as Iran and Russia that have also proposed this idea," Chavez told reporters in the central Bolivian region of Cochabamba, where he was attending a summit of leftist Latin American presidents.

A debate about the issue of replacing the dollar with a basket of currencies in an attempt to stabilize revenues has been widely discussed since a report in the Independent newspaper this month said Gulf states were considering the change. (Reporting by Teresa Cespedes; Writing by Eduardo Garcia; Editing by Peter Cooney)

http://www.reuters.com/article/businessNews/idUSTRE58Q1YU20090927?feedType=RSS&feedName=businessNews

Sept 27 09 WASHINGTON (Reuters) - World Bank President Robert Zoellick said the United States should not take the dollar's status as the world's key reserve currency for granted because other options are emerging.
In excerpts released on Sunday from a speech that he is to deliver on Monday, Zoellick said global economic forces were shifting and it was time now to prepare for the fact that growth will come from multiple sources.

"The United States would be mistaken to take for granted the dollar's place as the world's predominant reserve currency," he said. "Looking forward, there will increasingly be other options."

Zoellick said that a meeting of Group of 20 rich and developing countries in Pittsburgh on Thursday and Friday had made "a good start" toward increased global cooperation but they will have accept global monitoring of their activities.

"Peer review will need to be peer pressure," he said.

Zoellick said that the G20, as the new chief forum for international economic cooperation, also must not forget the 160 countries left outside its structure and should try to open opportunity for them.

"We need a system of international political economy that reflects a new multi-polarity of growth," Zoellick said. It needs to integrate rising economic powers as 'responsible stakeholders' while recognizing that these countries are still home to hundreds of millions of poor and face staggering challenges of development.".

(Reporting by Glenn Somerville; Editing by Diane Craft)

 

[HOLLYWOOD]

Very good idea... wish we were covering this since 2007, because things have REALLY accelerated in the past 2 years.

But we now know, the US government has been fooling Americans and the Planet for far too long.

The Charade is up and this well painted Facade/Scheme is coming to an end. (FIAT MONEY SYSTEM)

The scary part and as I know with my levels of "experience" with government on the black side... they ".Gov" will come up with some devastating plan to maintain control. As you can see we're also now experiencing it with Republicans and Democrats taking opposite roles in the fascist state. Repubacrats/Dumbicans

 

[devil21]

http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

Tuesday, 6 October 2009
Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSp9VoPeHquI

Sept. 7 (Bloomberg) -- The dollar’s role in international trade should be reduced by establishing a new currency to protect emerging markets from the “confidence game” of financial speculation, the United Nations said.

UN countries should agree on the creation of a global reserve bank to issue the currency and to monitor the national exchange rates of its members, the Geneva-based UN Conference on Trade and Development said today in a report.

China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since World War II. China, the world’s largest holder of dollar reserves, said a supranational currency such as the International Monetary Fund’s special drawing rights, or SDRs, may add stability.

“There’s a much better chance of achieving a stable pattern of exchange rates in a multilaterally-agreed framework for exchange-rate management,” Heiner Flassbeck, co-author of the report and a UNCTAD director, said in an interview from Geneva. “An initiative equivalent to Bretton Woods or the European Monetary System is needed.”

The 1944 Bretton Woods agreement created the modern global economic system and institutions including the IMF and World Bank.

Enhanced SDRs

While it would be desirable to strengthen SDRs, a unit of account based on a basket of currencies, it wouldn’t be enough to aid emerging markets most in need of liquidity, said Flassbeck, a former German deputy finance minister who worked in 1997-1998 with then U.S. Deputy Treasury Secretary Lawrence Summers to contain the Asian financial crisis.

Emerging-market countries are underrepresented at the IMF, hindering the effectiveness of enhanced SDR allocations, the UN said. An organization should be created to manage real exchange rates between countries measured by purchasing power and adjusted to inflation differentials and development levels, it said.

“The most important lesson of the global crisis is that financial markets don’t get prices right,” Flassbeck said. “Governments are being tempted by the resulting confidence game catering to financial-market participants who have shown they’re inept at assessing risk.”

The 45-year-old UN group, run by former World Trade Organization chief Supachai Panitchpakdi, “promotes integration of developing countries in the world economy,” according to its Web site. Emerging-market nations should consider restricting capital mobility until a new system is in place, the group said.

The world body began issuing warnings in 2006 about financial imbalances leading to a global recession.

The UN Trade and Development report is being held for release via print media until 6 p.m. London time.

 

[jfriedman]

devil21,

While this is dated, it was a large catalyst before I started posting that was seen as a signal for future dollar weakness.

http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

 

[Bruno]

Canadian Dollar Climbs Toward Parity as Stocks, Crude Oil Rally

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aU5OBX1AsQgA

By Matt Townsend

Oct. 17 (Bloomberg) -- The Canadian dollar rallied for a third straight week, touching a 14-month high and moving closer to parity with its U.S. counterpart as signs of economic recovery pushed commodities and stocks higher.

Canada’s currency gained as crude oil, the nation’s largest export, surged 10 percent and the Dow Jones Industrial Average surpassed 10,000 for the first time in a year. The Bank of Canada will keep interest rates at a record low level when it meets on Oct. 20, according to all 23 economists in a Bloomberg News survey.

