Serious Coming to a theater near you: Global USD Shortage

[Runifyouhaveto]

Europe: Spike in U.S. dollar funding needs appears linked to money-market reform
http://blogs.wsj.com/moneybeat/2016...le-for-dollars-but-dont-look-at-deutsche-bank

Japan: Why should there be a shortage of USD in Japan when the USDJPY is at its 3 year lows?
http://www.hnworth.com/article/2016...ncial-anomaly-shortage-of-usd-and-basis-swaps



China:China capital exodus accelerates as further yuan weakness seen
http://www.businesstimes.com.sg/ban...dus-accelerates-as-further-yuan-weakness-seen

 

[frenchbriefs]

How can there be shortage of usd when us is 17 trillion in debt.if anything theres too much liquidity and fed need to start burning the 4 trillion they printed.

 

[krafty]

it's all in the mind of investors, nowadays, everybody is avoiding risk, so safe haven instruments are like USD and gold.

 

[Runifyouhaveto]

How can there be shortage of usd when us is 17 trillion in debt.if anything theres too much liquidity and fed need to start burning the 4 trillion they printed.

A lot of it is relative. US did not print more than some countries in relative comparison.

China's shadow banking industry is ready to implode at that amount. China launched local credit default swaps to mitigate any onshore downfalls. Deutsche bank's derivative exposures is in excess of that amount. The banks in world probably needs another 70 trillion (not 17) to recapitalize.


Even Zimbabwe ran out of US Cash (they had stopped using their currency earlier)

Panic as US Dollar Notes Disappear in Zimbabwe
https://zimnews.net/zimbabwe-money-crises-starts

 

[mojito]

It is call carry trade.

 

[Runifyouhaveto]

It is call carry trade.

Excellent short and sweet answer.

USDSGD 1.37 tonight

 

[Runifyouhaveto]

Expectedly, China is admitted as the main five currencies (USD, Euro, Yuan, Yen, GBP) in IMF in conjunction with SDR-Special Drawing Rights with a whopping 10.92% weighting/share, which is really above market expectations (third to USD and Euro).

IMF member states are encouraged (not enforced) to hold more Yuan in similar proportion by 2020 and major economies can tap on SDR to exchange freely for any of the five currencies.




But China is very confused now, the weighting is overwhelming them:

- China has a massive trade surplus with the rest of the world, how are they going to distribute Yuan to other central banks of such magnitude in the next 4 years, and at what exchange rate? (Special offer?)

- The use of Yuan as settlement has declined by 1/3 in the past twelve months due to a 5-7% depreciation of a tightly-controlled Yuan against USD. This contradicts the IMF/SDR impact and hints at massive capital flight (outlook negative)

- Last but not least, Yuan has been raided repeated offshore in the past 12 months. It will attract more raiders and wipe-out more of China's reserves to defend the currency if Yuan is more freely traded. China's banks are not more sophisticated than Indonesia's Bank Central Asia or CIMB Bank in corporate governance (requiring repeated government intervention). Eg. Overnight Yuan borrowing rate hit a shocking 66% in January and 22% recently in HK. This is the most unstable IMF main-currency that the world ever had.

In Singapore, a top NTU bachelor-degree student can be given direct entry to NTU's PHD Research Programme.
China is like a TOP NTU bachelor-degree student being conferred to an honorary (no class attended) Ivy League PHD.

Going forward, China appears to be held hostage by the SDR situation.

 

[eatshitndie]

how cum euro, yen and sing dollar still so strong? artificially propped up?

 

[Runifyouhaveto]

how cum euro, yen and sing dollar still so strong? artificially propped up?

I think currencies of reputable economies in the world prefers to be weaker. It is a race to the bottom to be more competitive.

 

[eatshitndie]

I think currencies of reputable economies in the world prefers to be weaker. It is a race to the bottom to be more competitive.

but yen at 102 to usd from a low of 123 a year ago. boj and jap finance ministry jerking off each other?

 

[krafty]

I think currencies of reputable economies in the world prefers to be weaker. It is a race to the bottom to be more competitive.

but how do you explain that USD is growing from strength to strength?

 

[Runifyouhaveto]

but how do you explain that USD is growing from strength to strength?

In the past 12 months, US Dollar's share in global trade settlement increased while yuan decreased.
Both hawkish US Presidential candidates are likely to favour stronger USD.
US is thinking of rate hike while the rest of the world (including India last night) reduces rate.

 

[Runifyouhaveto]

but yen at 102 to usd from a low of 123 a year ago. boj and jap finance ministry jerking off each other?

Paiseh Japanese are doing too well.
http://www.financialsense.com/contributors/matthew-kerkhoff/why-japanese-yen-safe-haven-currency

I can give u 101 reasons why JPY will be 60 to US Dollar if WWIII breaks out.

 

[krafty]

In the past 12 months, US Dollar's share in global trade settlement increased while yuan decreased.
Both hawkish US Presidential candidates are likely to favour stronger USD.
US is thinking of rate hike while the rest of the world (including India last night) reduces rate.

thxs run! this is really interesting!

but seems rmb is more stable now, even imf is adopting it as some global currency, i think SPDR.

as for strength of USD, how can america be so strong whereas others are in hurry to depreciate their own. there is no equilibrium.

besides, all will be shunning america if USD is too strong for them. dun you think so?

thxs again!

 

[Runifyouhaveto]

Usually taper means the currency will be stronger due to reduced supply. Europe thinking of tapering this week.
That's the textbook answer.

However, the Euro could weaken to parity with USD if the ECB decides to reduce its stimulus, there might be some jitters, weakening market confidence.

 

[krafty]

Usually taper means the currency will be stronger due to reduced supply. Europe thinking of tapering this week.
That's the textbook answer.

However, the Euro could weaken to parity with USD if the ECB decides to reduce its stimulus, there might be some jitters, weakening market confidence.

i read about mario wanting to taper, it's just rumours.

 

[Runifyouhaveto]

The pound plunged as much as 6.1 percent against the dollar, the biggest decline since the day the U.K.’s Brexit referendum result was announced, in a move that traders struggled to immediately explain.
http://www.bloomberg.com/news/artic...1-percent-in-biggest-drop-since-brexit-result

 

[archcherub]

The pound plunged as much as 6.1 percent against the dollar, the biggest decline since the day the U.K.’s Brexit referendum result was announced, in a move that traders struggled to immediately explain.
http://www.bloomberg.com/news/artic...1-percent-in-biggest-drop-since-brexit-result

wah time to stock up on pounds!! :P
london holiday anyone? haha

 

[krafty]

The pound plunged as much as 6.1 percent against the dollar, the biggest decline since the day the U.K.’s Brexit referendum result was announced, in a move that traders struggled to immediately explain.
http://www.bloomberg.com/news/artic...1-percent-in-biggest-drop-since-brexit-result

they blamed it on fat fingers or trading algorithm but the timing was a bit fishy, it was just beginning of the day when even major stock market in asia haven't started. traders in sg and tokyo, i supposed was just sipping their coffee and preparing for the day. sounds like a robbery! it was about 10am in melb., i was caught in it luckily i have tight stop loss if not sure orh bak kark.:o

 

[krafty]

yesterday's nite NFP was horrible monster... all in red!

but yet, fed member says it is solid, the usual yankee self boosting confidence, i deem.

i doubt they can hike rate in november or even december, yellen will probably suck thumb and say good bye once trump win the election.