World economy talk

[jeDi13]

this is good news for my EUR maybe it's time to dispose it after a few more days

[tidus1203]

IMO you can hold on to it (the EUR that is)... I am convince na game changer na ito and the USD rally has reversed and we will now see a USD downtrend...

[tidus1203]

Here is chart of the Dow. The circle was the November low. The horizontal line is that resistance which indicates the November low. Notice how yesterdays price hit it like a ceiling and bounce back down? Nauntog sa kisame! Chart courtesy of my charting platform AMIBROKER.

[uls]

aray

hehe

wala naman kasi solid na good news

puro spin, puro PR, puro CEOs talking up their stock

that can rally the market for a few days

but people will realize things are still bad

even getting worse

[jeDi13]

so basically dude, what you're saying is ma-pprolong pa 'tong upward trend sa chart mo? gusto ko nga paabutin ng 1.6 yung EUR/USD exchange rate hehe. parang malapit na yun, within reach na.

pero akala ko people are leaning towards USD kasi sabi niyo it's a safe haven.

[uls]

the USD value went up in 2H 2008 coz of safe haven play

(or we can say it was massive short covering coz everyone was shorting the USD in 2007 all the way to 1H 2008)

until the Fed announced it will buy treasuries

kaya nga game changer

things are always fluid

nothing's permanent dude

If the ECB decides to do what the UK, Japan, US is doing, then the Euro will crash




kaya the smart money (like John Paulson) is now going into precious metals

they are now betting against governments

(they previously bet against the real estate boom, then they bet against the banks)

the governments are all debasing their currencies

now that the dollar is weakening, Europe and Japan will not just sit there and do nothing

they will drive their currencies lower

you do not want a strong currency in a crisis

you want a weak currency para mura ang exports mo

competitive devaluation

[tidus1203]

1.60, I highly doubt it. Set your target at 1.40 for now then we get there lets re-examine the markets...

It wasn't me who said the USD was a safe heaven. That is what the media was preaching and the main stream gibberish.

[uls]

this feels like 1H 2008

money is flowing back into commodities to hedge against falling USD

5 day CRB index

[tidus1203]

Yep. I am especially bullish on Silver. Silver is vastly undervalued in relation to Gold. I see Silver at $20 easily. Gold should be past $1000 easily. Oil I am not so bullish because there is still demand problem, while precious metals (not industrial metals) will perform remarkably.

[uls]

http://www.reuters.com/article/usDol...090320?sp=true

HONG KONG, March 20 (Reuters) - The U.S. dollar edged higher on Friday but still headed for its biggest weekly fall in 24 years on investor fears that it will lose its status as the world's reserve currency, while oil prices ceded ground after a recent rally.

futher down the article:

"This is a historic moment, the start of debasement of the world's reserve currency, and it feels to many participants that in the grand sweep of history we are witnessing the end of 'Rome' on the Potomac," said Alan Ruskin, a RBS strategist in Greenwich.

"U.S. dollars will be flooding the world as the printing presses work overtime," said Stephen Koukoulas, a strategist at TD Securities in London in a note to clients.

"Bye bye U.S. dollar. Sell sell U.S. dollar!"

^^^

hey sounds like u Tidus

[tidus1203]

Well yeah I know at some point they will have to run the printing presses because thats all they can do, really... And when they do that it damages their credibility and eventually their reserve currency status is in question. Now I hope China starts making their currency free floating and then we might see a huge transformation in the world currency markets.

[jeDi13]

what would be the next world's reserve currency then? and what currency can i load then make profit while riding the wave (wave of XXX currency vs. USD)?

[tidus1203]

Ako CNY and Gold. But that's me. Pareho mahirap maghanap ng dalawa. Normally for CNY I go via the black market (under the table deals without documents, kasi normally FX deals should be documented and known by the central bank). Meron din mga exporters sa China, yun I sell them my USD or PHP then they give me their CNY earnings from export. Pwede din open a bank account sa Hong Kong then ask the bank to convert your base currency (normally USD, EUR or JPY) into CNY.

But here is the risk to my belief. As long as China does not make their currency fully convertible and free floating it will not become the world's reserve currency. Although economically I am convinced it will be the next super power.

[uls]

this may sound ironic since we are talking about the USD like it's toilet paper

but for now, there's really no other currency that can replace the USD as the world's reserve currency

the US is still the biggest economy in the world

it has the deepest and most mature capital markets

and the world's most powerful military

that's for now...

things change so fast these days

[tidus1203]

Yep. But we were discussing the prospects much further out. You don't prepare when it happens, you prepare before it happens. Again I could be wrong, but that's life. You want to make money in life, you gotta speculate and take risks and try to foresee the future...

As for military, your military is only as good as your economy. You think without China and Japan lending the US the US could continue their campaign in Iraq and Afghanistan?

[uls]

yes looking further out, the USD's status is questionable

the world is pissed off at how the US screwing everyone

trade surplus countries invested its USD savings in USD assets

but the US is debasing the USD

Role and value of U.S. dollar set to fall: Asia think tanks
http://www.reuters.com/article/ousiv...52I1OM20090319

TOKYO (Reuters) - The role of the U.S. dollar as the key global currency will decline after the financial crisis, and its value may also weaken due to America's current account deficit, officials at some of Asia's top think tanks said.

But Asia, which is heavily invested in U.S. assets, hopes any decline in the dollar will be gradual to avoid further shocks to financial systems, the officials said on Thursday.

"The dollar's role will gradually be shifted," Zhang Yunling, director of Institute of Asian and Pacific Studies at Chinese Academy of Social Sciences, told a news conference in Tokyo after a meeting of Asian research groups.

"China hopes to have a stable and gradual transition rather than a radical revolution," he added.

Chalongphob Sussangkarn, a former Thai finance minister and now president of Thailand Development Research Institute, also expressed worries about any sharp fall in the dollar.

"The U.S. deficit is so huge. This is why all countries, particularly East Asia, are concerned because we hold a lot of these assets. What happens if the U.S. dollar falls 40 percent? Many central bankers will be losing huge amounts of money."

-----------

U.N. panel says world should ditch dollar
http://www.reuters.com/article/summi...52H2CY20090318

LUXEMBOURG (Reuters) - A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar.

Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.

Persaud, chairman of consultants Intelligence Capital and a former currency chief at JPMorgan, said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform.

"It is a good moment to move to a shared reserve currency," he said.

[tidus1203]

Diba I shown the chart yesterday where "nauntog sa kisame" ang presyo. Just like a ball hitting the roof it bounces back down. I guess physics and trading can actually be related

[tidus1203]

More reasons not to like the USD. ONE TRILLION and EIGHT HUNDRED FIFTY BILLION reasons for this year alone...

http://money.cnn.com/2009/03/20/news...ex.htm?cnn=yes

The USG has no other way but to debase their currency so that their debts will be lessen in REAL TERMS. Kawawa yung nagpautang sa kanya, those will be worth less... The USG has already up'd the pace of the printing press, expect it to accelerate further. They might even have to buy more printing press

[uls]

si Tidus kisame ang topic

ako naman sahig

at hagdanan

ang dami na nagsabi tumama na daw sa sahig

last year palang may mga nagsasabi tumama na daw sa sahig

pero hindi pala

hagdanan lang pala

sa huling rally na ito, lalo dumami ang nagsasabi ETO NA ANG TUNAY NA SAHIG!

tingnan natin kung tunay na sahig nga...

o hagdanan lang uli

hehe

[tidus1203]

I fondly remember a game called "Snakes and Ladders". The bulls and the media seem to always confuse what is a ladder and what is a snake. They always land on the snake