THE central bank says the country must consider adopting a gold-backed Zimbabwean dollar warning that the US greenback’s days as the world’s reserve currency are numbered.
The United Nations warned on Wednesday of a possible crisis of confidence in, and even a “collapse” of, the U.S. dollar if its value against other currencies continued to decline.
One sausage or two?
You may be lucky to get half at this weekend's Memorial Day cookout, which is set to cost 29 per cent more than last year, thanks to inflation.
Those thinking of hosting a BBQ - even a modest one - can expect to fork out an extra $45 on food to serve a dozen guests.
The total cost comes to $199, or around 29 per cent more than last year... and that's before soda and alcohol, according to the latest data for metro New York.
mattduke wrote:Less banger for your buck: The Memorial Day BBQ will cost you 29% more this year thanks to inflation
The risk of owning U.S. government debt is as great as any time since the 1950s with yields at the year’s lows and Treasury Secretary Timothy F. Geithner locking in borrowing costs by selling longer-term securities.
Yields on Treasuries would only need to rise 0.3 percentage point over one year on average from 1.67 percent to produce a loss, based on the benchmark Barclays Treasury index, a study by Los Angeles-based First Pacific Advisors shows. The last time bonds were close to this level was in March 2009, when a 0.43 percentage point rise in yields would have left holders of comparable maturity five-year Treasuries with losses.
Chinese policy makers are moving toward the internationalization of the yuan, amid growing worries about the country’s exposure to the fiscal woes of the United States and the U.S. dollar’s role as the global reserve currency.
Li Daokui, an adviser to the People’s Bank of China, told The Globe and Mail that he believes the yuan – which is currently in circulation only in China and a handful of neighbouring countries under special agreements – will be a fully international currency within five to 10 years.
A CHINESE ratings house has accused the United States of defaulting on its massive debt, state media said on Friday, a day after Beijing urged Washington to put its fiscal house in order.
'In our opinion, the United States has already been defaulting,' Guan Jianzhong, president of Dagong Global Credit Rating Co Ltd, the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.
Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies - eroding the wealth of creditors including China, Mr Guan said.
mattduke wrote:China ratings house says US defaultingA CHINESE ratings house has accused the United States of defaulting on its massive debt, state media said on Friday, a day after Beijing urged Washington to put its fiscal house in order.
'In our opinion, the United States has already been defaulting,' Guan Jianzhong, president of Dagong Global Credit Rating Co Ltd, the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.
Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies - eroding the wealth of creditors including China, Mr Guan said.
http://www.straitstimes.com/BreakingNew ... 78361.html
bratticus wrote:HAHAHAHA! China accuses anyone else of devaluing their currency? After they have done everything in their power to keep the yuan devalued? They are just spoil-sports about having to play with someone who started using their own dirty tricks.
Russia will likely continue lowering its U.S. debt holdings as Washington struggles to contain a budget deficit and bolster a tepid economic recovery, a top aide to President Dmitry Medvedev said Saturday.
"The share of our portfolio in U.S. instruments has gone down and probably will go down further," said Arkady Dvorkovich, chief economic aide to the president, told Dow Jones in an interview on the sidelines of the St. Petersburg International Economic Forum.
Russian holdings of U.S. Treasury securities fell to $125.4 billion in April 2011 from $176.3 billion in October 2010, Treasury Department data showed.
mattduke wrote:Russia to Lower U.S. Debt HoldingsRussia will likely continue lowering its U.S. debt holdings as Washington struggles to contain a budget deficit and bolster a tepid economic recovery, a top aide to President Dmitry Medvedev said Saturday.
"The share of our portfolio in U.S. instruments has gone down and probably will go down further," said Arkady Dvorkovich, chief economic aide to the president, told Dow Jones in an interview on the sidelines of the St. Petersburg International Economic Forum.
Russian holdings of U.S. Treasury securities fell to $125.4 billion in April 2011 from $176.3 billion in October 2010, Treasury Department data showed.
Russia reduced holdings 29%.
http://online.wsj.com/article/SB1000142 ... 58930.html
U.S. debt is forecast to soar to 70% of the country's annual economic output -- the highest share since shortly after the end of World War II -- by the end of this year, according to a report by the Congressional Budget Office.
The US' sovereign credit rating is likely to be downgraded regardless of whether the US Congress reaches an agreement on raising its statutory debt limit, Chinese rating agency, Dagong Global Rating Co Ltd, said on Monday.
"If the debt limit is raised and the public debt continues to grow, it will further damage the US' debt-paying ability, which is a key factor in Dagong's evaluation, and we will consider lowering its ratings accordingly," said Guan Jianzhong, chairman and CEO of Dagong.
"If the raised limit fails to pass and the US faces default, the rating will be immediately and substantially downgraded," he said.
According to Guan, the downgrading is really just "a matter of time and extent".
In a what-if scenario run for The Wall Street Journal, IHS Global Insight examined the likely effects of a further sharp drop in the dollar.
The firm's current forecast assumes the value of the dollar will be roughly flat over the next several years. If, however, the dollar fell by an additional 20% over the next eight quarters, the IHS model shows that exports in 2015 would be 12% higher than otherwise predicted. Unemployment would be 5.3%, compared with 6.7% under the steady-dollar assumption. Consumer price inflation would be 3.3% in 2015, compared with 2%.
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