Chop chop the dollar? Are we on the verge of USD abandonment?

[Guest]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

Metalman - is somebody else paying for your time right now to deposit these serial jewels of insight? Or are you self employed, goofing off, and skating on your family breadwinner obligations by only working half the day perhaps?

_________

And with regard to the point - Of course it does not compute. Should be clear as a limpid pool of water. But we can palaver the point for half an hour more quite easily to while away a Friday afternoon.

[ASH]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

that's an appealing rumor ej started, not a confirmed fact so far as i know. you know otherwise? did i miss the post where he provided evidence?

What I wonder is how the value of commodities and commodity-producing operations that are supposedly being purchased compare to the value of the bonds that need to be "moved". I personally can't conceive of the Chinese buying up hundreds of billions of dollars worth of anything over a short span of time, without producing a really noticeable effect on the market. This theory, though appealing, doesn't compute for me. (Specifically, I totally believe that some of China's treasuries may have served as collateral for loans to buy commodities, just as they have started to buy some gold -- but I can't conceive that the volume of transactions could possibly be big enough to free them from the bulk of their treasury holdings... yet.)

[jtabeb]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

Please; Where do you get that information from?

EJ posted something to that affect on an earlier post, I'll look for the link.

BUT!!!!

Comfirmatory evidence comes from zero-hedge where they show russian UST holdings up by $20 Billion AS THE RUSSIANS were selling dollars to buy rubles to protect their currency from speculator attack. This sino-russian oil deal was reported at $20 Billion, so it seems a good fit to me.



My guess is that china and possibly the ME oil holders of the dollar have been neutralized as threats.

China got a bunch of commodities and the ME oil producers will buy (now I AM GUESSING) the IMF gold.

[metalman]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

EJ posted something to that affect on an earlier post, I'll look for the link.

BUT!!!!

Comfirmatory evidence comes from zero-hedge where they show russian UST holdings up by $20 Billion AS THE RUSSIANS were selling dollars to buy rubles to protect their currency from speculator attack. This sino-russian oil deal was reported at $20 Billion, so it seems a good fit to me.

that's circumstantial evidence. all due respect to the zerohedge guys and you but a 'good fit' is not the same as confirming evidence.

[Guest]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

Bleat bleat. iTulip's unofficial but ubiquitous content-proctor speaks out.

[metalman]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

Bleat bleat. iTulip's unofficial but ubiquitous content-proctor speaks out.

itulip's self appointed nay sayer says... nay!

itulip says, gold up! he says, gold down!

itulip says, stocks down! he says, stocks up!

itulip says, dollar down! he says, dollar up!

itulip says, bear market rally! he says new bull market.

itulip says stick to a thesis that's worked for 10 yrs. and change it only if the underlying asumptions change.

he says change it. we're bored with doing nothing and making money. but don't systematically question the assumptions before you dump a working thesis that's made you money and kept you from losing A SINGLE DIME in 11 years...

no!

read joe whassafuck's nifty weekly trading newsletter for the latest hot trend tips!

and... above all...

trade, trade, trade, trade!

trade, trade, trade, trade!

trade, trade, trade, trade!

trade, trade, trade, trade!

...

what we have here, mr luke, is a failure to communicate.

metalman's investment style...



luke's investment style...

[ThePythonicCow]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

I personally can't conceive of the Chinese buying up hundreds of billions of dollars worth of anything over a short span of time, without producing a really noticeable effect on the market. This theory, though appealing, doesn't compute for me.

The Chinese have been at it for a while, as they developed extensive contacts world wide to provide the commodities they needed for their industrialization, economic boom and exports.

They are busy in many nations, in South America, Australia, Africa, the Middle East, Asia, ...

I went through my browsing history for the last month and pulled out some of the relevant links I've visited relating to China and commodities. It's a long list.

================================================== ==========
Re: Brazil & China dump the $ (May 19, 2009) Post by allenjs

China just bypassed the U.S. as Brazil's largest trading partner. This is due in large part to China buying up all of Brazil's natural resources using worthless dollars.

In Downturn, China Sees Path to Growth (March 16, 2009)

To that end, Chinese companies are shopping for foreign businesses to acquire. The commerce ministry announced late Monday that it was greatly easing the government approval process for Chinese companies seeking permission to make foreign acquisitions.

The ministry is now leading its first mergers and acquisitions delegation of corporate executives to Europe; the executives are looking at companies in the automotive, textiles, food, energy, machinery, electronics and environmental protection sectors.

See posts by "The Outback Oracle", an iTulip'er in Australia report that China has bought big chunks of Australian natural resources. I don't have references at hand. Well, one such post is on my screen, at: Re: China goes to see OZ before G20 !!!!

Here's the company blurb for China Yunnan Copper Australia Limited (CYCAL), in Brisbane Australia. Their Chairman of the Board is Chao Yang and their Executive Director is Zewen Yang - good Aussie names both ;).

