Flooding The World With $

[churchill]

The US now the IMF poised to print $ , UK printing , switzerland printing , japan printing , Euroland next ?

http://www.telegraph.co.uk/finance/finance...ive-easing.html

In my not very mathematical mind if you are printing money and handing it out , this must devalue the currency and then must lead to inflation - So basically the worlds leaders seem to be printing money to limit their debts -

I suppose they figure that they will tackle the inflation problem when it arises .

So have we got high inflation , high interest rates and therefore ongoing pain for years ahead ?

[sorensen]

Yes, they are printing tons of $...and it is smart!

The US is owing China some 2 Trillion $, but if they keep printing China can buy a use GM pick-up truck for their US bonds 10 years from now.

China is part of the problem and they should return the favor and start buyng US made products ASAP.

Robert

[12DrinkMore]

I am not sure that the IMF can simply issue SDRs willy nilly.

From www.imf.org

Today, the SDR has only limited use as a reserve asset, and its main function is to serve as the unit of account of the IMF and some other international organizations. The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions.

It is not a real currency, but has a value based on four currencies

With effect from January 1, 2006, the IMF has determined that the four currencies that meet both selection criteria for inclusion in the SDR valuation basket will be assigned the following weights based on their roles in international trade and finance: U.S. dollar (44 percent), euro (34 percent), Japanese yen (11 percent), and pound sterling (11 percent).

I cannot see how these SDRs are going to provide the "get out of jail free" card that "Alistair Darling and senior figures in the US Treasury" would like to have. Seems to me this is a non-starter.

So have we got high inflation , high interest rates and therefore ongoing pain for years ahead ?

Go for high inflation first, removing the debts and destroying savings, and then high interest rates to try and put the genie back in the bottle. Ongoing pain is, in any case, awaiting us.

Yes, they are printing tons of $...and it is smart!

The US is owing China some 2 Trillion $, but if they keep printing China can buy a use GM pick-up truck for their US bonds 10 years from now.

China is part of the problem and they should return the favor and start buyng US made products ASAP.

China has been considered part of the solution for years, and Clinton's visit has made it clear that China is important to the USA as it soaks up huge quantities of treasuries, exports cheap goods and keeps USA going.

So tell us please, which particular US products do you think the Chinese will start buying en masse?

But China is well aware of the issue and is certainly making medium to long term plans to get out of the situation. My bet is that they will invest and develop the Asian markets as well as their domestic market. I believe that the western debtor nations are going to be in a long recession/depression for many years and during this time there will be a huge swing of prosperity towards Asia.

This is a vision that most westerners are not prepared to consider, but if you look at

- where the money is

- where the advanced production facilities are

- where there are lots of natural resources

- where there is a massive undeveloped market for houses, cars and consumer goods

- where there is abundant food

I think you have to agree that the upside potential in Asia is HUGE and the downside potential with the debtors is MASSIVE.

[LeungKen]

Now everybody can print off a few............

[GuestHouse]

My bet is that they [CHINA] will invest and develop the Asian markets as well as their domestic market.

I betting they'll do nothing of the sort and that what they will do is annihilate the Asian competition for markets and resources.

China is facing huge financial problems, with the added risk of civil and political unrest - Their first priority is to keep a lid on this and to do that they need to get their own economy started.

Option 1. Long haul develop Asian markets

Option 2. Remove Asian competition for what markets are available and do what is necessary to get the western 'customer' markets buying again.

Option 2 has a couple of clear advantages a) They are very much more likely to respond with demand in a shorter time than Asian Markets Getting the western markets (and particularly the US) back on their feet greatly reduces the chances of the US defaulting on debts (Something China cannot afford - reason for Clinton being in the picture??!!).

There are many ways to look at Asia - one is through the eyes of history, growing economies, competing for markets and SCARCE resources, pathetically inadequate regional diplomacy (ring a bell?).

The news today is China launches a cheap car on the Thai market and the news for a while now has been China doing just as it pleases with the Mekong.....

Asia... ASEAN..... stop thinking 'Unity and Frienship'.

[lannarebirth]

^Sounds about right. A little something from my Inbox:

http://www.ritholtz.com/blog/2009/03/long-...-and-deflation/

[GuestHouse]

Now something else the Chinese are aware of..... there is nothing so politically dangerous as a government's failure to deliver on expectations.

Two decades of growth are now being rounded off by recession (growth in population greater than growth in the economy) while the engine for middle class prosperity in China (foreign income turned into a property boom) has gone into full flat out reverse.

