May 3, 2012

China wants to make the currency more flexible Rinminbi, but do not add value

China wants to make the currency more flexible Rinminbi, but do not add value. Nevertheless, the markets will react positively. The currency dispute is not so far from settled.

Confusion around the renminbi: China has announced after the weekend, more flexible for the national currency have gradually responded positively, especially the European markets. Especially export-heavy figures of the industry, including the automotive industry took off, with gains in the trading week. The euro climbed to a four-times-week high of $ 1.2467. But the fact is that the Chinese currency was revalued yet until now.


While many experts have seen the announcement over the weekend as a sign of appreciation against the dollar, Commerzbank is skeptical. It fit into the picture, that "the Chinese central bank announced further reforms to avoid a possible trade war with the United States."

On closer inspection, proving to be the opinion of the Chinese monetary authorities but did not notice an appreciation against the dollar. Other concrete steps were not announced, a limited foreign exchange expert Lutz Karpowitz of Commerzbank.

The Fed has even found that there was now due to the lower surplus in China's current account is no scope for a greater appreciation.

No relaxation in the monetary dispute

In order to justify the actions of the Chinese, the Commerzbank consider two interpretations plausible. "Either it is simply a ploy or Chinese, Beijing has decided to tie the yuan to a basket of currencies in the future," wrote Karpowitz.

Renminbi is the official name of the country's currency yuan is only the currency unit, that the real money. Often, the yuan is also incorrectly referred to as the Chinese currency.

On the Japanese stock market, the players were glad, however, that the renminbi has not yet been upgraded. Many investors are concerned that an appreciation of Chinese currency is more expensive, the Japanese yen.

As the yen did not rise, investors bought the lot and widely dispersed, which boosted the markets. Earlier, investors had assumed that the People's Republic of changes in the exchange rate against the dollar is only slowly and in the smallest possible steps.

Burden on the G-20 Summit

The notice and the return of the Chinese rowing over the weekend has potential implications for the G-20 summit in Toronto, which is imminent. The appreciation would have been put into the dispute over the trade imbalance. Now it looks as if it would give in the People's Republic is not as strong as anticipated earlier.

For almost two years, the yuan pegged to the dollar. It has entered China, especially in the United States accused of keeping its currency in the interest of exports at artificially low.

Japan staged a coup on the dollar



Japan has broken out of patience: the country wanted to watch the appreciation of the yen are no longer stand - and intervened for the first time in six years in favor of the dollar.

At a rate of 83 yen per dollar, it was the Bank of Japan seems too much: As the yen fell short in his soaring against the dollar this brand, decided to Japan for the first time in six years to intervene in the foreign exchange market.


The national flags of Japan and the United States in front of a chart that shows the price development of the yen against the dollar. Most recently, Japan, the appreciation of its currency too strong. The "Bank of Japan," intervened in the foreign exchange markets and bought dollars.

For the first time since March 2004 bought the land of dollars to stop the yen's appreciation. It was a solo Japan, Finance Minister Yoshihiko Noda confirmed on an ad-hoc press conference in Tokyo. The international partners were informed, however.

For details, he said nothing. He reiterated, however, that the government was committed to all necessary measures against too high yen exchange rate, also belonging to intervene in the foreign exchange market.

Yen at the highest level in 15 years

A government spokesman said Japan was trying to convince the U.S. and the Europeans of the need for intervention. According to traders, the Japanese central bank bought U.S. dollars at an exchange rate of around 83 yen. The yen had previously attained in Tokyo against the dollar to 82.87 yen, its highest level in 15 years.

The strong yen, especially strains the Japanese export industry and heavy burden on economic recovery difficult to Nippon. Because Japan's economy is heavily dependent on exports.

The U.S. House of Representatives decided just to introduce a tax on goods



The U.S. House of Representatives decided just to introduce a tax on goods when they are due to the devaluation of another country particularly cheap. It is an affront to China that its currency against the dollar has especially favorable. The European Union - China's largest export market - increased pressure on the People's Republic. And IMF Managing Director Dominique Strauss-Kahn warned: "Obviously, the idea spreads, currency as a political weapon."

