Qatar & Vietnam ditch the dollar

[TexasLawyer]

Source: Financial Times (FT Alpha)

Qatar & Vietnam ditch the dollar

Announcements on Thursday from the Qatari and Vietnamese governments that they are rapidly divesting in dollar denominated securities will not come as good news to the US government. Overseas investors hold half of America’s $4,400bn of marketable government debt, up from a third in 2001 according to the US Treasury department.

Qatari Prime Minister, Sheikh Hamad bin Jassim bin Jabr al-Thani said on US TV that the government-backed $50bn Qatari Investment Authority (QIA) now had less than 40 per cent of its investments in dollars, down from a high two years ago of 99 per cent.

Given that the Emirate’s oil and gas revenue is in dollars, the latest troubles in the US economy have accelerated the need to diversify investments into non-dollar markets. Currencies such as the Euro, the British Pound and the Swiss Frank, are all looking far more stable as investments for the QIA, said Sheikh Hamad. Such was the Qatari PM’s concern about the sliding dollar, that he even said an oil price of $125 per barrel would not be unreasonable.

On Thursday, the State Bank of Vietnam quietly let slip it would be ending its dollar purchase schemes, which it has been using to hold down the Vietnamese currency. Although it only has middling dollar reserves of $40bn, Vietnam is widely regarded as a barometer for economic sentiment among other, bigger, regional dollar sinks like China, Taiwan, Korea or Singapore. Hans Redeker, currency chief at BNP Paribas, told the Telegraph:

Read more: http://ftalphaville.ft.com/blog/2007/10/04/7831/qatar-vietnam-ditch-the-dollar/

[TomInTib]

1. And the band played on...

here comes the Parade.

But it's alright Ma, we're only bleeding.

[poverlay]

2. That's serious business. I can't believe that Qatar number. I must go buy some Euros and gold...nt

[gateley]

16. It may be past the Eruo/Gold thing. May have to start planting food and diggingq

wells. This is the United States of America -- what the fuck happened?

[Javaman]

50. moron* and his room full of dopes and SCOTUS staged coup 7 years ago...

that's what happened.

[rurallib]

3. We must invade them. That is all.

[BB1]

8. Noooo! Don't invade!

apply for political asylum.

[Javaman]

51. When one country changes over to the Euro, moron* and poppy invade...

when everyone starts to change over to the Euro, they* shit a brick and blow their brains out in a bunker.

deconstructing our fantasy into reality.

[lovuian]

4. Well when you see a Congress who just writes blank checks

to Bush ya I'd get out of the dollar too

its going to get quite ugly

[Deja Q]

7. Bill Gates said the dollar would collapse, back in 2005.

Moe people should have listened.

Of course, offshoring hasn't helped the dollar at all...

[ProudDad]

37. Is this the same Bill Gates who said

that nobody will ever need more than 256K of ram??? :evilgrin:

He might be right this time though...


On Edit: and m$ is one of the KINGS of offshoring...

[Roland99]

17. Just wait about 10 years when Social Security and Medicare obligations consume the bulk of revenues.

We're heading for financial oblivion.

[happyslug]

27. So the bulk of US Reserves is from SS Taxes??

Till about 2012 The Treasury will Collect more in SS taxes then it pays out. Come about 2012 it will break even. A little later SS will cash in its treasury bonds to pay SS recipient. We may have to cut back defense spending after that date, but unless the economy truly tanks, SS will survive (The scenario where SS goes bankrupt is if the US goes bankrupt at the same time, an unlikely event).

[Roland99]

30. Google for 'fiscal wake-up tour'

Posting from phone so can't paste a link.

Then Google for 'almost unnoticed bi-partisan anxiety'. The WaPo article from over two years ago that first alerted me to the pending financial oblivion facing the US.

[Vitruvius]

48. Link to WaPo article

http://www.washingtonpost.com/wp-dyn/content/article/2005/05/17/AR2005051701238.html

[Toots]

31. According to the Mayans the world ends in 2012 anyway

Their calendar just ends in 2012 and they had a very sophisticated calendar..