China Yunnan Copper Australia Limited (CYCAL) in engaged in exploring and developing minerals in Australia and overseas. CYCAL focuses on high quality copper, gold and uranium projects and has eleven 100% owned exploration permit for minerals (EPM's) tenements located in the Mount Isa Inlier, Ravenswood-Pentland Province and the Clermont Inlier in Queensland, Australia.

Or see these hints of Chinese purchases in Australia, in PM Kevin Rudd keeps Lodge talks with Chinese secret (March 24, 2009)

EJ commented on the involvement of Australia and the Chinese during this collapse of the FIRE economy in: Re: Kudos for Eric Janszen (Sept 8, 2007)

Search for iTulip posts by Mega with the word "China" in them, He's been busy on this. For example: China +Copper......Spin or substance? (April 15, 2009)

Try a Google search for some such as "china copper oil gold commodities"

Commodities - It's China's World; the Rest of us Just Live in It (May 13, 2009)

China and the US bond paradox

Long thread from March 2009 with much discussion of China's shopping spree.

China Demand WIll Continue to Drive Commodities Bull Market (Sept 2, 2008)

Details such as China buys more OPEC oil than the United States.

China's Mining Companies to Buy Assets Overseas, Molyneux Says (Oct 11, 2007)

Mining companies in China, the largest consumer of copper, iron ore and coal, are likely to buy more metal deposits and oilfields in Africa, Latin America and Australia to feed rising domestic demand, Citigroup Inc. said.

Aluminum Corp. of China's purchase of Peru Copper Inc. in August for $860 million signals the start of overseas takeovers by Chinese companies, Alexander Molyneux, Citigroup's head of metals and mining in Asia, said in an interview today.

The Danger in the Commodity Boom (Sept 29, 2005)

China now consumes about 40 percent of the world's cementproduction, 30 percent of its coal, 27 percent of its iron and steel and 25 percent of its aluminum. Less than a decade ago, China was a net exporter of oil. Now, China has become the world's second-largest oil importer, behind the United States. China also used to be a major coal exporter, but domestic demand now consumes almost all internal production.

China has been secretly stocking up on gold (April 24, 2009)

China is really looking at a lot of other options to get away from the U.S. dollar. The latest report is that it has been building huge gold reserves. There is no doubt that China wants to get out and away from the U.S. dollar now. We have heard SDRs, copper and precious metals all mentioned as plays out of U.S. dollars.

Adrian Douglas: Have China watchers never heard of a decoy? (May 17, 2009)

...

I would bet that the Chinese have been busy using their Treasury debt as collateral against FIXED-interest-rate loans. They will have used this money to buy real assets. We know they have bought at least 454 tonnes of gold. They are importing 70 percent more copper than they consume. They are filling up a strategic petroleum reserve. They have been going around the world making deals for raw materials and acquisitions of small-enough companies that they fly under the radar. (The Chinese learned their lesson from trying to buy Unocal.)

The interest rate on these fixed-rate loans will be partially offset by the interest paid on their U.S. bonds. When the bonds go tapioca, the Chinese will have two options. They can sell some of the assets they bought but at prices much higher than what they paid and so pay off the loans with worthless dollars, or they can simply default and lose their collateral of now-worthless U.S. bonds.
...

The Chinese have vault-loads of intrinsically worthless Treasury bonds that they no doubt have used as collateral to buy intrinsically valuable assets. In contrast, Western central bankers had vault-loads of gold they have loaned or sold to buy intrinsically worthless interest-bearing government debt.

Sinopec, Kuwait to Build $9 Billion Plant in China (May 10, 2009)

China Petroleum & Chemical Corp., Kuwait Petroleum Corp. and an overseas oil producer plan to build a $9 billion refining and petrochemical plant in southern China's Guangdong province, according to the head of China's energy authority.
...
China Petroleum, the oil company known as Sinopec, signed a 116.9 million-dinar ($402 million) five-year contract with Kuwait to build five oil rigs in the Gulf state, Kuwait Petroleum Chairman Sami al-Rushaid said last month.

Shell, China Firms Eye Iraq Oil (Apil 14, 2009)

Royal Dutch Shell PLC is in advanced talks with China's two biggest state-owned oil companies on a possible joint bid to develop the Kirkuk oil field in northern Iraq, a person familiar with the situation said.

China's stranglehold on rare metals (Apr 03, 2009)

China's proposals for a new world currency to replace the dollar have drawn a lot of attention in recent weeks. But the Americans should be more concerned about another development that's largely been ignored. It seems that after 15 years of fighting tooth and claw, China is now the world's dominant supplier of an obscure group of minerals called rare earth metals.

lanthanum ... cerium ... neodymium

[jtabeb]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

that's circumstantial evidence. all due respect to the zerohedge guys and you but a 'good fit' is not the same as confirming evidence.

what you fail to understand is that there are things that are provable and things that are not, that doesn't make them UNTRUE. and many times in financial matters things become provable only much later when more information comes out.