“As long as equities continue to go up, it will be positive for the Canadian dollar,” said Maria Jones, a currency trader in Toronto at TD Securities Inc., a unit of Canada’s second-biggest bank. Stocks will continue to rally as long as “we are seeing moderate growth in the U.S.” and the Federal Reserve holds interest rates near zero.

The Canadian currency, nicknamed the loonie for the aquatic bird on the C$1 coin, appreciated 0.5 percent to C$1.0370 per U.S. dollar yesterday in Toronto, from C$1.0422 on Oct. 9. One Canadian dollar buys 96.44 U.S. cents. The currency climbed to $1.0207 on Oct. 15, the strongest level since July 29, 2008. The loonie and the U.S. dollar last traded on a one-for-one basis on July 22, 2008.

Employment in Canada rose last month six times more than forecast, unexpectedly reducing the jobless rate to 8.4 percent, the government said on Oct. 9. Service industries in the U.S., the nation’s biggest trade partner, expanded in September for the first time in a year, an Institute for Supply Management index showed on Oct. 5. U.S. retail sales excluding automobiles climbed 0.5 percent last month, more than forecast, the Commerce Department said on Oct. 14.

Parity Probability

The probability that the Canadian currency will trade at C$1 per U.S. dollar at year-end is 60 percent, according to implied volatility from options trading monitored by Bloomberg. The chance of parity in one month is 42 percent, trading shows.

The Canadian currency pared its advance yesterday, depreciating 0.3 percent, after Statistics Canada said the consumer price index declined in September for a fourth month, the longest stretch since 1953. The report spurred speculation that subdued inflation will allow the Bank of Canada to leave borrowing costs unchanged next week.

The annual inflation rate excluding gasoline and seven other volatile items -- the so-called core rate the central bank uses to discern future price trends -- slowed to 1.5 percent, from 1.6 percent in August.

‘To Allay Fears’

The inflation data “will go a long way to allay fears of an early hike by the BOC,” David Watt, senior currency strategist in Toronto at RBC Capital Markets, wrote in a note yesterday. The firm is a unit of Canada’s biggest bank.

Central bank policy makers restated at their last meeting in September a pledge to keep the benchmark overnight interest rate unchanged through June 2010 unless the outlook for inflation changes. The rate has been at a record low 0.25 percent since April. It was 4.5 percent when the bank began lowering it in December 2007.

Canadian Prime Minister Stephen Harper said yesterday in remarks to reporters in Toronto that he shares Bank of Canada Governor Mark Carney’s concern that gains in the country’s currency could slow recovery. Carney said in a speech on June 4 that a persistently strong Canadian dollar would “work against” positive factors such as improved trade.

‘Rhetoric’ Speculation

“The big speculation is that they might increase their rhetoric in regards to the currency,” TD’s Jones said. “They can talk, but the question for the markets is, are they going to act? If you don’t think they are going to act, then the talk really doesn’t mean anything.”

The Standard & Poor’s 500 Index gained 1.5 percent this week as JPMorgan Chase & Co. and Intel Corp. posted better-than- expected earnings. So far, 80 percent of companies in the index surpassed third-quarter earnings estimates.

Should companies continue to surprise investors on earnings, “it will be good for equities and put ongoing downward pressure on the U.S. dollar,” wrote Camilla Sutton and Sacha Tihanyi, currency strategists at Scotia Capital Inc. in Toronto, in a note yesterday. The firm is a unit of Canada’s third-largest bank.

The Reuters/Jeffries CRB Index, a gauge of 19 raw materials and commodities, rallied 5.2 percent, the biggest weekly gain since May. Canada generates more than half of its export revenue from raw materials, including oil. Crude oil for November delivery touched $78.75 a barrel on the New York Mercantile Exchange yesterday, the highest level in a year.

Government bonds rose this week, pushing down the benchmark 10-year note’s yield four basis points, or 0.04 percentage point, to 3.47 percent. The price of the 3.75 percent security maturing in June 2019 increased 31 cents to C$102.26.

Canadian government debt lost investors 1.6 percent this year, according to a Merrill Lynch index.

 

[devil21]

http://en.rian.ru/russia/20091014/156468599.html

20:5014/10/2009
BEIJING, October 14 (RIA Novosti) - Russia is ready to consider using the Russian and Chinese national currencies instead of the dollar in bilateral oil and gas dealings, Prime Minister Vladimir Putin said on Wednesday.

The premier, currently on a visit to Beijing, said a final decision on the issue can only be made after a thorough expert analysis.

"Yesterday, energy companies, in particular Gazprom, raised the question of using the national currency. We are ready to examine the possibility of selling energy resources for rubles, but our Chinese partners need rubles for that. We are also ready to sell for yuans," Putin said.

He stressed that "there should be a balance here."

On Tuesday, Russia and China agreed terms for Russian gas deliveries at a level of up to 70 billion cubic meters a year. China also imports oil from Russia.

The Russian prime minister said the issue would be addressed among others at a meeting of Shanghai Cooperation Organization (SCO) finance ministers, who are to convene before the end of the year in Kazakhstan.

Britain's Independent newspaper reported last Tuesday that Russian officials had held "secret meetings" with Arab states, China and France on ending the use of the U.S. dollar in international oil trade.

The countries are reportedly seeking to switch from the dollar to a basket of currencies including the euro, Japanese yen, Chinese yuan, gold, and a new unified currency of leading Arab oil producing countries.