[druidity33]

35. Dec 22? or was it the 23rd? nt

[ProudDad]

38. I believe it's the 21st -- the Solstice

On Edit: But it's not the end of the world...

Just "the end of the world as we know it and I feel fine"...

[druidity33]

40. the translation

varies... i've heard "the end of what we know", "the end of the world as we know it", "the end of civilization/society", "the end of knowing". In any case, it sounds like pretty radical change.

And the solstice "date" actually varies from time to time depending on planetary alignment... ie. not always on the 21st.

(an excellent REM tune btw, perhaps not related to the Mayans)

[ProudDad]

43. Everything's related to the Mayans, right?

:)

The Solstice occurs on the 21st in 2012...

http://www.greatdreams.com/2012.htm

[BB1]

53. do you know if there's

wintertime involved? And what about time-zones, does every time-zone get its own rapture, or do we all go out with a bang?
So many questions, so little time...

[DemReadingDU]

32. I have heard that Medicare is in worse shape than SS, n/t

[ProudDad]

39. Yep, it's been seriously underfunded by the pukes

for the last 12 years...

Slight adjustments and passing Universal Single-Payer (increasing the size of the pool to include everyone) would easily take care of the "problem".

The "Medicare Crisis" has been seriously overblown because the pukes and "conservative" Dems HATE Universal Health Care as it's practiced in the Civilized World...

[pokercat999]

42. The continued rape of our treasury by corporations through

the DOD/military spending supported by both houses of congress will be our downfall. IMO it's only a matter of time and a short time at that. My guess is that sometime after 2012 maybe around 2016/2020 the collapse will come and the congress critters of both houses and the mis-administration of the party in "power" will blame SS and Medicare and end or severely cutback both programs. This will enable the corporations to maintain sales of useless hardware to the military and to scrape the bottom of the treasury barrel before moving on to the next country, where ever it might be.

[Roland99]

41. Fiscal Wake-Up Tour (impending financial oblivion for the US re: SS and Medicare)

http://www.concordcoalition.org/events/fiscal-wake-up/index.html



plus

Almost Unnoticed, Bipartisan Budget Anxiety
http://www.washingtonpost.com/wp-dyn/content/article/2005/05/17/AR2005051701238.html


These are the links I was discussing in an above post.

Also, Comptroller David M. Walker (mentioned in the above WaPo article) is a key figure in the Concord Coalition Fiscal Wake-Up Tour. He was on 60 Minutes recently discussing this.

[freefall]

44. Thanks for these excellent links. We should all be asking the recommended

questions and demanding clear answers of the candidates.

Peace,

freefall

[Klukie]

5. What the hell is going on?

I am very ignorant of our monetary system and what it entails. Can someone please explain what this means.

[BB1]

9. it's breaking down.

compare it to a house of cards.
Take out a card or two, doesn't make it fall. But when it falls, everything goes

[ProudDad]

36. The quick version is

that the world economy is floating on a sea of oil -- especially in USAmerica...

Petroleum valued in Dollars has been the underpinning allowing the USAmerican Government to finance their debt (that's borrow from other corporate capitalist masters in other countries). The PetroDollar.

This debt was accrued to prop up our negative balance of payments (we "buy" more than we sell - mostly Chinese CRAP to fill the aisles of wal-mart) and the bloated, nasty, vicious U.S. war machine with its legions stationed throughout the world...

These legions are stationed primarily to protect the theft of the commons from the people of the Earth.

USAmerica ain't worth the paper that other countries are holding.

Saddam's MAJOR sin (and Iran's too) was his threat to quit selling their oil for dollars. Now other nations ARE converting because their faith in the USAmerican economic system is fading.

(The whole fucking thing is an exercise in "faith" based economics -- you don't REALLY think that paper $100 bill is really worth $100, Do you? It can't be converted into $100 of ANYTHING -- except USAmerican hot air)...


An analogous situation would be like buying a house at the top of the bubble with a no down, low interest "creative" loan. Now the bubble's burst (as it HAS). Now your balloon payment/Interest increase is coming due and the house isn't "worth" what you paid for it. So you try to sell it but the paper ain't worth its face value any more...