China is the world in the pillory: The country of manipulating the yuan exchange rate in order to fuel their own exports, the reproach of America. The accusation is not without a certain irony. For if an economic power in the foreign exchange market, "war", then leads the United States. Increasingly desperate attempts by the government of President Barack Obama to boost the economy.

Fed Chairman Ben Bernanke helps: The U.S. central bank plans to further liberalize its highly expansionary monetary policy. So the Fed wants to stabilize the shaky U.S. economy. A weak currency and low interest rates should help exporters and ease the burden of public debt. Thereby aggravating the tense situation in America in the foreign exchange market. Investors wonder what the point of this policy, which was right in the crisis. But now it hurts the dollar.

Cheap red herring

And what does America? It does not return his own business, it railed against China. Not a day goes by that does not shoot an influential economist poison arrows towards Beijing, a lobbyist for U.S. companies complaining about unfair competition or a government representative of the Chinese Premier Wen Jiabao calls to revalue the yuan strong. Specifically, the fear is fueled from a grueling race to devalue.

The headlines remind us of the hot spring, when the euro had fallen into the fire of criticism and threatened to break apart. At that time agreed to speculators in London and New York: Now we get ready Europe. The attack is unsuccessful, because the EU and IMF tied a last minute rescue package. The signal was clear: we will not let the Euro-zone fail, because there are no winners.

The € opponents have understood the common currency gains in value since then. In Greece, Ireland and Spain, governments have struggled through in spite of public opposition to austerity budgets and reforms. The EU finance ministers agreed to even out that Brussels monitored in future national budgets to prevent a Greek-style routine.

Because the euro area economy returns to strength, is already thinking about the withdrawal from multi-billion dollar economic stimulus programs. And ECB chief Jean-Claude Trichet would reduce only too happy to cash flow, has been fighting with the central bank's financial crisis. That would certainly make the euro against the dollar even more.

China should remain stubbornly

Oddly enough, Europe can not appreciate this hard-won successes. Instead, they drilled into his own wounds, can be intimidated by the evil word currency war and still does in the chorus of those calling for a higher yuan exchange rate. This Europe has no need for that. Especially for the German economy, the rising euro exchange rate is still far from being a threat

Who buys German goods abroad, has determined for reasons other than affordability. And for the upturn, the growth of the global economy weighs heavy. Especially in times of crisis, China has done much to revive the global economy. Wen Jiabao is doing so well to raising the price of the yuan in small steps. A radical improvement would be not only for China but also for the rest of the world is a disaster.

America must stop looking to blame for its own economic misery for others, whether in Europe or China. The problems of the U.S. economy are not in the exchange rate of dollar, euro and yuan, but in a misguided monetary and fiscal policy and a serious lack of investment in the home.

The Fed, which has done many things right in the crisis undermines now fearful of its monetary policy with confidence into the country. The government has made in the just completed fiscal year $ 1.65 trillion national debt. The national debt is just over 94 percent of economic output, but there is no mention of saving.

Worse still: From 2006 to 2009, the investments in the U.S. have dropped by one third in the euro zone, however they put to around eight percent. The result: the capital stock of the United States crumbles. The economy has spent only ten percent of their capital in production in Germany is 20 percent. There, German companies presented her capital goods that are in demand all over the world, exchange rate or not. America should take this as an example, instead of lashing out against German export success and China's exchange rates.

The largest central banks in the world make common cause and provide the banks beyond the end of time in dollars.

How do we get our money? This question Europe's banks increasingly unsettled recently. Now the major central banks intervene: Until the coming year, they provide the banks with large U.S. currency. The stock is pleased that, especially bank stocks make significant gains.

The largest central banks in the world make common cause and provide the banks beyond the end of time in dollars. The Council of the European Central Bank (ECB) decided in consultation with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, across three businesses in U.S. dollars with a maturity of around three months of the year The stock climbed to carry out the announcement to the top. The euro rate jumped up and climbed to $ 1.3936.

