Wobbly Dollar puts Asian economies at Risk

Discussion in 'International Politics' started by sob, Nov 13, 2009.

  1. sob

    sob Moderator Moderator

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    The Asian economies do not seem to have learnt a lesson on the last crisis that hit tem in late 90s. The Dollar addiction of these export driven economies makes them hostage to the fluctuations of the Greenback.

    With US not able to control it fast mounting debt there is a very real scenario of the Dollar crashing. All the asian countries including India have huge reserves of US Dollar and any sign of the Dollar crashing is making them sweat.

    This is an op-ed in mint which does paint a grim scenario for the Asian economies. In light of this articles the recent decision by the RBI to buy 200 Tons of Gold makes immense logic. IMO we can expect more such purchases by the RBI.

    Cautious Asian bankers may call Obama’s loan

    Cautious Asian bankers may call Obama?s loan - Columns - livemint.com
     
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  3. sob

    sob Moderator Moderator

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    Countries Prop up the Dollar

    Worried about the impact of the falling Greenback, on their fragile economic recoveries, countries around the world are trying to prop up the Dollar. There is also renewed pressure on China to let it's currency the Yuan appreciate against the Dollar, which it has been pegging to a very narrow band against the Dollar.

    World Tries to Buck Up Dollar - WSJ.com

    To countries like Iran and Venezula who have been tying to end the domination of the US Dollar this must be coming in as a big reality check, the Dollar remains the most dominant currency in the world today and will remain so in the near future also.
     
  4. hit&run

    hit&run Elite Member Elite Member

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    No replacement for US dollar: PM
    Praising the entrepreneurial spirit of the American enterprise, Prime Minister Manmohan Singh has said that there can be no substitution for the US dollar.

    "As far as I can see right now there is no substitute for the dollar," the Prime Minister said in an interview to CNN.

    Responding to questions about the economic crisis in the United States, the Prime Minister said: "There is a temporary setback and temporary questioning, about relevance of the American model, but I have seen these things much before."

    Singh said even the Chinese, who holds 2.5 trillion dollars in reserve assets, have not disposed off even a fraction of them.

    "That is a measure of the confidence that the world has in the dollar. There are problems. There is the confidence problem, which can be very destabilizing," he said.

    "My own feeling is that the world has not entered an era of irreversible shift in the economic strength of the United States," he added.
     
  5. jakojako777

    jakojako777 Senior Member Senior Member

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    What nonsense article!
    USA probably have explained to India what they should say in public ! But let us not forget that India's words are different then India's acts !
    Just recently India has bought HUGE amount of gold !!
    Russia China and many others are doing the same just more discretely...
    So when it comes to savings there is alternative - GOLD !

    This article just aims to slow inevitable fall of the dollar that if panic starts can fall like brick and trigger USA hyperinflation!

    There is NO recovery in USA it is just trillions of dollars printed bubble that will explode in their face some day and destroy savings of many naive people!

    BUY GOLD people, dump the worthless dollar before it is to late !
     
  6. hit&run

    hit&run Elite Member Elite Member

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    What a nonsense notion,



    Can you explain us about this allegation?

    So rest of the things Our PM said on that interview where all told by US?

    Care to explain with proofs or be mild and little skeptical to your beliefs. That will help discussion.
     
  7. jakojako777

    jakojako777 Senior Member Senior Member

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    I'm sorry if I sounded rude- That was more to avoid long explanations and put accent on how India on one hand buys huge quantity of gold and on other tries to convince people that everything is OK with USA.
    Perhaps just to calm the game after buying so much gold or simply to give (verbal ) support to dollar that costs nothing and do favor that USA might appreciate. -(or both)
    But by doing that there is trap in preparation for small savings if inflation of dollar skyrockets (like in 1st USA depression) people will loose everything they have over the night.
    I used to live through hyper inflation and I know what is all about !
    Loaf of bred costs 1 million!