That's the USAmerican economy -- ain't worth shit, don't make nothing but hot air any more, and the rest of the Earth is catching on and bailing...

---------

However, by investing our time and talents and politics into local sustainability, into learning how to make things people NEED again, into building alternative systems of resource distribution that cut out the corporate capitalist masters, people to people economics again, we'll survive as the multi-nationals go down to their well-deserved ignominious end.

[Deja Q]

6. I know! Let's offshore jobs to Vietnam!!! That'll resolve everything!!

Or maybe not, but who knows?

[saigon68]

28. Ask Nike

</sarcasm>

[kineneb]

10. and so it begins...

...as modern times give new meaning to the "Domino Theory". Who is next?

To DUers who are well-off enough: metals and Euros.

To the poor DUers (of which I am one): canned goods and wheelbarrows.

[DrDan]

13. wheelbarrows to lug those dollars around when you shop for groceries?

[gateley]

14. For a grocery item, period. Not groceries plural, you optimist! nt

[DrDan]

21. yes - how foolish of me . . .

[kineneb]

18. wheelbarrow of money for loaf of (ersatz) bread...Weimar. nt

[DrDan]

22. well . . . I guess this is one way to deal with our nation's obesity problem . . .

[superconnected]

25. My family, my sisters family, and my brothers family

have been stocking up on non-perishible food and blankets.

We've been doing it since last week when the commoditys market announced it had the highest price gain in 32 years. And last friday when our states wheat crop was announced to be the most expensive it's ever been.

That means food prices, and oil is about to skyrocket. Right now prices are up 70% and people are already seeing the increase in grocery stores. Milk hit $6 a gallon at some stores near me which my sister called to tell me. (she only lives a mile away).

There was an article here last friday saying the food shelters are not able to buy enough food now because of the prices soaring. The homeless and poor will freeze and starve this winter. The shelters already know. So do the banks. Big investment banking people were already commenting on what's to come, in the news.

[LadyAziz]

11. .

We are so doomed, damn those that voted/ installed * into office. And also damn the Congress and others. :grr:

But you can't blame them for trying to save their economies.

Ok, move along nothing to see here :eyes:

[HuffleClaw]

12. good n/t

[gateley]

15. Let's say we didn't begin the war, but the dollar situation is where it is today

(yes, I know)

Wouldn't this be getting top priority in the news? Wouldn't there be an uproar over this? And how could we go about correcting it -- REALLY correcting it? Whatever that would be, we need to be doing this now.

[jaybeat]

19. Well, not dumbing billions of $US a week into a black hole would help. (nt)

[gateley]

20. Yeah, that's why I was curious as to how we would rectify this if the war

(and those BILLIONS) weren't a factor. Which is kind of an exercise in futility because this is a result of the war.

So the war IS a factor and we still have to DO something. I just haven't heard 'what' that will be from the 'experts'.

[superconnected]

26. Since we've been sold out by the democrats in congress

the war will not be stopped.

All we can do now is count the dead and keep totalling the financial damage.

[jaybeat]

46. I'm not sure, but what other countries have had to do is pretty nasty

Unless I'm mistaken, countries with falling currencies need to do things like reduce government deficits (i.e., raise taxes, reduce spending), reduce imports, raise interest rates and reduce the cost of exports (by reducing labor costs and government subsidies for raw materials). And usually not by small amounts. This could mean huge tax burdens without any public spending to show for them, *really* expensive imports (aka everything), and debt (houses, cars, credit cards, business equipment or expansion, etc.) also becomes *really* expensive.

The result could be massive inflation combined with high unemployment, declining wages and benefits and accelerated domestic resource extraction (mining, logging, etc.)

In other words, quite the party!

:party:

[aquart]

23. Oh. Shit.

Not a surprise, but....not good.

Thanks, George. We went from a superpower to a banana republic in less than seven years.