Click to enlarge
The Dax responded positively to the announcement by the central banks, in large-scale dollar on the market. At the close of trading, he was with gur three percent increase. (© DAPD)
DISPLAY

In October, November and December, the banks are able to supply at a fixed interest rate of the ECB with dollars. Thus the monetary authorities want to ensure the liquidity of the banks. European banks had fallen, it increasingly difficult to borrow money in the United States. Your local business partner, especially in U.S. funds, were hesitant lent money to Europe. Reason for the reluctance was the worry that European banks could be due to the euro debt crisis in trouble.

In recent weeks, the ECB had already provided twice banks with dollars. On Wednesday it approved a payment of 575 million dollars in two banks of the euro zone. Previously on 17 August $ 500 million went to an institution. He was the first time since February that the central bank had to apply this policy instrument.

Following the announcement by the monetary authorities rose sharply at the stock market. The German benchmark DAX put in the afternoon on the Frankfurt Stock Exchange by about three percent to just under 5500 points. The bank's shares experienced a renaissance. The price of Deutsche Bank rose by twelve percent in the meantime, even more than twelve percent were there at the BNP Paribas, nine percent at Commerzbank. The French banks Credit Agricole and Societe Generale gained more than six percent.

In contrast, the dispute went to the ECB's head to the purchase of government bonds continued merrily on Thursday. Board member Lorenzo Bini Smaghi defended the purchases, saying critics from their expertise. ECB chief economist Juergen Stark, who is said to have voted against these purchases went in the evening in a speech in Vienna is not explicitly on the purchases, but said only: ". The pooling of national debt is the completely wrong way"

The ECB began the government bond purchases in May 2010 during the Greek crisis, made a break and then took it up again this summer. She has since taken over government bonds worth 143 billion euros, mainly from Italy and finally Spain. They financed the purchases indirectly heavily indebted countries, and takes risks in its own balance sheet.

Highly susceptible to volatile bond markets

Bini Smaghi said the market for government bonds take a key role in the functioning of financial markets as a whole. The criticism of the purchases was the result of "lack of economic analysis and insufficient knowledge of the crisis in which we find ourselves." It applies to prevent a liquidity problem arises from a far-reaching solvency problem.

According to the ECB's Monthly Report was threatened in early August, a similar situation as after the bankruptcy of Lehman and why are the bond purchases were resumed. The volatility in the bond markets have even reached the level of May 2010 and exceeded the state after the collapse of Lehman.

In addition to the purchases of government bonds to justify the ECB are other risks that they took during the crisis. This includes above all the collateral that banks submit to the ECB in order to refinance. "An increase in the risk of a central bank is justified in times of financial stress, when the central bank would result from inaction potentially higher risk," say the ECB's economists.

The risks should be compared to the benefits that will accrue to society. The risks would be monitored and assessed on the financial buffer of the euro system. The collateral would be submitted by the banks based on market prices every day. Moreover, the ECB would make price reductions on the collateral.

Euro falls to lowest level since September 2010



The euro is under pressure: When he was a good start into the new year, it now falls to a 16-month low. This is due to the downgrading of the creditworthiness of Hungarian and reports of new problems in the debt-ridden Greece.

The euro has fallen in the night to Monday because of concerns over the escalation of the European debt crisis in comparison to the dollar to its lowest level since September 2010. At times, the European single currency had fallen to $ 1.2666. Finally, the euro could, however, recovered slightly and hovered around the mark of 1.27 dollars.


The European currency has for days because of a further escalation of the situation in the highly indebted southern European countries under pressure after it was launched with prices over $ 1.30 in the current year.

Experts made the continuing bad news on the European debt crisis responsibility. Without a better outlook for the euro-zone there would be no real recovery for the euro, Rob Ryan said of the bank BNP Paribas. The Asian stock markets traded mostly weaker. In Japan, the markets remained closed for a holiday.

The concerns about the development of the European economy with the downgrading of the creditworthiness of Hungary again became larger. The country has now received from all three rating agencies to junk status. Also, a mirror-report that the International Monetary Fund (IMF) no longer believes that Greece can carry its debt based on the current redevelopment plans permanently cared for unrest.

Weaker in Australia, South Korea and Hong Kong-listed the major stock markets. Bucking the trend put the shares in Shanghai. The index traded just over two percent higher.