The Independent said the meetings have been confirmed by Chinese and Arab banking sources.

 

[catdd]

One of my favorite philosophers from the 60s and early 70s, Alan Watts, wrote about what is happening in this country. He wasn't a fortune teller or anything of the sort; he just had a reasonable guess that we would one day be printing more money than the production of goods and it would cause a gross imbalance.
He talked about the perpetual wars we would be having and how it would become necessary to dream up emergencies so that we could print more money to continue the illusion of prosperity.
Actually, writing from 1970, he didn't think we would last beyond the year 2000, but I guess he underestimated our resourcefulness.
It was a very interesting short essay entitled : Wealth Verses Money

In the back of my mind, I guess I've been expecting this.

 

[devil21]

An example of political jawboning of the failing dollar. No really, Geithner saying the US needs to live within its means. I wonder if he means *us* or *them*?

http://www.reuters.com/article/ousivMolt/idUSTRE59G24A20091018

Oct 18 09
WASHINGTON (Reuters) - The United States must live within its means once its economy recovers if it is to preserve global confidence in the U.S. dollar's status, Treasury Secretary Timothy Geithner said on Friday.

The comments came as the Obama administration reported a record U.S. budget deficit for the fiscal year ended September of $1.4 trillion. At 10 percent of gross domestic product, it was the biggest U.S. fiscal shortfall since World War Two.

Rescuing the economy and some of the country's biggest banks from the worst recession since the Great Depression took a toll on U.S. finances, and the White House has forecast deficits of more than $1 trillion through fiscal 2011.

"Future deficits are too high, and the president is committed to working with Congress to bring them down to a sustainable level as the economy recovers," Geithner said in a statement accompanying the fiscal data.

Separately, White House economic adviser Lawrence Summers said financial firms that helped precipitate two years of economic crisis are going to have to bow to stiffer oversight of their activities to prevent it happening again.

Geithner and other policymakers will discuss the U.S. economic and budget outlook, and prospects for financial regulatory reform, at the Reuters Washington Summit on October 19-21.

FISCAL OUTLOOK AFFECTS U.S. DOLLAR

On Friday, Geithner said the U.S. dollar's status as a key reserve currency carries special responsibilities that include keeping spending under control, Geithner said earlier on Friday in an interview on CNBC television.

"It is very important that Americans understand that we need to do everything possible to sustain confidence in our ability to keep inflation low and stable over time and to make sure we're getting our fiscal house in order," Geithner said.

Developments over the past year, when many investors put their money into U.S. Treasury securities and the dollar rose at times, showed there was still a great deal of confidence in U.S. economic management.

"The world wanted to be in Treasuries, in the safest and most liquid markets, and you saw the dollar rose when people were most concerned about the future of the world," he said.

"That is a very important thing. It's not something you can count on. It's something we can understand, and we can continue to foster, and we're going to do that," Geithner added.

The administration has to be careful not to withdraw economic stimulus too fast though, Geithner added. But he denied that the administration was ready to consider a second economic stimulus program.

Geithner said access to credit in the overall economy has improved dramatically but many small businesses that typically create many jobs still face borrowing constraints.

The Obama administration is working on measures to help small businesses get easier access to credit -- possibly by diverting some bank bailout funds to them -- but hasn't yet announced a program to do so.

BANKING NEEDS TO CHANGE

Summers also argued for change to the banking system.

After two years of economic crisis and government rescue efforts, he said the banks at the center of the credit debacle had a moral imperative to be part of the solution.

"Financial institutions that have benefited from government support can, should, and must use this moment to think about what they can do for their country -- by accepting the necessary regulation to protect the American people," Summers told an audience of financial market participants. "Wall Street was no small part of the cause of the crisis and Wall Street needs to be part of the solution."

Summers, chairman of the National Economic Council, suggested banks had little choice in the matter.

"There is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support," he said. "This has direct relevance on the changing nature of the social compact between the financial sector and the broader economy."

The Obama administration has been pressing for wide-ranging reforms in U.S. financial regulations. It scored a victory on Thursday when a House of Representatives' panel passed a bill to tighten regulation of financial derivatives -- contracts derived from existing securities or transactions that are blamed for amplifying the 2008 crisis.

New, tighter regulation doesn't mean, however, that financial firms will never go bust again. In fact, Summers said that such firms must be able to fail for market discipline to work.

In addition to that, though, profitability and prudence should be reconciled under any framework of financial regulation.

"The financial system has to be safe for failure," said Summers.

Summers also said officials need to avoid prematurely withdrawing measures meant to stimulate the economy after the worst recession in decades, noting discussion of any "exit strategy" would be different on Main Street than it would on Wall Street.

(Reporting by Glenn Somerville, Walter Brandimarte and Burton Frierson; Editing by Andrew Hay)

 

[RSLudlum]

Latin America plans US dollar replacement
Sat, 17 Oct 2009 16:13:51 GMT

Leftist Latin American leaders have agreed on using a new intra- regional trading currency, dubbed as Sucre, instead of the US dollar.

Bolivian President Evo Morales, who hosted leaders of the Bolivarian Alternative for Latin America and the Caribbean (ALBA), said that the “document is approved.”