[TrogL]

24. China's next

:popcorn:

[TexasLawyer]

29. And now this from UAE

Pressure mounts to drop peg as dollar's slide seen to continue

BY ISSAC JOHN (Deputy Business Editor)

2 October 2007

DUBAI — With the dollar set for a sustained slide against Euro and other currencies, the UAE is under mounting pressure to revalue the dirham and review its much debated dollar-peg policy, analysts said.

Gary Dugan, Chief Investment Officer, Global Wealth Management, EMEA at Merrill Lynch, said the dollar, which has been losing value against a host of foreign currencies, will weaken further against the yen and Swiss franc. "Our greatest conviction is that the dollar will weaken further. One more worrying facet of recent dollar weakness has been market concern that more countries might drop the dollar peg," he said.

Dugan said if the dollar were to lose its lustre as a reserve currency this could prove disruptive to the global financial system. "In the Middle East the market has become concerned that more countries would drop the dollar peg with Opec potentially changing the oil price to a currency basket rather than the dollar."

Financial analysts said the prospect of a prolonged sliding dollar makes central bankers in the MENA region anxious since they sit on a large amount of greenbacks. "While a fast eroding dollar has also caused rampant inflation across the region forcing many to question the continued peg of the GCC's currencies to the dollar, the issue has become intensely pressing for the countries in the region as their enormous current account surpluses are from dollar-denominated oil exports," they pointed out.

<snip>

http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2007/October/business_October37.xml§ion=business&col=

[ProudDad]

33. Can ya' hear it? The house of cards?

it's falling down...

Time to get local.

Time to dump the corporate capitalist masters and starve the beast.

Time to get Sustainable...

For Example -- a great paper on the political background behind Water Conservation here in the SouthWest...

http://www.attractionretreat.org/Writings/WaterForum.html

[rodeodance]

34. Dollar's double blow from Vietnam and Qatar

Source: telegraph

> http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/10/03/bcnviet103.xml&CMP=ILC-mostviewedbox

Dollar's double blow from Vietnam and Qatar

By Ambrose Evans-Pritchard
Last Updated: 12:12am BST 04/10/2007

Vietnam is planning to cut its purchases of US Treasuries and other dollar bonds, raising fears that Asian central banks with control over two thirds of the world's foreign reserves may soon join the flight from US assets.
The Saigon Times said this morning that the State Bank of Vietnam was abandoning the attempt to hold down the Vietnamese currency through heavy purchases of dollars. The policy is causing the economy to overheat, driving up inflation to 8.8pc.

Vietnam, which has mid-sized reserves of $40bn, is seen as weather vane for the bigger Asian powers.

Together they hold $3,575bn of foreign reserves, over 65pc of the world's total. China leads with $1,340bn, but South Korea, Taiwan, Singapore, and even Thailand all built up massive holdings.

The concern is that once one or two members of the region jump ship, it could set off a broader scramble. None of them want to be the last one left holding a devalued asset. Vietnam's central bank said this week that it would move "gradually" to a floating currency..........


Read more: Dollar's double blow from Vietnam and Qatar

[tabasco]

45. Thanks Bush. When the euro hits $1.50 they should put your picture on it

and make it a 50 cent bill.

[KoKo]

47. Don't think that Bush isn't fine with this. Now they can all buy up our Commodities and Real Estate

The "Big Games" are just beginning for the Sell Off of US Assents to pay off our debt. Goodbye Redwoods, Mining Interests and great sell off of those vacant Tower Condo's all over Florida and the West Coast to all those looking for "investment" to pay back their worthless investment in US Treasuries. Actually they already own all of it...so scapping up the rest is easy.

We can work for third world wages as our wheat, soybeans and other food crops go "overseas" and we at home import their tainted crap. We can scavenge the garbage dumps and buy our clothes and used appliances at the Good Will or on E-Bay.

Times are GOOD...Don'tch just lOVE 'Free Market Capitalism!' It works great for the RICH...they get RICHER...the poor will do as they always have done...survive. Just that there will be so many of the poor...so many of us.

[olddad56]

49. Vietnam? After we treated them so good in the war? where's the love.

[nguoihue]

52. Well, you know what they say

Payback is a mofo.