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On Sunday, Guo Shuqing, a top Chinese Banker, suggested the US and World Bank sell bonds denominated in Chinese yuan. “I think the U.S. government and the World Bank can consider the possibility of issuing renminbi bonds in the Hong Kong market and the Shanghai market,” he said. The clamor by China for a diversification […]
Common wisdom holds that depressions are inherently deflationary. The United States in the 1930’s. Japan in the 1990’s and 2000’s. Combine a depression with other deflationary factors going today in the US – demographics, deleveraging, falling asset prices, even productivity – and you’ve got some serious deflationary headwinds. (As a side note – I’ve warmed […]
If you have the majority of your savings in US dollars, this may be the most important insight you ever hear from Jim Rogers. In an interview with Bloomberg from this morning, Rogers said: “We’re going to have a currency crisis, probably this fall or the fall of 2010. It’s been building up for a […]
Is ANYONE going to defend their currency? Chuck Butler writes in the Daily Pfennig that Singapore is now the latest to throw in the towel on theirs: A couple of weeks ago, when Chris was writing the Pfennig for me, he wrote about Singapore, and how the Monetary Authority of Singapore (MAS) had indicated it […]
The New York Times reports that the Chinese government was an aggressive seller of foreign debt – including US Treasuries – in January and February, before reversing course in March. All in all, China’s foreign reserve growth in Q1 was its slowest in eight years – indicating that China may be losing it’s appetite for […]
Are the dollar’s days numbered as the world’s reserve currency? Not if Congresswoman Michele Bachmann has her way. Earlier this week, Rep. Bachmann swung to the defense of the US Dollar, on the heels of China asking for a new world reserve currency. From Rep. Bachmann’s website: In response to suggestions by China, Russia, and […]
In an “open letter” on the official website of The People’s Bank of China – which I didn’t know existed until today – Chinese central banker Zhou Xiaochuan called for a new world reserve currency. The outbreak of the current crisis and its spillover in the world have confronted us with a long-existing but still unanswered […]
Bernanke Fires Up the Printing Presses Earlier this week, Ben Bernanke announced the US Federal Reserve will buy up to $300 billion of US long-term Treasury securities over the next 3 months. Where will the Fed get that money? It will essentially create it out of thin air – also known as “printing money.” Surprisingly, […]
Grains and Softs Showing Some Signs With the stock market showing some signs of life this week, many of the agricultural markets followed suit. Corn put in a particularly strong week, driven by reports of strong export sales of the past couple of weeks, as well as strong equity and oil prices. Seasonally this is […]
Why We’re Shorting the Yen Last Monday, we shorted the Japanese Yen. Longtime readers may be wondering what we’re smoking, as we’ve been playing the long side of the Yen (with relative success) on and off over the past couple of years. My thinking is that the carry trade has been completely unwound, and fundamentals […]
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