So sorry dude, I do think you can say something is untrue when it is merely unprovable. IF you INVEST LIKE THAT you get KILLED.

Case in point, can I PROVE GOLD MANIPULATION exists? No. Is there enough circumstancial evidence to lead me to believe that there is, you bettcha.

So that why I pulled out all the stops in gold on an "unprovable" concept. ( And I have a sneaking suspicion that it will not always be "unprovable")

By the time you know conclusively, it's dead information, everyone knows at that point. Not a good way to make money IMHO. (your milage may vary)

[metalman]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

what you fail to understand is that there are things that are provable and things that are not, that doesn't make them UNTRUE. and many times in financial matters things become provable only much later when more information comes out.

you have confidence in zerohedge as a source. i do not. who is he/she? no name, no accountability = zero value. that goes for me, too. anyone who listens to my 'advice' is a dope... zero reputation cost if i am wrong.

So sorry dude, I do think you can say something is untrue when it is merely unprovable. IF you INVEST LIKE THAT you get KILLED.

listening to rumors from anon sources on web sites will get you killed faster than hot stock tips from your uncle bob.

Case in point, can I PROVE GOLD MANIPULATION exists? No. Is there enough circumstancial evidence to lead me to believe that there is, you bettcha.

So that why I pulled out all the stops in gold on an "unprovable" concept. ( And I have a sneaking suspicion that it will not always be "unprovable")

the reason to not fuss about gold manipulation is that the point of owning gold is that central banks own it & manipulate it.

By the time you know conclusively, it's dead information, everyone knows at that point. Not a good way to make money IMHO. (your milage may vary)

by the time a rumor is published on a web site it's dead information. i prefer careful analysis that builds a case for a specific call.

time will tell if...

Deflation fare thee well - Part II: Asset valuations in a post-market world

turns out as well as...

Time at last to short commercial real estate

we're we're all waiting for...

'time at last to short treasury bonds'

and for...

'time at last to sell gold'

eight years and counting.

[c1ue]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

Back to the subject at hand:

The big hole in the 'best of worst' argument that the US won't suffer as much as the rest of the world is the same original point I have been continuously pushing out: the US needs to continue to borrow more in order to sustain existing operations.

"Operation Obama" has basically doubled down on what 3 years ago was a 2 billion dollar a day hole: $1B in interest on existing debt and $1B in currency account deficit.

While of course it is too early to say - as EJ/iTulip notes there are still a number of bullets in the Fed/US government's gun - nonetheless the major upswing in interest rates plus a falling dollar does not bode well. At some point whomever must lend to the ongoing and expanding American debt addiction is going to default to its last resort: the American people via the US government.

Sure some of the foreign dollar hoards are going to get charred by the inflation fire...but the FIRE US economy ultimately will find fuel to live on via burning American livelihoods.

[metalman]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

Back to the subject at hand:

The big hole in the 'best of worst' argument that the US won't suffer as much as the rest of the world is the same original point I have been continuously pushing out: the US needs to continue to borrow more in order to sustain existing operations.

"Operation Obama" has basically doubled down on what 3 years ago was a 2 billion dollar a day hole: $1B in interest on existing debt and $1B in currency account deficit.

While of course it is too early to say - as EJ/iTulip notes there are still a number of bullets in the Fed/US government's gun - nonetheless the major upswing in interest rates plus a falling dollar does not bode well. At some point whomever must lend to the ongoing and expanding American debt addiction is going to default to its last resort: the American people via the US government.

Sure some of the foreign dollar hoards are going to get charred by the inflation fire...but the FIRE US economy ultimately will find fuel to live on via burning American livelihoods.

the usa sinks 100 basis points/yr if it stands still...

This paper represents a first attempt at analyzing the impact of foreign flows on a large developed economy. Past work has taught us much about the role of foreign investors in emerging markets. We can now add our results to this literature: Foreign flows have an economically large and statistically significant impact on long-term U.S. interest rates.

Our work also suggests that large foreign purchases of U.S. government bonds have contributed importantly to the low levels of U.S. interest rates observed over the past few years. In the hypothetical case of zero foreign accumulation of U.S. government bonds over the course of an entire year, long rates would be almost 100 basis points higher.

- INTERNATIONAL CAPITAL FLOWS AND U.S. INTEREST RATES, Francis E. Warnock, Veronica Cacdac Warnock, NATIONAL BUREAU OF ECONOMIC RESEARCH, October 2006

US exchange rate and capital controls or bust?

[Guest]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

That is one peculiar looking horse. Where'd you find it?

[metalman]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

That is one peculiar looking horse. Where'd you find it?

google images animated gif

can't recall the exact search... maybe... running?

[Guest]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

I think you are getting soft in the head somewhere.

[metalman]

Re: Chop chop the dollar? Are we on the verge of USD abandonment?

I think you are getting soft in the head somewhere.