On this Monday advising Chancellor Angela Merkel (CDU) and French President Nicolas Sarkozy on the next steps in the debt crisis. This is not just about the implementation of the Fiscal Pact, which seeks to ensure that euro-zone countries and EU countries to rein in budget deficits. Berlin and Paris are working out ways for even more growth and employment.

Topic in the Chancellor's Office should also be the faltering billion-aid to Greece and the financing of the bailout ESM, which should already start in mid 2012. It is also possible that coordinate with Merkel and Sarkozy over the planned introduction of a financial transaction tax. Paris is considering going it alone if necessary. Discussions will likely also the threat of downgrading the creditworthiness of France and other euro countries.

Pimco Total Return fund with a record volume of 259 billion dollars


The run by Bill Gross, the world's largest bond fund, Total Return Fund of Pacific Investment Management Co. has reached a record volume of $ 258.7 billion. The Pimco reported on Thursday ... By Wes Goodman and Alexis Leondis

The run by Bill Gross, the world's largest bond fund, Total Return Fund of Pacific Investment Management Co. has reached a record volume of $ 258.7 billion. The Pimco's reported Thursday on its website. The asset management company based in Newport in the U.S. state of California is part of the insurer Allianz SE in Munich.

In April alone, investors pumped $ 2.7 billion into the fund, as is evident from data provided by Morningstar, Inc.. Investors sought the face of slowing economic growth in the U.S. and the debt crisis in the euro zone increased the refuge in bonds. This year is the Pimco Total Return at a yield of 4.4 percent and has beaten it to Bloomberg data, 98 percent of comparable funds.

Fixed income investments - from the Australian government bonds over U.S. Treasuries to high-yield bonds globally - have won in April, 0.7 percent of its value, reinvested interest in the calculation. The exhibit index data from Bank of America Merrill Lynch. For the first time since early 2008, the bond asset class, handed in as the only income. By comparison, the MSCI All-Country World Index lost for shares 1.1 percent, dividends included.

In the U.S., slowed economic growth from three percent in the fourth quarter to 2.2 percent in the first quarter on an annualized basis, as the U.S. Department of Commerce on 27 April said. The rating agency Standard & Poor's lowered on 26 April, the credit ratings of Spain, strengthening concerns that some states do not pay their debts.

Gross had removed more than a year, the U.S. government securities from its portfolio. But then he changed the strategy and increases the proportion of U.S. government securities until the end of January to 38 percent. As the website of Pimco is also apparent that he has subsequently broken down by the end of March, the share of Treasuries to 32 percent and it increased the mortgage loans to 53 percent of the investment volume.

In the fourth quarter, investors had withdrawn about three billion dollars from the total return. Overall, the capital outflows in 2011 totaled some five billion dollars. This is evident from data of the Fund Observer Morningstar. When investment performance of the fund came in 2011, an increase of 4.2 percent and thus lagged 69 percent behind its competitors. Gross had missed the rally in Treasuries, and instead put on riskier investments.

Munch's "The Scream" for $ 120 million auctioned

The record price exceeds all expectations. For $ 119.9 million (91.3 million euros), the painting "The Scream" by Norwegian artist Edvard Munch (1863 - 1944) has been auctioned in New York. This makes it the most expensive picture ever sold at an auction.
AUCTION RECORD
Munch's "The Scream" for $ 120 million auctioned

The picture of 1895 came at Sotheby's auction house under the hammer. The buyer is a stranger who had commanded by telephone.
The previous record was $ 106.5 million for the 2010 auctioned painting "Nude, green leaves and bust" by Pablo Picasso. Sales were previously only available in expensive private businesses, not from auctions.
The starting price of Munch's "The Scream" was 50 million dollars, experts had guessed at a retail price of approximately $ 80 million. Sotheby's had sent the painting around the world to present it to potential bidders.
The picture belonged to the Norwegian Industrial Petter Olsen, whose father was a neighbor and friend of the artist was. With the income to a new museum, an arts center and a hotel in Norway Hvitsten be built. Munch lived there, and Olsen's father.
Olsen said he had decided to sell because the moment has come, "the rest of the world to offer the chance to own this remarkable work and honor."
"The Scream" is a symbol of the anxieties of modern man. It is one of the most famous painting in the world.
The auctioned copy is one of four versions of expressionist painting and also the only one that was still privately owned.
The other versions are in the Norwegian state-owned.
The New York version is the only one whose frame was designed by the artist himself.
In addition to Picasso's "Nude, green leaves and bust" achieved so far only two other works by more than 100 million dollars: Picasso's "Boy with a Pipe" was released in 2004 for $ 104.1 million under the hammer, Alberto Giacometti's sculpture "Walking Man I" for 2010 $ 104.3 million.
As the most expensive paintings in the world is the way, "no. 5, 1948 "by Jackson Pollock. It should have been sold privately in 2006 for $ 140 million.