I don't doubt that China will play a role in getting the world economies back in order (a matter of self preservation), but the rest of Asia? Nah! And certainly not with China's help.

[Jake1]

Now everybody can print off a few............

That's when the $ could be converted into Silver. There isn't anymore Silver certificates floating around, now we're stuck with Federal Reserve funny Money

[hhgz]

"The US is owing China some 2 Trillion..."

That's not true. The amount you gave is for ALL of China's foreign reserves held, and only a portion of that is USD.

[Naam]

The US now the IMF poised to print $...

the IMF can't print dollars. try stronger glasses when you read the usual rubbish a telegraph journasslist writes.

[Merangue]

"The US is owing China some 2 Trillion..."

That's not true. The amount you gave is for ALL of China's foreign reserves held, and only a portion of that is USD.

I believe the figure is believed to be 2 thirds of the reserves which would mean about 1.35 trillion in US dollars.

China has a strong vested interested in Helping America avoid devaluation AND inflation. They may well have shot themselves in the foot.

Whilst that sounds like a colossal figure by the way. Population taken into account, it is actually not that large a reserve really.

2 trillion divided by 1 billion?

Still staggering figures mind you.

[lannarebirth]

"The US is owing China some 2 Trillion..."

That's not true. The amount you gave is for ALL of China's foreign reserves held, and only a portion of that is USD.

I believe the figure is believed to be 2 thirds of the reserves which would mean about 1.35 trillion in US dollars.

China has a strong vested interested in Helping America avoid devaluation AND inflation. They may well have shot themselves in the foot.

Whilst that sounds like a colossal figure by the way. Population taken into account, it is actually not that large a reserve really.

2 trillion divided by 1 billion?

Still staggering figures mind you.

US Treasury figures by country:

http://www.treas.gov/tic/shlhistdat.html

[churchill]

The US now the IMF poised to print $...

the IMF can't print dollars. try stronger glasses when you read the usual rubbish a telegraph journasslist writes.

But a large proportion of THE PAPER they print would be guaranteed against the US $ ?

[churchill]

"The US is owing China some 2 Trillion..."

That's not true. The amount you gave is for ALL of China's foreign reserves held, and only a portion of that is USD.

I believe the figure is believed to be 2 thirds of the reserves which would mean about 1.35 trillion in US dollars.

China has a strong vested interested in Helping America avoid devaluation AND inflation. They may well have shot themselves in the foot.

Whilst that sounds like a colossal figure by the way. Population taken into account, it is actually not that large a reserve really.

2 trillion divided by 1 billion?

Still staggering figures mind you.

US Treasury figures by country:

http://www.treas.gov/tic/shlhistdat.html

The UK by % and country size seems VERY high ?

[churchill]

http://www.answers.com/topic/special-drawing-rights

[Naam]

The US now the IMF poised to print $...

the IMF can't print dollars. try stronger glasses when you read the usual rubbish a telegraph journasslist writes.

But a large proportion of THE PAPER they print would be guaranteed against the US $ ?

SDRs are not dollars, their value is based on a basket of currencies.

[AlexLah]

Yes very clear from their website.

Do you have anything interesting ore helpful to add Naam?

[Naam]

Yes very clear from their website. Do you have anything interesting ore helpful to add Naam?

Churchill's posting "guaranteed against the US $" proved that it was not clear for him. do you have any stupid pictures or a youtube clip on SDRs to add Alex? perhaps Strauss-Kahn screwing his secretary on a pallet of goldbars in the basement of the IMF?

[churchill]

MOSCOW - China and other emerging nations back Russia's call for a discussion on how to replace the US dollar as the world's primary reserve currency, a senior Russian government source said.

http://www.businessspectator.com.au/bs.nsf...ent&src=rss

Edited March 20, 2009 by churchill

[churchill]

The rise of the rouble ?

Putin Warns Against Printing Money to Cover Deficit

http://www.bloomberg.com/apps/news?pid=new...id=aU9owrq4NCVA

[lannarebirth]

The rise of the rouble ?

Putin Warns Against Printing Money to Cover Deficit

http://www.bloomberg.com/apps/news?pid=new...id=aU9owrq4NCVA

You first.