    What proofs do you need? Every day rising price of gold? USA hiding true number of unemployed (by some estimates close to 20% and rising)
    Dollar loosing value, USA huge deficit pumped up by huge war expenses
    (expenses projected to make growth of USA defense budget by 6% every year to over 600billions for next year) etc.......

    Correct me if I'm wrong -
    I just do not see any proof of USA (jobless) recovery.All "proves" of USA recovery are based on some numbers from stock market or GDP growth and all that is based on (probably trillions) of printed dollars that create new MEGA bubble.

    Nobody really knows how much money Fed has printed and how much toxic assets they still have be cause their operations are controlled by nobody!
    Youtube is full of video of some very prominent economists who are warning now for quite some time the worthlessness of the dollar be cause of endless printing.Internet independent news also!
    All big capitals have migrated from USA to Asia or have shares linked to Asian firms in USA!


    USA( not like India or China ) is country without industrial base any longer ...
    And financial sector leads the game now!
    But they are root of the problem not solution!
    USA industrial base apart from military and few other sectors is practically non existent cause transferred to 3rd world countries (for finding profits). The bank-sters who brought collapse of Wall Street casino are back in the game stimulated by USA administration to restart the game!
    Bubble that replaces bubble, that replaces bubble etc.....
    But this time bubble is to big....

    Even if my comment might look to anybody like " nonsense notion" I have seen or read hundreds of intelligent people of whom many are economist and think
    basically the same about the situation.

    There is no proof for USA entering depression just indicators and some experts say that it can be much worse than one before the 2nd world war.
    For me that is more than enough and MUCH more credible than declaration of any politician!
     
  8. sob

    sob Moderator Moderator

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    Jakojako777,

    The 200 Tons of gold that India bought is not even 10% of the foreign exchange reserve of the country. This was a special case where India bought the gold from IMF as they needed to have liquid money to lend more to poorer countries in Africa.

    Moreover due to the limited quantity of Gold available it will never be the preffered alternative. The fact that all the countries including China are buying Dollar Bonds is an indication to the intrinsic strength of the currency.

    Only the Euro can come up as an alternative provided that the EU gets it's act together.
     
  9. jakojako777

    jakojako777 Senior Member Senior Member

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  10. jakojako777

    jakojako777 Senior Member Senior Member

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    I'm sorry but I don't agree and to make long conversation short let us say that
    I belong to the people who are convinced that dollar will collapse sooner or later
    and that only protection is GOLD. All the rest is just illusion and speculation...
    and manipulation of badly informed people...............
     
  11. jakojako777

    jakojako777 Senior Member Senior Member

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    Well that tells me only that India is NOT poor country
    And I'm happy for you! :)
    It is good that you have so much gold !

    But that still is not proof that you are right or me wrong...............:viannen_10:
     
  12. sob

    sob Moderator Moderator

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    Reply to Jakojako

    Sir just to put the things in perspective and to show that India did not buy Gold to hedge it's bets. It was a political deal to show to the IMF and other countries the financial muscle of India and also that India was there to support the IMF.

    UPDATE 2-IMF sells 200 tonnes of gold to India central bank | Markets | Bonds News | Reuters
     
  13. sob

    sob Moderator Moderator

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    Dollar at record low

    $US falls to 14-year low against yen

    $US falls to 14-year low against yen
     
  14. sob

    sob Moderator Moderator

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    Despite all the experts predicting the doomsday of the US Dollar, china has indicated that they will stick to the dollar. They see the US Dollar falling in the short term but they are rooting for a stronger Dollar to bring the Global economy back in Pink health.

    China hints sticking to dollar despite worries

     
  15. ppgj

    ppgj Senior Member Senior Member

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    china has cornered itself. it is in its own interest to hold the dollar at a respectable value. even if the dollar dives, they will buy and arrest the slide. lest their exports will suffer hugely (remember US is their major market) and the debt they own will suffer. this will have a huge impact on the chinese economy.
    also they have to keep US on the right side inspite of being a creditor lest US dishonours the debt in the future.
    US has a major tool to play with china.
     
