Dollar vs Euro

[raja696]

What advantages does usa and britain got in breaking up European union in terms of dollar vs euro. What are the effects if European union disintegrates and how it effects nato super alliance.

Is usa and britain are up to new informal alliances for new union of countries like India to continue there geopolitical influence irrespective of there state of economy.

(All these questions are more hypothetical and sounds conspiracy.)

Is china being stupid and playing rascal as a hand in glove to Usa en queen?

Any one interested and have similar wild questions pls kindly reply even it coincides partly.

 

[anoop_mig25]

What advantages does usa and britain got in breaking up European union in terms of dollar vs euro. What are the effects if European union disintegrates and how it effects nato super alliance.

Is usa and britain are up to new informal alliances for new union of countries like India to continue there geopolitical influence irrespective of there state of economy.

(All these questions are more hypothetical and sounds conspiracy.)

Is china being stupid and playing rascal as a hand in glove to Usa en queen?

Any one interested and have similar wild questions pls kindly reply even it coincides partly.

First UK was/is junior partner sine long times.they ignored euro pen countries and went ahead with USA to bomb IRAQ and throw out sadam hussian.

On face value USA wanted UK to remain part of EUROPE so that it can influence decision making in Europe through britian

Even now new UK leadership is trying to find some clause/points which will eventually nully-fily referendum result or they would sign some type of deal where Britain is partially within Europe just like Norway

If Europe disintegrates with more countries leaving then it strengthen Russia in east europe/central asian countries which america doesn't wants

whether USA wants Indian and other Asian countries (to take on china) in some kind of formal/in-formal alliance that would be initiated and in between USA and Asian countries .

I do not think UK would have any role in it. At most UK would join post such alliance is formed

 

[pmaitra]

What advantages does usa and britain got in breaking up European union in terms of dollar vs euro. What are the effects if European union disintegrates and how it effects nato super alliance.

Is usa and britain are up to new informal alliances for new union of countries like India to continue there geopolitical influence irrespective of there state of economy.

(All these questions are more hypothetical and sounds conspiracy.)

Is china being stupid and playing rascal as a hand in glove to Usa en queen?

Any one interested and have similar wild questions pls kindly reply even it coincides partly.

I like the response given by @anoop_mig25, but I will add a few points from the Dollar vs Euro perspective.

The US Dollar is the international currency of trade.

When two countries trade, they trade in US Dollars. So, their local currency has to be first converted to Dollars, and then the Dollars to the local currency of the other country. For example, sending money via SWIFT, there is a transaction fee that charged. All these transactions add a lot of money to the US Federal Reserve as an additional income.

When countries stop using the Dollar, and use barter, like the USSR did with many countries, or use gold, like India used gold to buy oil from Iran, the US loses out on the transaction fees. That is why they try to oppose such transactions. One way to oppose such transactions is to force large insurance companies from denying insurance to articles being transported by ships in a trade deal not involving Dollars.

Now comes the Euro. The Euro became the alternative to the Dollar, and as more and more countries began using the Euro, the US began losing out on the transaction fees. It was impossible for the US to invade Europe, but when Iraq switched from Dollars to Euro, being a oil trading nation, the US attached Iraq.

Read the part under "The Petro Dollar vs the Petro Euro Argument" here: http://www.monetary.org/was-the-iraqi-shift-to-euro-currency-to-real-reason-for-war/2010/12

Now, comes in BRICS bank. BRICS has come up with the BRICS bank which has the potential of becoming a challenger to the WMF and WB, and the SDR might as well become the next international currency of trade. It might not be a coincidence that there is political trouble in Brazil and South Africa. The US does not have so much of a stranglehold on Russia, PRC, and perhaps it has some stranglehold over India. With NGOs such as Ford Foundation, etc.,, coming under pressure, the influence might be limited.

Coming back to the point of Dollar vs Euro, it is in the US interest to allow the Euro to collapse. The Greek Economic Crisis was a boon for the US Dollar, as the Germans, who have considerable influence over the Euro, would be forced to either print lots of Euros, thus devaluing it, and in exchange, accept IOUs from other countries with no guarantee of actually being redeemed.

PRC owns a lot of US Bonds. It is not in the interest to have the Dollar collapse. They would like to get rid of their US Bonds before any major collapse happens, however, if they dump all their US Bonds, the US Dollar will certainly collapse. That is why, they are dumping US bonds at a moderate rate, but they are dumping it nonetheless. Russia is also doing something similar. For every Dollar they earn in international trade, they are quickly buying gold with it and stashing them in their vaults, but not dumping all their US bond yet. Thus, Russia can at any time switch to a gold backed currency, if the Dollar collapses. So, PRC is not playing stupid. They are being very smart and taking measured steps towards offloading US bonds without precipitating a global collapse of the US Dollar.