[sendbaht]

The problem does not lie in the Western way of life—industrialism, capitalism, pluralism, free speech, and democracy. The problem lies in the lens through which we see. Capitalism works. It works clumsily, awkwardly, sometimes brilliantly, and sometimes savagely. We need to print then print, all in a cycle. All will work out fine and then we will be in some new cycle, learn and earn from each one.

[lannarebirth]

The problem does not lie in the Western way of life—industrialism, capitalism, pluralism, free speech, and democracy. The problem lies in the lens through which we see. Capitalism works. It works clumsily, awkwardly, sometimes brilliantly, and sometimes savagely. We need to print then print, all in a cycle. All will work out fine and then we will be in some new cycle, learn and earn from each one.

I disagree. Even the cynics, like me, who will buy the dip and search for a bottom, know something is dieing here, and that's not necessarily a bad thing. These mercenary corporatists who have no national allegiance (or even to shareholders) are gonna get neutered. Might kill the markets for awhile, but its a flesh eating bacteria thats killing its host. Its got to go.

Edited March 20, 2009 by lannarebirth

[sorensen]

All this talk about "stimulus packages" and "bailouts"...

A billion dollars...

A hundred billion dollars...

Eight hundred billion dollars...

One TRILLION dollars...

What does that look like?

We'll start with a $100 dollar bill. Currently the largest U.S. denomination in general circulation. Most everyone has seen them, slighty fewer have owned them. Guaranteed to make friends wherever they go.

A packet of one hundred $100 bills is less than 1/2" thick and contains $10,000. Fits in your pocket easily and is more than enough for week or two of shamefully decadent fun.

Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000). You could stuff that into a grocery bag and walk around with it.

While a measly $1 million looked a little unimpressive, $100 million is a little more respectable. It fits neatly on a standard pallet...

And $1 BILLION dollars... now we're really getting somewhere...

Next we'll look at ONE TRILLION dollars. This is that number we've been hearing so much about. What is a trillion dollars? Well, it's a million million. It's a thousand billion. It's a one followed by 12 zeros.

You ready for this?

It's pretty surprising.

Go ahead...

Scroll down...

Ladies and gentlemen... I give you $1 trillion dollars...

(And notice those pallets are double stacked.)

So the next time you hear someone toss around the phrase "trillion dollars"... that's what they're talking about.

[cmsally]

MOSCOW - China and other emerging nations back Russia's call for a discussion on how to replace the US dollar as the world's primary reserve currency, a senior Russian government source said.

http://www.businessspectator.com.au/bs.nsf...ent&src=rss

Interesting - I was wondering whether the Chinese had shot themselves in the foot with Wen's comments about US economy. Maybe there's some reasoning after all, or maybe it was on the downward slippery slope anyway.

[churchill]

Everyone talks about either inflation or deflation - I think it will be a mixture of the 2 .

Inflation for foods , commodities - and Therefore land and farming

Deflation for non essential items , cars , tvs etc .and Perhaps housing as people downsize .

Inflation for foods because of Global Warming , Population increase and other commodities because of all the Government spending of infrastructure projects .

[churchill]

Can somebody please explain -

Governments are flooding the markets with paper to encourage banks to lend to encourage people to spend when property markets and prices for non essential items are going down . So governments want populations to over borrow to spend on assets that are going down in value - This keeps factories open and some people employed in the short term , but in a few years will make matters even worse ?

How does it solve the problems we are in -

It seems to me quantative easing is making matters worse not better .

[Jake1]

It seems to me quantative easing is making matters worse not better .

Quantitative easing is like running low on oil and deciding to throw some water in the mix

You have more Oil but it makes your car run like sh1t

[Naam]

It seems to me quantative easing is making matters worse not better .

Quantitative easing is like running low on oil and deciding to throw some water in the mix

You have more Oil but it makes your car run like sh1t

i wonder whether those of us (and that includes me) who oppose whatever measures are taken globally are qualified to judge those measures or the initiators. this is neither a rhetorical nor an academic question and i would like to hear some opinions.

[flying]

i wonder whether those of us (and that includes me) who oppose whatever measures are taken globally are qualified to judge those measures or the initiators. this is neither a rhetorical nor an academic question and i would like to hear some opinions.

I am not qualified to judge those measures or the initiators but.......

It is obvious by judging the mess we are in that neither were/are the initiators. Since they are pretty much the same group/groups that made this mess.

I will say though that qualified or not.............The customer who is picking up the tab for dinner should at least have a say in what the h#ll he is swallowing

To that end I am trying my best not to eat

Edited March 22, 2009 by flying