  16. jakojako777

    jakojako777 Senior Member Senior Member

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    My new argument is that GOLD is ABOVE 1200$ already and keeps rising EVERY DAY!
    Plenty of economist have predictions for rise up to 2000$ some even higher for 2010!
    And while I'm at it I read your article and it just doesn't make much sense

    WHY would India buy gold if they don't expect the important rise in value of gold to the dollar?
    200 tons is huge amount of dollars!
    Who cares for IMF official reasons ("liquid money" as you call it ) they are USA bank institution and represent world bankers and their manipulation of the gold prices on world market and not some stupid reason that they care about some poor African country ! Nonsense!
    That is story for children ! I'm to old to accept such nonsense!

    I have impression that you have red some article and than you "explain" to
    me with exactly same words what you "think"
    And you think exactly what they've told you in that article to think.....

    I read myself you know and I read rubbish articles often.
    The truth behind those articles is that they serve only to manipulate
    peoples opinion and turn their eyes from TRUE reasons (where the money is) !

    Dollar is collapsing and ALL independent sources are announcing that for quite some time !

    So I advise you strongly to change the newspapers you read if you don't want to loose contact with reality when it comes to inflation of dollar......
    If you have any dollar savings you better change it in something else or you'll regret that.........


    I'm not economist but I'm not stupid either when it comes to money they will never say truth in times of crisis be cause they can loose plenty of money
    Yet despite their (IMF USA gov. and such ) propaganda central banks of many countries are buying GOLD!
    And ordinary people like me ALSO!

    This buying of gold by India was in my opinion for one reason only !
    India just like many others Russia China (even Bangladesh!) buy gold to protect their reserves from COLLAPSING dollar!
    I'm sure that India will buy more just like Russia and China so we should think with our heads not what they tell us in newspapers
     
  17. jakojako777

    jakojako777 Senior Member Senior Member

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    BUT OF COURSE!
    They must defend dollars be cause they still have so many of them!

    The only problem is that what they say is NOT TRUTH at all and they know it!


    Bat they just can't say "people dollar is CRAP get rid of it" be cause their dollar savings will loose value over night if panic starts and everybody starts massively to buy gold! But that will happen anyway next year!

    If anybody wants to make bets about it just let me know...:twizt:




    ...................................
     
  18. sob

    sob Moderator Moderator

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    Jakojako777,

    you may have reservations about the strength of the Dollar. also you will find people with contrarian views .

    Regarding shifting to Gold the main obstacle is that there is not enough Gold to cover the currencies of the world. you can begin to realise the problem that if India bought 200 tons of gold and that is not even 10% of her Foreign reserves, out of a total of about 285 Billion US $, just imagine how much gold China will have to buy with a for a Forex Reserve of 2.3 Trillion US $, another Trillion Dollars for Japan, 0.5 Trillion Dollars for Taiwan.

    My friend the list is very long and exhaustive. We simply do not have enough physical Gold to cover the Global Forex Reserve.

    Please go over the statement made by a senior Chinese Govt. official which I have posted today.
    Also please note one thing about the price of Gold. Gold prices are quoted in US Dollars and that any dip in the value of the Dollar will increase the price of the Gold, otherwise the seller will end up with lesser money is his/her own currency. If the US dollar starts rising tomorrow, the Gold prices will start dipping again. Though let me be frank the corelation is not a linear corelation. There are other factors also involved.
     
  19. jakojako777

    jakojako777 Senior Member Senior Member

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    Do me a favor please and don't call me "sir" ...I'm civilian and have no habit of those things.....
    I didn't come to this forum to play officer but for fun...thanks in advance

    Now comment
    The only countries that would directly support IMF and World Bank are EU and USA
    India doesn't belong to that special club (world of G7 (the richest countries)) and has no reason to support USA or EU financial institutions - bankers unless asked by them as favor to do so....
     
  20. jakojako777

    jakojako777 Senior Member Senior Member

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  21. sob

    sob Moderator Moderator

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    You have your own opinion and I have my own opinion on this topic.

    I shall stand by my point that the Dollar is not going to fall and only time will decide the outcome of the Dollar and the world currency.
     

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