During the seventh ALBA summit, the leaders agreed on the currency reform as well as approving plans to impose economic sanctions against the coup leaders in Honduras, AFP reported.

The currency, Sucre, is named after Jose Antonio de Sucre who fought for Spain's independence alongside Venezuelan hero Simon Bolivar in the early 19th century.

Sucre is scheduled to be rolled out in 2010 in a non-paper form.

The nine members of ALBA, conceived by Venezuelan President Hugo Chavez, are Cuba, Dominica, Venezuela, Ecuador, Nicaragua, Honduras, Saint Vincent and Antigua, Bolivia and Barbuda.

The bloc also agreed to replace the International Center for Settlement of Investment Disputes, which is in charge of arbitrating international disputes and has probed a large number of contract disputes between Western energy firms and members of ALBA.

ALBA, which has already lost many of its members, including Ecuador, is echoing the moves of the European Union and its introduction of euro.

http://www.presstv.ir/detail.aspx?id=108916&sectionid=351020706

also, in light of Russia and China considering using their currencies in bilateral oil/gas trade this might be of interest:

Iraq approves oil deal with BP[/Chinese]-led consortium

Oct 17, 4:59 PM (ET)
By SINAN SALAHEDDIN

BAGHDAD (AP) - The Iraqi government said Saturday it has approved a contract with a British-Chinese consortium to develop a prized oil field in southern Iraq, a significant achievement for a country that has struggled to attract foreign investors despite its vast natural resource wealth.

The deal was the only one to emerge from a disappointing bidding round in June offering development rights for six oil and two gas fields. It was Iraq's first such bidding process in over three decades, but foreign firms felt the prices set by the government were too low given continued violence in the country and disputes over natural resource control.

But things have been looking up in recent days for Iraq's hope to use increased oil revenue to recover from years of war and sanctions. Earlier in the week, three international consortiums agreed to meet the Iraqi government's price to develop oil fields in the country.

Even more important is the Iraqi Cabinet's approval of the bid by Britain's BP PLC (BP.) and its Chinese partner CNPC to develop the 17.8 billion barrel Rumaila field near Iraq's southern city of Basra. The deal was approved late Friday, Iraqi government spokesman Ali al-Dabbagh told The Associated Press, without providing further details.

According to the agreement, BP will hold a 38 percent stake in the venture and CNPC will have a 37 percent share. Iraq's State Oil Marketing Organization will control the rest.

"It is a very important event ... very promising for Iraq," said Samuel Ciszuk, an energy analyst with the London-based IHS Global Insight. "The huge incremental this project alone could bring in a relatively short period of time ... is very important."

Iraq has the world's third-largest known oil reserves, and crude exports are the country's most important source of revenue. But Iraq's current daily output of 2.4 million barrels is far below the country's potential.

Iraq's oil industry has been hampered by years of devastating wars, crippling sanctions and sabotage attacks by insurgents after the 2003 U.S.-led invasion. In addition, Iraq's oil law, governing natural resources and regulating foreign investment, has been stalled in parliament since 2007, prompting international companies to stay away.

The Rumaila deal is the second major one struck by CNPC in postwar Iraq. Last year, CNPC signed a $3 billion deal to develop the al-Ahdab oil field in southern Iraq.

The deal also marks the return of BP to Iraq after the British oil giant and other Western companies were pushed out following the nationalization of the oil industry in the 1970s.

Daily production from the Rumaila field is at about 1 million barrels a day. BP's targeted production for the oil field is 2.85 million barrels a day within seven years.

The BP-CNPC consortium originally bid to take $3.99 per barrel produced, but later slashed the offer to the $2 per barrel payment sought by the Iraqi Oil Ministry. The competing bid in June was from a consortium led by U.S. giant Exxon Mobil, which refused to amend its offer of $4.80 per barrel.

Earlier this week, Iraq's oil minister Hussain al-Shahristani said the ministry was revisiting the June bidding after three international oil consortiums submitted revised offers and accepted Iraq's terms for developing two oil fields in southern Iraq.

The two deals could be signed within with two weeks, al-Shahristani said.

A consortium led by Italy's Eni has agreed to develop Basra's 4.1 billion barrel Zubair oil field for $2 per barrel produced based on a target production level of about 1.1 million barrels per day.

Two other consortiums, one led by Russia's Lukoil and ConocoPhilips, and the other by Exxon Mobil with Royal Dutch Shell, are competing to develop the 8.6 billion barrel West Qurna Stage 1 oil field in Basra for $1.90 per barrel.

The Lukoil-led consortium's targeted production is 1.5 million barrels a day, while the other consortium's targeted production is 2.1 million barrels a day, al-Shahristani said.

Italy's Eni had previously bid $4.80 per barrel to develop the field, while the Lukoil consortium submitted an earlier bid of $6.49 per barrel and the Exxon Mobil-led consortium was asking for $4 per barrel.

Zubair is currently producing about 230,000 barrels per day, while West Qurna Stage 1 is producing about 280,000 barrels a day. Al-Shahristani said that the three fields' combined output would exceed 6 million barrels a day in six years with a total direct investment from these firms expected to be about $100 billion.

The second bidding round is scheduled for December. Forty-five international oil companies are set to bid for 10 oil projects on offer.