 

[Abhijat]

Sir , what about controlling peripheries to control Heartland ? . As U.K , India and Japan seems to be right candidate , by their geographical pos'n , for such alliance .

Sent from my SM-A700FD using Tapatalk

 

[Razor]

Sir , what about controlling peripheries to control Heartland ? . As U.K , India and Japan seems to be right candidate , by their geographical pos'n , for such alliance .

Sent from my SM-A700FD using Tapatalk

Umm, that's exacty what the US is doing, right??

 

[Abhijat]

Umm, that's exacty what the US is doing, right??

Would we be in loss in such arrangement ? Or would it be boon for us ?

Sent from my SM-A700FD using Tapatalk

 

[Razor]

Would we be in loss in such arrangement ? Or would it be boon for us ?

Sent from my SM-A700FD using Tapatalk

Depends on a lot of factors, esp. how Indian leadership handles the entire situation, so difficult to predict just like that.

You can try reading Spykman's Rimland theory and also on containment strategies of the USA for a start.

 

[anoop_mig25]

I like the response given by @anoop_mig25, but I will add a few points from the Dollar vs Euro perspective.

The US Dollar is the international currency of trade.

When two countries trade, they trade in US Dollars. So, their local currency has to be first converted to Dollars, and then the Dollars to the local currency of the other country. For example, sending money via SWIFT, there is a transaction fee that charged. All these transactions add a lot of money to the US Federal Reserve as an additional income.

When countries stop using the Dollar, and use barter, like the USSR did with many countries, or use gold, like India used gold to buy oil from Iran, the US loses out on the transaction fees. That is why they try to oppose such transactions. One way to oppose such transactions is to force large insurance companies from denying insurance to articles being transported by ships in a trade deal not involving Dollars.

Now comes the Euro. The Euro became the alternative to the Dollar, and as more and more countries began using the Euro, the US began losing out on the transaction fees. It was impossible for the US to invade Europe, but when Iraq switched from Dollars to Euro, being a oil trading nation, the US attached Iraq.

Read the part under "The Petro Dollar vs the Petro Euro Argument" here: http://www.monetary.org/was-the-iraqi-shift-to-euro-currency-to-real-reason-for-war/2010/12

Now, comes in BRICS bank. BRICS has come up with the BRICS bank which has the potential of becoming a challenger to the WMF and WB, and the SDR might as well become the next international currency of trade. It might not be a coincidence that there is political trouble in Brazil and South Africa. The US does not have so much of a stranglehold on Russia, PRC, and perhaps it has some stranglehold over India. With NGOs such as Ford Foundation, etc.,, coming under pressure, the influence might be limited.

Coming back to the point of Dollar vs Euro, it is in the US interest to allow the Euro to collapse. The Greek Economic Crisis was a boon for the US Dollar, as the Germans, who have considerable influence over the Euro, would be forced to either print lots of Euros, thus devaluing it, and in exchange, accept IOUs from other countries with no guarantee of actually being redeemed.

PRC owns a lot of US Bonds. It is not in the interest to have the Dollar collapse. They would like to get rid of their US Bonds before any major collapse happens, however, if they dump all their US Bonds, the US Dollar will certainly collapse. That is why, they are dumping US bonds at a moderate rate, but they are dumping it nonetheless. Russia is also doing something similar. For every Dollar they earn in international trade, they are quickly buying gold with it and stashing them in their vaults, but not dumping all their US bond yet. Thus, Russia can at any time switch to a gold backed currency, if the Dollar collapses. So, PRC is not playing stupid. They are being very smart and taking measured steps towards offloading US bonds without precipitating a global collapse of the US Dollar.

both russia and china are anticipating collapse of dollar led word trade in middle-to-long term.they are also anticipating recession. donot know when but are sure and hence both are buying gold

I donot know know whether indian leadership is doing same or not.hope they are doing it.

One more point i would like to add is USA wants EUROPE but doesnt wants euro.

And BRICS cannot became ans to WB as CHINA is not interested.they would be promoting AIIB more compare to BRICS.China has started lots of think .they have started gold treading and also i think they put there system CIPS in ans to SWIFT.

So if and and when dollar led word trade becomes extinct china wants its system to be in place rather then begin vacuum and there begin fight for begin no 1

 

[busesaway]

1) The European Union was created by the Americans themselves indirectly through the Marshall Plan as a way of stopping yet another way in the continent. The policy of integration furthers progress towards this goal.

