Posts by "partisan"

Ashraf - as a simpleton in these things would the following Plaze Accords-type scenario for what I understand should be the key summit meeting in Seoul on Nov 20th be totally unrealistic?

All major players seek to avert a USD-led race-to-the-bottom and 'currency wars' threatening to bring trade wars and deepening depression. The US administration, following setbacks in the Nov elections and hostility to more QE, seeks a way to continue purchases of its bonds to suppress its interest rates (of international concern as any rise in rates could cause havoc in the CDS sector's huge interest-rate swaps weighting and precipitate another major global crisis).

China seeks to ease pressures to revalue the yuan upwards given how this would effect its domestic labour market. The Eurozone, Japanese, Swiss and UK seek to lower the value of their currencies to increase their growth prospects - the UK and Eorozone happy thereby to find a justification for reducing contentious cuts programme as well as having further inflation induction to help devalue their debts.

The Seoul accords produce a global realignment of currency policy to revalue the USD upwards, particularly against the Yuan and the Euro. by co-ordinated international buying of USD bonds via selling of China/Asia currencies, Euros, JPY, CHF and GBP. This alleviates the US of having to resort to further substantial QE.

The US, with its revalued USD, leads the purchase - along with China/Asia - of bonds of the most debt-exposed Eurozone, JPY, CHF and GBP as a quid pro quo to suppress these countries' interest rates without having to substantially increase their QE likewise, a source of satisfaction to Germany as the major Eurozone player.

In short - there's an international accord to apply the same principles as China has recently used vis-a-vis the Yuan/JPY in order to stabilise currencies and maintain low interest rates but with QE reduction.

Large falls in stockmarkets as a result of reduced QE expectations would be mitigated by rising confidence in international stabilisation and rising Asian and other markets benefiting from their reduced currency valuations.

Gold would fall, helping China/Asia to increase their very low holdings, with the accords possibly including agreement by major gold holders like the US to sell part of their hoard to them. This would assist the redistribution gold holdings more equitably among the major players as part of a longer term strategy to replace the USD as global lead currency with a basket currency including the metal.

You and forum members will doubtless be able to shoot dwon such a simplistic hypothesis with ease!

John

Catnip -

Excuse my ignorance, but what China rumours were you referring to in your post yesterday?
Many thanks,
John

Catnip -

Not being forex savvy I hope you don't mind me asking dumb questions. Does your position mean that you see the USD turning back up aginst falling Euro resuming ? And gold turning up for similar reason? And do you see any such changes in direction being imminent (within 6 weeks)?

Many thanks,

John

Ashraf -

Do you see USD strong long term (ie. next 12 months)? If there is a currencies/markets crisis in the meantime which includes the USD losing market support, and - given problems with the other major currencies EURO, GBP, JPY - what other currency could attract safe haven support? Could the CAD emerge as a refuge currency? Or will it remain a commodities currency vulnerable to market falls etc?

Any time you could spare for your thoughts would be much appreciated.

John

Ashraf -

Any thoughts on Gold and Silver re US/Iran moves and oil price? Would any bounce just be short term?

Many thanks,

John