Iniciado por las cosas a su cauce

Russian prime minister Vladimir Putin calls for end of dollar stranglehold

"The one reserve currency has become a danger to the world economy: that is now obvious to everybody," he said in a speech at the World Economic Forum.

It is the first time that a Russian leader has set foot in the sanctum sanctorum of global capitalism at Davos.

Mr Putin said the leading powers should ensure an "irreversible" move towards a system of multiple reserve currencies, questioning the "reliability" of the US dollar as a safe store of value. "The pride of Wall Street investment banks don't exist any more," he said.

For all his bluster, Mr Putin's bargaining power is weakening by the day. Russia's foreign reserves have fallen by 34pc since August to $396bn (£277bn) after months of capital flight and the collapse in the price of Urals crude oil to $45 a barrel. The rouble also fell to a record low yesterday after sliding for weeks in a controlled devaluation.

Mr Putin said: "We are witnessing a truly global crisis. The speed of developments beats every record, and the strategic difference from the Great Depression is that under globalisation this touches everyone. This has multiplied the destructive force. It looks exactly like the perfect storm."

The Soviet Union avoided depression in the 1930s due to its totally closed autarkic system, although the regime inflicted other terrible hardships.

However, Mr Putin's own government in Russia is facing mass protest as unemployment surges and austerity measures start to bite.

The Kremlin expects the Russian economy to contract by 0.2pc this year. Expecting a deep global downturn, it has redrafted its budget plans based on oil prices at $41 this year, entailing drastic cuts in public spending.

Russian prime minister Vladimir Putin calls for end of dollar stranglehold - Telegraph

Saludos...

Comentario de Cárpatos al respecto: Putin pide que se acabe con el dominio del Dólar ya que considera que es un peligro para la economía global. Tal como hemos ya visto en los bonos norteamericanos, ¿se imaginan a China que es el mayor comprador de deuda de EEUU no comprando, dificultando los plenes de estímulo y vendiendo lo que tiene comprando deuda en Euros, cómo le afectaría a la cotización del Dólar?

How Gold Links U.S. Treasuries and the Dollar




US Dollar & Treasuries. The emergence of last week's unsual direct relation between the dollar and gold provided a valuable signal to the validity of the rally in the precious metal. It could also be explained by the rise in bond yields (fall in prices). Last week witnessed a rise in bond yields that was accompanied by a not-so smooth strengthening in the value of the dollar. Despite the dollar's leap to 23-year highs vs GBP, the currency made more modest gains vs the euro while nearing 14-year lows against the yen.


The dollar's gains proved sketchy at best as the rise in bond yields emerged from supply concerns (excessive borrowing) rather than improved economic data. Yields on 10-year treasuries hit 6-week highs as the Obama Administration is expected to step up the nations borrowing to a new record high, taking the fiscal deficit to as high as $1.4 trillion or (9.5%-9.8% of GDP). This week, auctions of 2-year notes, 10-year notes and 20-year TIPS will raise $78 billion. As the dollar is unable to fully respond to rising bond yields resulting from supply worries, gold prices take over the mantle of safety.

Gold has comfortably held above the $900 level as the unusual decoupling with the euro (and unusual coupling with USD) continues due to the metals improved luster resulting from widespread global economic gloom and ultra low global interest rates. As the price of money (interest rates) is held down by central banks, the price of its competitor (gold) pushes higher on the lack of yield reward in monetary alternatives, excess printing by Fed, BoE & ECB as well as the absence financial market shocks (which have proven negative for risk appetite as well as gold).

My Friday outlook for $900 gold was especially highlighted by the notion that gold remained lower in yen terms than in terms of USD, GBP or EUR, thus, more likely to lure Japanese investors into lifting the metal towards the YEN 82,000, which is technical resistance. As this ensues, retail investors worldwide begin to chase the headline-grabbing trend (+$900) and drive the metal further up. While having breached well above its 200-day moving average against both the euro and the dollar, gold remains 11% lower than its 200-day MA in yen terms.

Reports of gold shortages in popular gold shopping places such as Dubai have are also starting to provide the real demand element to the rise in spot price of gold. Despite golld's breach above the psychological level of $900, The $920 trend line resistance remains the more essential target to break. Tuesday's release of the Germany's January IFO survey on business sentiment may well be teh catalyst for further gains in GLD and EUR in the event that both the expectations and current assessment indicators meet or beat forecasts.

For more on the Gold/USD relationship, visit Chapter 1 of my book "Currency Trading & Intermarket Analysis".

Wednesday's FOMC decision will no longer carry the usual suspense associated with the size of the rate cut after the FOMC clarified it will keep rates near zero for some time. Instead, the quantity of bonds purchased will be the new focus as the Fed implements the Term Asset-Backed Securities Loan facility, which case Treasuries may stabilize, yields weaken and the dollar ease lower.