The overall fall in oil prices since last year has forced the government to slash spending plans for this year from $79 billion to $58.6 billion. The oil sector represents about 65 percent of Iraq's gross domestic product and its revenues account for 95 percent of Iraq's earnings.


http://apnews.myway.com/article/20091017/D9BD30B83.html

 

[devil21]

Oct 6 09
YouTube - Max Keiser: Dollar to be buried way before 2018

 

[devil21]

USD index. DXY, dropped briefly below 75 today. It rebounded to 75.09 only because equities tanked in late trading. The downward spiral continues....and it's ALL MATT DRUDGE'S FAULT! It has nothing to do with the Fed monetizing gobs of debt...

http://www.politico.com/news/stories/1009/28530.html

Oct 21 09
On Tuesday, Matt Drudge ran a headline about the weakening U.S. dollar on his website, Drudgereport.com. In and of itself, that would be unremarkable, except that it was the 18th time Drudge had posted a link to a story about the weak dollar this month.

And October was only 20 days old.

Clearly, Matt Drudge has developed a fascination with the declining U.S. dollar.

“He’s fixated on it,” said Tom Rosenstiel, director of the Pew Research Center’s Project for Excellence in Journalism. “There’s no question that Drudge can alter what people are paying attention to.”

Market watchers say it’s unlikely that Drudge is actually moving the currency markets with his relentless attention.

“I don’t think that anyone who seriously trades currencies reads The Drudge Report before making important buy or sell decisions,” said Chris Roush, a professor of business journalism at the University of North Carolina at Chapel Hill.

But Drudge does have the ability to put news items on the radar screen of major media outlets and political figures in Washington. And other people are paying attention to Drudge, too: A source close to the U.S. national security community said that Drudge’s link to a story in the [London] Independent earlier this month instantly grabbed the attention of senior American officials.

The story raised the prospect that foreign governments were in talks to replace the U.S. dollar as the default currency for oil trading. Any kind of coordinated attack on the value of the dollar could be seen as a national security threat, and defense and intelligence officials were curious about the source of the anti-dollar rumors that day.

On Tuesday, Drudge spotlighted a one-paragraph item from the Agence France-Presse news service titled “We are ‘worried’ about weak dollar: Eurogroup chief.”

That same day, the dollar hit a new 14-month low against the euro, with the continental currency trading as high as $1.4994 against the dollar. That represented a continuation of the greenback’s steady slide this year: The euro traded at $1.25 against the dollar as recently as March.

Drudge’s interest in the brutal year for the buck is intensifying. According to a search of the website DrudgeReportArchives.com, which is not affiliated with Drudge himself, the Internet pioneer has already posted more stories on the dollar in October than he did the month before, when he posted links to 13 stories about the currency.

“There’s definitely an appetite from a fairly large number of people for these kinds of stories,” said former Bush Treasury and White House spokesman Tony Fratto, who is now a CNBC contributor. “People are looking for cheat sheets for how the economy is doing, and they look to the Dow, the unemployment number and now the value of the dollar.”

Many economists say one reason for the slumping dollar is the strengthening global economy. In the darkest days of the financial collapse last year, investors flocked to the dollar — largely because it is seen as a safe, if low-return, investment in troubled times.

What’s more, there’s one economic upside to a soft dollar: increased exports for U.S. manufacturers. Reporter Nelson Schwartz noted in an article in The New York Times on Sunday: “A weak dollar could prove beneficial to the American economy by aiding long-suffering manufacturers, rebuilding a stronger industrial base and lifting exports even if it makes life harder for trading partners around the world, especially in Europe.”

But that Times article, titled “In Dollar’s Fall, Upside for U.S. Exports,” did not receive a link from Drudge.

Drudge also has tried to tie President Barack Obama to the dollar’s plunge. “Obama Dollar Retreats Most Against Commodities in Wealth Shift,” noted Drudge’s link to a Bloomberg story Oct. 13. “Obama Under Fire Over Dollar,” he headlined Oct. 7, linking to a story in the Financial Times.

That’s leading some to conclude that Drudge’s conservative politics are playing a part in his focus on the issue.

“I think Drudge has been taking a page out of Fox News’ playbook,” said Adam Penenberg, a journalism professor at New York University and author of “Viral Loop: From Facebook to Twitter, How Today’s Smartest Businesses Grow Themselves.”

“Because Republicans have been making hay over their belief that America is becoming weak, its “socialist” economy in shambles, stories on the falling dollar help buttress this worldview,” Penenberg said.

One financial consultant who asked not to be named agreed with that analysis. “The problem is now that fundamentals-driven dollar weakness is being politicized as an anti-Obama weapon, thus Drudge,” said the consultant. “Drudge is simply looking at the charts and then hitting the administration on it.”

Other conservatives have been interested in the decline of the dollar as well this month. On Oct. 6, former Alaska Gov. Sarah Palin posted an item on her Facebook page reacting to the reports of an anti-dollar effort in the oil markets.

“Even the possibility of such a talk weakens the dollar and renews fears about its continued viability as an international reserve currency,” Palin wrote. “In fact, today a United Nations official called for a new global reserve currency to replace the dollar and end our ‘privilege’ to run up huge deficits.”

Palin laid the blame for the weak dollar squarely on the Obama administration: “All of this is a result of our out-of-control debt,” she wrote. “This is why we need to rein in spending.”

