The bulk of international trade transactions have nothing to do with the U.S. except through the use of the $ to denominate their trade.Approximately 75% of global trade is denominated in the U.S. $ in this way.But the volatility of the U.S. $ has distorted and damaged, this aspect of global trade.Thus has been created an ideal environment for gold to rise as its importance in the changing global monetary system grows again. Read the rest of this entry »
The nation increased its reserves by 454 tons to 1,054 tons through domestic purchases and refining scrap metal, Hu said in an interview with the Xinhua News Agency today. The amount is more than Switzerland’s 1,040 tons, World Gold Council data show, and is worth $31 billion at current prices. Read the rest of this entry »
LONDON (MarketWatch) – While foreign exchange is unlikely to be the subject of bold public pronouncements when the world’s most powerful finance ministers and central bankers meet Friday in Washington, China’s call for the replacement of the U.S. dollar as the world’s leading reserve currency is likely to be a hot topic behind closed doors, currency strategists said.
Namely, foreign-exchange traders will be looking for any clues to discussions with Chinese officials as policy makers around the world attempt to piece together the implications of remarks by China central bank governor Zhou Xiauchuan in March for the eventual replacement of the U.S. dollar as the world’s main currency with special drawing rights, the quasi-currency issued by the International Monetary fund. Read the rest of this entry »
A London perspective on next week’s G20 summit inevitably places Britain, and the Prime Minister Gordon Brown, at the centre. But among those countries briefly orbiting the British sun there are two – the United States and China – that could, almost by themselves, dictate the future of the world. What is more, recent days have supplied ample evidence of the potential for friction between them. Already they seem to be circling each other warily, probing their comparative strength. Read the rest of this entry »
China may offer US$100 billion in additional financing to the International Monetary Fund during the upcoming G20 summit in London, giving the agency more ammunition to fight the unfolding global financial and economic crisis, a senior economist said on Monday. Read the rest of this entry »
China Finally Diversifying Out of the Dollar? Everyone knows that China has $2 trillion in foreign reserves. Two-thirds of those reserves are said to be denominated in dollars.
But – after years of speculation – there are increasing signs that China is diversifying out of the dollar. Read the rest of this entry »
MOSCOW – Officials involved in the Russian oil industry, and the country’s state treasury, breathed a sigh of relief as the Chinese and Russian governments announced agreement on a revolutionary shift in future Russian crude oil flows.
The key relationship for any global recovery is between the US andChina. By the same token, any serious deterioration in their relationship would propel the world towards a second Great Depression. The Chinese citizen has funded the credit-driven American consumer boom: or, to put it another way, China’s government has enabled the US to run an enormous current account deficit by buying huge quantities of US treasury bills. If China stops this, the value of the US dollar would plunge, and a bitter trade war, engulfing the rest of the world, would ensue.
For some the idea that China can “decouple” from the US is blasphemous. Indeed, China has no immediate intention of depegging from the dollar. Read the rest of this entry »
One of the lesser known mysteries of modern times is what really happened at Watergate. The official story is told in “All the President’s Men” but the story goes deeper down the rabbit hole. Read the rest of this entry »
China: Carpe Diem!
Axel Merk, December 9, 2008 Merkfund
China has a unique opportunity and responsibility to shape not only its own future, but also that of the global economy. While China is by no means responsible for the plight the world faces, it has played an important role in allowing global imbalances to be built. If China decides to help prop up the world economic model that got us into trouble in the first place, we may face the same challenges again a few years down the road. Except then, China may not have $2 trillion in reserves to rescue its economy, and could face severe challenges. China will ultimately act in its own best interest, but prudent she must be. The time for China to act is now. Read the rest of this entry »
In These New Times 