Euro has a firm grip above the $1.29 figure after last week's successful stabilization at the $1.2760 low kept bears at bay despite the latest S&P downgrade of a Eurozone member. Tuesdays IFO survey will be mulled for its components as both the current conditions and expectations index will have to show declines in order for EURUSD to fall markedly .

EURUSD is unlikely to repeat last weeks wobbly tone especially ahead of the zero-bound FOMC. Trend line resistance remains firm at $1.3250, followed by the 50-day MA of $1.3320. EURGBPs 6-day rally is being reversed amid a partial pick-up in risk appetite. 0.9275 is seen as a temporary support that could be broken only in the event of accumulated buying in global equities.

GBPUSD made its obligatory bounce from the latest 23-year low of $1.35, but gains are increasingly capped at $1.3980. The main drivers of any sterling rebound are seen as technical buying, overall USD selling on Fed credit easing and the resulting bounce in risk appetite. Subsequent gains could emerge towards $1.4070.

Rest of analysis available to Live CMC Markets Clients

China: A New Wave Of Violent Riots
Both the New York Times and Al Jazeera say the military has been told to assume battle positions

Reuters AlertNet - FACTBOX-Global financial crisis sparks unrest
FACTBOX-Global financial crisis sparks unrest
02 Feb 2009 12:17:59 GMT
Source: Reuters
Feb 2 (Reuters) - Here are some details of protests and developments as a result of the global financial crisis:

* FRANCE

-- Hundreds of thousands of strikers marched in French cities on Thursday to demand pay rises and job protection. Some protesters clashed with police, but no major violence was reported.

-- The one-day strike failed to paralyse the country and support from private sector workers appeared limited. Labour leaders hailed the action, which marked the first time France's eight union federations had joined forces against the government since President Nicolas Sarkozy took office in 2007.

* RUSSIA

-- Thousands of opposition supporters rallied in Moscow and the far east port of Vladivostok on Saturday in a national day of protests over hardships caused by the financial crisis. On Sunday hundreds of demonstrators in Moscow called for Russia's leaders to resign.

-- Street rallies were held in almost every major city over the weekend. The pro-Kremlin United Russia party also drew thousands to rallies in support of government anti-crisis measures.

-- About 100 protesters were arrested in Vladivostok last month during protests against hikes in second hand car import duties aimed at protecting jobs in the domestic car industry.

* MADAGASCAR

-- More than 100 people were killed in civil unrest in Madagascar last week, according to the U.S. ambassador. Police previously confirmed 44 deaths, with most of those in a store burned during looting when an anti-government protest degenerated into violence.

-- The mayor of Antananarivo, Andry Rajoelina, galvanised popular frustrations to spearhead demonstrations and strikes against President Marc Ravalomanana's government. The violence came amid an oil and minerals exploration boom in Madagascar.

* ICELAND

-- Parties forming a new coalition for the crisis-hit island decided on Sunday its new prime minister will be former Social Affairs Minister Johanna Sigurdardottir.

-- Prime Minister Geir Haarde resigned last week after a series of protests, some of which had turned violent. He was the first leader to fall as a direct result of the credit crunch.

-- The collapse of the country's fast-expanding banks under a weight of debt forced the country to take a $10 billion IMF-led rescue package and sparked widespread anger.

* DAVOS

-- Hundreds of people rallied in Geneva and Davos on Saturday to protest against the World Economic Forum, saying the elite gathered for its annual meeting are not qualified to fix the world's problems.

-- In Geneva, where the WEF has its headquarters, police in riot gear fired teargas and water canon to disperse a crowd.

* BRITAIN

-- Up to 900 contractors at the Sellafield nuclear plant walked off the job on Monday, joining hundreds of other contract workers who have gone on strike in recent days over the use of foreign labourers as recession bites.

-- Thousands of energy workers staged walkouts on Friday, two days after contractors at a refinery owned by France's Total began protests at the award of a construction contract to Italian firm IREM. Unions say it has brought in workers from Italy and Portugal and deprived Britons of work.

* GREECE

-- Greek farmers removed roadblocks last week which caused 11 days of travel chaos across the country as they protested against low prices. They kept their blockade on Bulgaria's border and central Greece.

-- High youth unemployment was a main driver for rioting in Greece in December, initially sparked by the police shooting of a youth in an Athens neighbourhood. The protests forced a government reshuffle.

* GUADELOUPE

-- France sent a minister to the Caribbean island on Sunday for talks aimed at ending a 13-day general strike over pay and prices that has paralysed the French territory.

-- An alliance of 47 unions and local bodies launched their protest on Jan. 20 over the cost of living. They have drawn up a list of 146 demands including a 200 euro ($257) increase in the minimum salary, a freeze on rents and a cut in taxes and food prices. Island authorities have rejected the demands.

* BULGARIA

-- Hundreds of Bulgarians demanded economic and social reforms in the face of a global slowdown in anti-government rallies last month, calling on the Socialist-led government to act or step down.

-- Earlier in January, hundreds of protesters clashed with police, smashed windows and damaged cars in Sofia when a rally against corruption and slow reforms in the face of the economic crisis turned into a riot.