Traditionally, the dollar is a topic that politicians shy away from, since too-casually worded comments by officeholders can accidentally tank the currency markets. But that’s been changing in recent months as the decline of the dollar has mirrored larger concerns about the state of the U.S. economy and America’s place in the post-crash financial world order.

 

[denison]

great thread. keep it updated.

 

[devil21]

http://www.businessinsider.com/god-save-the-dollar-2009-10

Oct 20 09
With the U.S. dollar at a 14-month low against the Euro, the pressure is on for the European Union to join Brazil and certain Asian economies in helping prop up the dollar.

Concerns were voiced today as the Euro continues its climb:

European Central Bank President Trichet said “excessive volatility” in currency rates is “bad for economic development.” His comment was seconded by Jean-Claude Juncker who said “It’s a problem that worries us."

What you're seeing now is a sharp reversal from the tone from just a few weeks ago, when central bankers were stoking rumors about a new reserve currency to replace the dollar. The European Central Bank is considering taking steps to ensure that the dollar doesn't drop any further against the Pound and the Euro:

Investors are concerned that the Euro-Zone finance ministers convening at a regular meeting later in the day in Luxembourg could fire warning shots over EUR strength. This could ramp up pressure on the European Central Bank (ECB) to consider steps to curb any further rises in the currency, analysts said.

And it doesn't end there...

DailyFinance: "We have to save the soldier dollar," blares the headline in a recent economy column in France's leading daily Le Monde. Columnist Pierre-Antoine Delhommais goes on to explain that if the dollar crashes, "exports would collapse, growth would sink and the unemployment rate would explode." In fact, the euro's nearly 19 percent climb since March already seems to be wreaking havoc with the exports from the Eurozone's 16 member countries. The European statistics office just announced that exports from the region fell 5.8 percent in August compared with July.

 

[not.your.average.joe]

http://www.businessinsider.com/god-save-the-dollar-2009-10Oct 20 09
With the U.S. dollar at a 14-month low against the Euro, the pressure is on for the European Union to join Brazil and certain Asian economies in helping prop up the dollar.

Concerns were voiced today as the Euro continues its climb:

European Central Bank President Trichet said “excessive volatility” in currency rates is “bad for economic development.” His comment was seconded by Jean-Claude Juncker who said “It’s a problem that worries us."

What you're seeing now is a sharp reversal from the tone from just a few weeks ago, when central bankers were stoking rumors about a new reserve currency to replace the dollar. The European Central Bank is considering taking steps to ensure that the dollar doesn't drop any further against the Pound and the Euro:

Investors are concerned that the Euro-Zone finance ministers convening at a regular meeting later in the day in Luxembourg could fire warning shots over EUR strength. This could ramp up pressure on the European Central Bank (ECB) to consider steps to curb any further rises in the currency, analysts said.

And it doesn't end there...

DailyFinance: "We have to save the soldier dollar," blares the headline in a recent economy column in France's leading daily Le Monde. Columnist Pierre-Antoine Delhommais goes on to explain that if the dollar crashes, "exports would collapse, growth would sink and the unemployment rate would explode." In fact, the euro's nearly 19 percent climb since March already seems to be wreaking havoc with the exports from the Eurozone's 16 member countries. The European statistics office just announced that exports from the region fell 5.8 percent in August compared with July.

We are witnessing and living through absolute insanity right now. Dont they realize how insane it is to think the wolrd economy would come to an end without the dollar? This is absurd, i can hardly believe it.
What, they dont want their currency to rise in value against the dollar so they can continue to borrow us money to buy the stuff they make!?!
LOL, they cant trade goods without a green piece of paper that is now flooding the world!!! Holy crap, everyone would lose their jobs if it werent for this great piece of green paper!!!

This is almost as rediculous as the tulip mania!!!

 

[devil21]

http://en.rian.ru/business/20091028/156617011.html

Oct 28 09
ANKARA, October 28 (RIA Novosti) - Turkey is switching to national currencies in trade with Iran and China, ending dependence on the U.S. dollar and the euro for about 20% of its commodity turnover, local media reported on Wednesday.

Turkey has already switched to settlements in national currencies with Russia amid weakening confidence in the greenback as the world's major reserve currency. The move was initiated by Turkish President Abdullah Gul during his visit to Moscow in February.

Turkey's decision to make settlements with Iran and China in national currencies was announced during a visit to Iran by Turkish Prime Minister Recep Tayyip Erdogan. The Turkish premier told a Turkish-Iranian business forum on Tuesday that the countries had prepared a legal framework for transition to settlements in national currencies.

"We have adopted a necessary legislative act and are prepared for the transition," the Turkish newspaper Milliyet quoted Erdogan as saying.

According to the paper, Turkey's trade with Russia, Iran and China exceeds $65 billion a year. Russia is Turkey's largest trade partner, with $37.8 billion commodity turnover registered last year.

Russian Prime Minister Vladimir Putin said on October 14 that Russia was ready to consider using the Russian and Chinese national currencies instead of the dollar in bilateral oil and gas dealings.

"We are ready to examine the possibility of selling energy resources for rubles, but our Chinese partners need rubles for that. We are also ready to sell for yuans," Putin said.

Britain's Independent newspaper reported in early October that Russian officials had held "secret meetings" with Arab states, China and France on ending the use of the U.S. dollar in international oil trade.