2) The IMF had already admitted the Eurozone was risky due to the varying policies of the respective national governments.

3) The United States' biggest allies are the Anglosaxons and Continental Western Europe. The idea that the US doesn't want a strong EU is plausible, but only if the US is also against a strong whatever; considering the rise of China, I don't think that the US wants a weak EU.

4) The UK has a lot to lose. It's got privileged access to influence foreign policy through its special relationship with the US, the Commonwealth, and its place at the UN Security Council. Since the UK is a far more trustworthy friend that Europe, I think it's in the US's interests to see a strong UK.

 

[airtel]

Why The RBI Should Behave Like a True Indian & Buy More Gold For Its Coffers
R Jagannathan - April 18, 2016, 12:25 pm

Shares 331

Snapshot
Gold is the only currency that has held its own in an uncertain world. And the world is nothing if not uncertain right now.

The Reserve Bank should behave like a good Indian and buy gold, just like the Chinese and many other central banks in the world do.



In November 2009, the Indian government took one of its wisest decisions: it bought 200 tonnes of gold from the International Monetary Fund (IMF) to shore up its foreign exchange reserves. This gold has given it the best returns on investment, despite the weakness in gold prices over the last couple of years. Those 200 tonnes, bought for around $6.9 billion, are worth nearly $8 billion at current gold prices.

Mint newspaper recently raised a question on whether India should buy more gold, and came up with an inconclusive answer. My answer would be a clear yes. India needs to hold somewhere around 10 percent of its reserves in gold, and it is currently just about 5.5 percent of the total. The time to shore up on gold is when its prices are reasonable, not when the metal is on fire.

Several reasons why.

One, the world is still overloaded on the dollar, and there is no saying when that currency will decline to reflect its true value. Currently, nearly 64 percent of the world’s official foreign exchange reserves are in US dollar, when the US economy’s share of world GDP is just over 23 percent. This lop-sidedness is because the US dollar is considered the only safe haven, at a time when the euro is going through its own turmoil. For a country that has run a current account deficit for as long as one can remember, the strength of the US dollar is largely the result of the TINA factor – there is no alternative to the dollar. The dollar’s current value is not its real value. One cannot predict when it will fall, but it surely will. It cannot defy the laws of economics forever.

Two, India’s over-reliance on holding foreign currency assets (FCAs) in dollar-denominated assets is a clear loser. In 2014-15, the Reserve Bank’s FCAs earned a princely return of just 1.36 percent when the country is borrowing FCAs at more than twice the rate. Contrary to popular assumptions, India’s forex reserves of $360 billion is not money for jam; it is essentially money borrowed from abroad, with the country’s net external debt now at $480 billion (as at the end of December 2015). The country is paying over $11.5-12 billion in interest on this debt – more than twice what it earns on its forex reserves.

This means we (mostly companies and banks) are borrowing at higher rates and the Reserve Bank is reinvesting the dollars received at less than half the borrowing rates. What good can that be doing us? The difference between the rate at which we borrow dollars and the rate at which we invest it is effectively the premium we pay to avoid a run on the rupee. It is a high price to pay and worth reconsidering.

Three, China, which is the world’s largest holder of dollar reserves, is steadily bringing down its reserves, and secretly investing in gold.

According to this CNN report, Chinese gold imports have surged more than 700 percent since 2010 – and much of it is going under the radar and not reported in official reserves. In 2009, China reported holding 1,054 tonnes of official gold; in 2015, this had risen to 1,700 tonnes, but Bloomberg put the figure at twice that level - at over 3,500 tonnes.

On the other hand, China’s official reserves fell from $3.7 trillion in April last year to $3.2 trillion early this year. This means China spent more than half a trillion dollars’ worth of reserves to correct its economic biases – including its over-exposure to the dollar - in less than a year. China buys around 40 percent of the gold produced every year, and it is also the world’s biggest gold miner.

A plain reading of this news suggests that China is trying to diversify away from the US dollar, and it is not alone.

According to this Bloomberg report, “Russia more than tripled its hoard since 2005 and Kazakhstan raised its every month since October 2012.” A report by Profit Confidential notes that central banks have been continuously buying gold since 2012, and, as at the end of 2013, they held 30,500 tonnes of it, about a fifth of all gold ever mined.

The message for the RBI is clear: it should not get squeamish about buying gold again. It should not tie itself up in knots about sending the wrong message to a domestic audience, which it is trying to wean away from gold. Like every good Indian household knows, gold is the only currency that has held its own in an uncertain world. And the world is nothing if not uncertain right now.