* LATVIA

-- A 10,000-strong protest in Latvia on Jan. 16 descended into a riot, with protesters trying to storm parliament before going on the rampage. Government steps to cut wages, as part of an austerity plan to win international aid, have angered people.

* LITHUANIA

-- Also on Jan. 16, police fired teargas to disperse demonstrators who pelted parliament with stones in protest at government cuts in social spending to offset an economic slowdown. Police said 80 people were detained and 20 injured.

-- Prime Minister Andrius Kubilius said the violence would not stop an austerity plan launched after a slide in output and revenues.

TODD HARRISON
How realistic is a North American currency?
Commentary: Uniting U.S., Canada, Mexico money could result from crisis


"World, hold on. Instead of messing with our future, open up inside." -- Bob Sinclair





NEW YORK (MarketWatch) -- Thomas Jefferson once said: "When you reach the end of your rope, tie a knot in it and hang on." As the global financial system pushes on a string, investors are desperately trying to hold tight.
The New World Order is upon us, full of hope, promise and a fair amount of fear. In our recent discussion regarding the direction of our country, we noted the risks of catering to conventional wisdom and the implications for the U.S. dollar. See MarketWatch column on New World Order.

The Minyanville mantra is to provide financial news you need to know before you know you need it. That's a fine line to walk, as foresight often flies in the face of mainstream acceptance.

In 2006, it seemed counterintuitive to forecast a "prolonged socioeconomic malaise entirely more depressing than a recession." See Minyanville column.
For years, the notion of an "invisible hand" was conspiracy theory until we learned that the Working Group on Financial Markets was a central policy tool. See Minyanville column.

And now, as we gaze across our historically significant horizon, we must open our minds to thoughts and ideas that may seem foreign to folks conditioned by the past and stunned by the present.


Currency crossroads


As governments take on more risk -- as they price assets on behalf of the market and transfer debt from private to public -- the common denominator, or release valve, becomes the currency.


If our economic condition is allowed to take medicine in the form of debt destruction, the greenback will appreciate, and asset classes as a whole will deflate. If we continue to inject drugs that mask symptoms rather than address the disease, the likelihood of a seismic readjustment increases in kind.

The deflationary forces in the marketplace are pervasive, and the "other side" of our current equation, hyperinflation, may be years away. Given the magnitude, breadth and pace of the global financial epidemic, however, we must explore each side of the twisted ride.

Years ago, the Federal Reserve wrote a "solution paper" regarding the need to combat zero-bound interest rates. The concern was the flight of capital from the U.S. and an option discussed was a two-tiered currency, one for U.S citizens and one for foreigners.

Canadian economist Herbert Grubel first introduced a potential manifestation of this concept in 1999. The North American Currency -- called the "Amero" in select circles -- would effectively comingle the Canadian dollar, U.S. dollar and Mexican peso.

On its face, while difficult to imagine, it makes intuitive sense. The ability to combine Canadian natural resources, American ingenuity and cheap Mexican labor would allow North America to compete better on a global stage.
Experience has taught us, however, that perceived solutions introduced by policy makers and politicians don't always have the desired effect.


Unintended consequences


I've long contended that, much like the Internet prophecy proved true -- but not before the tech crash -- so too would globalization, albeit not without painful-yet-necessary debt destruction.

To get through this, we need to go through this. If we're not allowed to go through it, foreigners will seek alternative avenues. Remember, for holders of dollar-denominated assets, seeds of discontent have been sowing under the surface for years, with the greenback off 30% since 2002.

More likely than not, global leaders will watch how our new administration attempts to tackle the financial crisis before taking drastic steps. They understand that co-dependent risk exists as a ******** of the derivatives that interweave our financial infrastructure. If they could disassociate from our economic ecosystem without inflicting massive damage on themselves, they would have done so long ago.

If forward policy attempts to induce more debt rather than allowing savings and obligations to align, we must respect the potential for a system shock. We may need to let a two-tier currency gain traction if the dollar meaningfully debases from current levels.

If this dynamic plays out -- and I've got no insight that it will -- the global balance of powers would fragment into four primary regions: North America, Europe, Asia and the Middle East. In such a scenario, ramifications would manifest through social unrest and geopolitical conflict.

This particular path isn't something one would wish for, but the cumulative imbalances that steadily built in our finance-based economy must be resolved one way or another. Therein lies the critical crossroads we together face as our wary world attempts to find its way.

Scary? Yes. Probable? Not so much, at least for the time being. Possible? Certainly, although I'll again offer that it could take years before the pieces of this prickly puzzle fall into place.

Effective money management dictates weighing the entire probability spectrum of potential outcomes and factoring them into our decision making process. While the notion of a seismic currency shift may seem obscure, we must respect the possibility long before it becomes front-page news.
For if we've learned anything through the last few years, proactive thought provocation is a necessary precursor to effective preparedness.