The countries are reportedly seeking to switch from the dollar to a basket of currencies including the euro, Japanese yen, Chinese yuan, gold, and a new unified currency of leading Arab oil producing countries.

The Independent said the meetings have been confirmed by Chinese and Arab banking sources, although Russian officials said they had no knowledge of the talks.

 

[devil21]

http://www.time.com/time/business/article/0,8599,1935868,00.html?xid=rss-topstories#ixzz0WDcxHOGj

Nov 6 09
Is the Dollar Dying a Slow Death?

The U.S. dollar seems to have as many lives as a cat. Even before 2008's financial crisis, as the dollar slumped against other major currencies, countless pundits and economists predicted its demise as the global economy's No. 1 currency. The doomsayers seemed vindicated when the U.S. economy descended into the worst recession since the 1930s, with its financial sector in tatters. How could an already weakened greenback maintain its value as American economic prowess withered? But then — surprise! — investors around the world decided the good old greenback was a safe haven in a time of great uncertainty. The dollar was resurrected, reversing years of slow decline.

That strength turned out to be temporary. A ballooning U.S. budget deficit and escalating government debt has made the dollar currency non grata in many quarters once again. An index that measures the greenback's value against a basket of major currencies, including the euro and yen, has fallen about 15% from a three-year high reached in March and is now hovering near a 14-month low. Economists and analysts expect the dollar to lose a lot more ground. Daisuke Uno, chief strategist at Japan's banking giant Sumitomo Mitsui, believes the Japanese currency could strengthen to 50 yen to a dollar by 2011 (from around 90 today) due to continued weakness in the U.S. economy. Harvard historian Niall Ferguson says the dollar could slide by as much as 20% on a trade-weighted basis over the next 12 months. The process may be protracted, he argues, but the dollar is dying. In 10 years' time, he said in October, "it won't be such a dollar-dominated world. I'm sure of that."
(See 10 big recession surprises.)

So has the dollar finally used up the last of its nine lives? There are worrying signs that the world is losing its appetite for dollars. The International Monetary Fund announced on Nov. 2 it was selling 200 metric tons of gold to India's central bank for $6.7 billion. News of the purchase sent gold prices to an all-time high. The move was widely seen as part of an effort by central banks around the world to diversify their extensive U.S. dollar holdings. Steven Englander, chief U.S. currency strategist at Barclays Capital in New York City, figures that in the second quarter, dollars accounted for only 37% of new reserves accumulated by central banks worldwide. That's the lowest proportion on record for any quarter during which reserves increased significantly. At a time when many central banks are boosting their reserves, they are choosing to buy euro and yen instead. "Central banks are doing more than talking about reducing the concentration of [the U.S. dollar] in their reserve portfolios. They are actually acting on their statements," Englander wrote in an October report.

If that shift from talk to action continues, the consequences could be severe and wide-ranging. Central bankers are the currency market's buyer of last resort, and thus the private sector's view of the dollar's value and stability can be heavily influenced by what they do. Still, there are many constraints to how far and fast the dollar falls. The issue facing central bankers is a complex one. They may wish to limit their exposure to a weakening dollar, but they don't relish the ugly fallout from doing anything to further weaken it. "We certainly don't think we're at the end of the dollar," Barclay's Englander told TIME. "It's in no one's interests."
(See how Americans are spending now.)

One big worry of central bankers is how a softening dollar could impact a global recovery. Countries that have currencies strengthening against the dollar face the prospect that their exports would become pricier in world markets, a situation policymakers wish to avoid as their economies are just now crawling out of recession. China, one of the world's largest holders of dollars, doesn't appear likely to allow its currency, the renminbi, to significantly appreciate against the dollar any time soon, despite increasing political pressure from Washington to do so. China's Commerce Minister, Chen Deming, said at the recent Canton Trade Fair, a major showcase for China's manufacturers, that the "basic stability" of the yuan exchange rate needed to be maintained so exporters can have a predictable business environment. Another source of stability is the difficulty central banks have disposing of dollars they already hold. Dumping dollars on world markets would only depress its value further, undermining nations' own reserves. "Central banks will continue to get out of dollars on the margins, but they don't want to be seen selling dollars hand over fist," Englander says. Besides, with economies weak and interest rates at low levels throughout the industrialized world, there is a lack of better choices. "The dollar may not be attractive, but when you look at the alternatives, nothing is that exciting," says Englander.

These sources of support may not last forever. Warren Buffett warned in a New York Times editorial in August that the unrestrained buildup of U.S. government debt — and the likely need to print money as a result — would inevitably undermine the dollar's value. "Unchecked greenback emissions will certainly cause the purchasing power of currency to melt," the sage of Omaha wrote. "The dollar's destiny lies with Congress." Richard Portes, a professor of economics at the London Business School, believes that central banks will increasingly see other currencies, especially the euro, as more reliable storehouses of value. "The idea that there is no place to go is wrong," Portes says. If that's the case, the dollar better hope it has even more lives than a cat.
— With reporting by Yuki Oda / Tokyo

 

[HOLLYWOOD]

The Dollar will grow in strenght since Health Care has passed... behind closed doors US montetary controllers are reassuring the finance masters of the world that the US has a newly passed resource of revenue called the "Dark Pool HC funding"

"Americans will be force and squeezed out of a every nickel into a National HC general fund that the FEDERAL RESERVE and US TREASURY will sell TRILLIONS in debt upon in the future. After the Dark Pools of Social Security, Medicare/caid, and National Health Care are maxed out... the Money Masters of the United States of America, will go to the newly conjured global currency. In their means, the Money Masters will devalue the US greenback many times over to write down the debt and open the flood gates of Servitude upon the American people..." HOLLYWOOD

 

[devil21]

These sorts of articles worry me the most. The continued G20 "commitments" to transfer wealth from developed nations, like the US, to developing nations. It's global socialism and seems to me how they are going to restart the cycle all over again elsewhere. That's bad news for the USD.