The Reserve Bank should behave like a good Indian and buy gold, just like the Chinese and many other central banks in the world do. Buying when gold is in the $1,200-plus range makes more sense than buying later.

http://swarajyamag.com/economy/why-...true-indian-and-buy-more-gold-for-its-coffers

 

[pmaitra]

Why The RBI Should Behave Like a True Indian & Buy More Gold For Its Coffers
R Jagannathan - April 18, 2016, 12:25 pm

Shares 331

Snapshot
Gold is the only currency that has held its own in an uncertain world. And the world is nothing if not uncertain right now.

The Reserve Bank should behave like a good Indian and buy gold, just like the Chinese and many other central banks in the world do.



In November 2009, the Indian government took one of its wisest decisions: it bought 200 tonnes of gold from the International Monetary Fund (IMF) to shore up its foreign exchange reserves. This gold has given it the best returns on investment, despite the weakness in gold prices over the last couple of years. Those 200 tonnes, bought for around $6.9 billion, are worth nearly $8 billion at current gold prices.

Mint newspaper recently raised a question on whether India should buy more gold, and came up with an inconclusive answer. My answer would be a clear yes. India needs to hold somewhere around 10 percent of its reserves in gold, and it is currently just about 5.5 percent of the total. The time to shore up on gold is when its prices are reasonable, not when the metal is on fire.

Several reasons why.

One, the world is still overloaded on the dollar, and there is no saying when that currency will decline to reflect its true value. Currently, nearly 64 percent of the world’s official foreign exchange reserves are in US dollar, when the US economy’s share of world GDP is just over 23 percent. This lop-sidedness is because the US dollar is considered the only safe haven, at a time when the euro is going through its own turmoil. For a country that has run a current account deficit for as long as one can remember, the strength of the US dollar is largely the result of the TINA factor – there is no alternative to the dollar. The dollar’s current value is not its real value. One cannot predict when it will fall, but it surely will. It cannot defy the laws of economics forever.

Two, India’s over-reliance on holding foreign currency assets (FCAs) in dollar-denominated assets is a clear loser. In 2014-15, the Reserve Bank’s FCAs earned a princely return of just 1.36 percent when the country is borrowing FCAs at more than twice the rate. Contrary to popular assumptions, India’s forex reserves of $360 billion is not money for jam; it is essentially money borrowed from abroad, with the country’s net external debt now at $480 billion (as at the end of December 2015). The country is paying over $11.5-12 billion in interest on this debt – more than twice what it earns on its forex reserves.

This means we (mostly companies and banks) are borrowing at higher rates and the Reserve Bank is reinvesting the dollars received at less than half the borrowing rates. What good can that be doing us? The difference between the rate at which we borrow dollars and the rate at which we invest it is effectively the premium we pay to avoid a run on the rupee. It is a high price to pay and worth reconsidering.

Three, China, which is the world’s largest holder of dollar reserves, is steadily bringing down its reserves, and secretly investing in gold.

According to this CNN report, Chinese gold imports have surged more than 700 percent since 2010 – and much of it is going under the radar and not reported in official reserves. In 2009, China reported holding 1,054 tonnes of official gold; in 2015, this had risen to 1,700 tonnes, but Bloomberg put the figure at twice that level - at over 3,500 tonnes.

On the other hand, China’s official reserves fell from $3.7 trillion in April last year to $3.2 trillion early this year. This means China spent more than half a trillion dollars’ worth of reserves to correct its economic biases – including its over-exposure to the dollar - in less than a year. China buys around 40 percent of the gold produced every year, and it is also the world’s biggest gold miner.

A plain reading of this news suggests that China is trying to diversify away from the US dollar, and it is not alone.

According to this Bloomberg report, “Russia more than tripled its hoard since 2005 and Kazakhstan raised its every month since October 2012.” A report by Profit Confidential notes that central banks have been continuously buying gold since 2012, and, as at the end of 2013, they held 30,500 tonnes of it, about a fifth of all gold ever mined.

The message for the RBI is clear: it should not get squeamish about buying gold again. It should not tie itself up in knots about sending the wrong message to a domestic audience, which it is trying to wean away from gold. Like every good Indian household knows, gold is the only currency that has held its own in an uncertain world. And the world is nothing if not uncertain right now.

The Reserve Bank should behave like a good Indian and buy gold, just like the Chinese and many other central banks in the world do. Buying when gold is in the $1,200-plus range makes more sense than buying later.

http://swarajyamag.com/economy/why-...true-indian-and-buy-more-gold-for-its-coffers

Good find. You might find this thread interesting:

Negligence of RBI, or is it criminal culpability?