G20 leaves door open for more dollar pressure
http://www.reuters.com/article/ousivMolt/idUSTRE5A71XS20091108?sp=true

Nov 8 09
LONDON (Reuters) - The U.S. dollar may come under renewed pressure from emerging market currencies and the euro after a meeting of the world's top finance officials failed to take concrete action on rebalancing global money flows.

Finance ministers and central bank governors of the Group of 20 major countries, meeting in Scotland at the weekend, launched a "framework" in which they will discuss how to reduce trade and savings imbalances between nations.

But their communique talked only in general terms about rebalancing economies, and implied they might not agree on specific policies for individual countries to adopt before the end of next year at the earliest.

The result may be a continuation of heavy fund flows into emerging markets, boosting currencies there. And central banks intervening to slow currency appreciation may keep investing much of the money they obtain in the euro, pushing up that currency too.

"We're probably looking at fresh dollar weakness in the short term" in the wake of the G20 meeting, said Kenneth Broux, senior markets economist at Lloyds TSB.

CHINA, BRAZIL

At the center of the currency issue is China's reluctance to permit appreciation of its tightly controlled yuan, which it has kept flat against the dollar since mid-2008.

That has prompted additional fund flows into emerging market currencies that do trade freely, such as the Brazilian real, which has soared over 30 percent this year. Last month, Brazil slapped a 2 percent tax on foreign investments in fixed income and stocks in an effort to slow the real's rise.

Last week, Brazilian officials said they would discuss this problem at the G20 meeting. But the G20 communique made no reference to the issue, and Brazil appeared to get little sympathy from a senior official of the International Monetary Fund, which is a key player in the global rebalancing campaign.

Youssef Boutros-Ghali, who chairs the International Monetary and Financial Committee, the IMF's policy steering committee, told Reuters that Brazil's tax was unlikely to work and that "we should not be fixated on currencies.

Officials from several countries, including Brazil, Japan and Indonesia, urged China on the sidelines of the meeting to let the yuan move more flexibly.

But as a group, the G20 did not press China on the sensitive issue, G20 sources said. British finance minister Alistair Darling told reporters: "We didn't discuss the renminbi. I think that's a question for China rather than us."

In fact, China appeared in a combative mood. Finance Minister Xie Xuren and central bank governor Zhou Xiaochuan, speaking to the official Xinhua news agency after the meeting, made no mention of the yuan and instead warned developed countries to focus on the quality of their own policies.

Xie said countries with global reserve currencies should work to maintain the currencies' value, to avoid destabilizing the global economy -- implying it was up to Washington, not Beijing, to resolve the issue of the weak dollar.

The silence on the yuan in Scotland suggested countries accepted the G20 was not a forum in which to press China. The other main global economic forum, the Group of Seven nations, last met in October; it did mention the yuan, but only in the softest terms, "welcoming China's continued commitment" to free up the yuan without referring to a timetable.

REBALANCING
The G20 did publish a detailed, unprecedented timetable for countries to discuss the economic rebalancing that could eventually bring more stability to global currency markets.

In an appendix to the communique, G20 countries were asked to submit descriptions of their monetary, fiscal and other policies and plans to the IMF by the end of January 2010. The IMF would produce an analysis of the global economy by April.

G20 countries would then "develop a basket of policy options" in June, and G20 leaders would consider recommendations for policies at a summit in November 2010.

But this plan is clearly constrained by diplomatic sensitivities. For example, the appendix said that, in the first half of next year, the IMF would not recommend policies for specific countries but merely for "groups of countries facing similar circumstances" -- apparently ruling out an explicit recommendation to appreciate the yuan.

So in the short term, currency market trends look as if they will be left to continue, said Simon Derrick, senior currency strategist at Bank of New York Mellon in London.

"It is hard to imagine a level playing field for currencies without resolving the issue of the yuan," he said.

 

[devil21]

World Bank: Yuan to become alternate reserve currency in 10 to 15 years

http://www.reuters.com/article/marketsNews/idUSSIN49889420091111

SINGAPORE, Nov 11 09 (Reuters) - World Bank President Robert Zoellick said on Wednesday that the U.S. dollar's role as a reserve currency was "relatively secure", but the Chinese yuan will provide an alternative over time.
"Over the next 10-15 years, you will firstly see renminbi to be internationalised and provide an alternative," he said at a World Bank conference in Singapore.

Zoellick also said the U.S. should not be complacent about the dollar. (Reporting by Kevin Lim and Kevin Yao; Editing by Neil Chatterjee)

I think that's an overly generous time frame considering how many gazillions of USD would be printed in that length of time. Im thinking 5 to 10 years max. They won't tip their cards enough for the common people to know enough to prepare accordingly.