Stay in May and do not go away?




If you ask for a stock market wisdom, this is a well here: "Sell in May and go away". But also fits the 2012? And why can not the Eibl on its gold forecast?
We know the old "stock market adage" Sell in May and go away. Sell ​​shares in May and first wait ... (Thus was the starting point for our stock market game is a really poor).

But why the rule blindly follow? As the market develops this year, breaking a rule might be appropriate.

A major difference from last year (when the markets from May to losses for five consecutive months imports): run the financials. Banks, insurance and financial services perform better than all other industries in the S & P 500.
Then maybe this time is: Stay in May, do not go away?


Meanwhile, the little hat with seasonality, the lords Roubini, Polleit and Eibl. Have yet to say what. For example, Eibl: "The gold price will fall is determined," he says.

To May, Hugh Hendry does not even care who is already thinking about 2013 and 2014 (and final in a crash?)

And finally: A fascinating time-lapse video of the construction of Tower One in New York.

May 2, 2012

euro vs doller


The Dutch Finance Minister Jan Kees de Jager
Nothing reveals how powerful this man is. In his office wiring and sockets are located on plaster. On the walls hang angegilbte children's drawings, the desk is not the latest model. The power of Wim Suyker hiding between two file folders.

Strictly confidential much of what is in these files. Yet Suyker talking about one or the other - that part of his job. Suyker is an economist at the Central Planning Bureau. Together with his colleagues, he supervised on behalf of the government, as is the economy of the Netherlands. Then they calculate the effect of government spending and eventually declare publicly what happens in the future: will grow or shrink if the economy or their opinion. Whether a hole is created in the home. Whether the Dutch are getting richer or poorer. Because the Planning Office has at least as much prestige as this country, the Bundesbank, can make these analyzes happy politician - or plunge into real dramas.

Just have the numbers of the Bureau plan for the end of the government and provided for new elections and then casually destroys another myth: that of the powerful yet economical and economically sound Netherlands.

For years, that image had been carefully cultivated. The Netherlands were an island of stability in the middle of weakening Europe. Somehow, therefore, hardly anyone even looked at more closely. Finally, the Dutch government appeared on the European stage is still harder than the German, every cost-cutting program wanted more rigorous and each audit rule still sharper. She was economically liberal, and they always seemed to the EU in reforming and renovating run ahead without equal throw the whole welfare state on board.

But then suddenly got "4.6 percent deficit" in big red letters threatening to the website of the Bureau and to plan the warning: If the government is not solid, save the country would violate the coming year against the European Stability Pact.

Holland was suddenly in need on financial markets soared interest for Dutch government bonds in the amount. And in Europe they looked surprised to The Hague: Oh? Since tilts unexpectedly also the most important allies of the Germans into the camp of the stability of fixed shaky candidates?

Wim Suyker says emphatically: "To the south of Europe, we do not belong," Sure, there will indeed be new elections, because the populist Geert Wilders did not want to vote for the austerity budget of the government and therefore lacked the necessary majority.. But it would have in the past week, but yes a few parties agreed on a draft budget. So Brussels is made only once satisfied. As far as the positive.

Then comes the big but. "Some structural problems we still have to solve yet," says the economist, referring to: It is hard. Suyker has a long list and counts on eventually: The Dutch export structure is less favorable than the German, the competitiveness has fallen. In no European country that private debt is higher. Nowhere was subsidized by the state owned the house more generous. The retirement age is too low, the cost of health care and were growing too fast. Holland had lived beyond his means. Suyker says: "We have to reform."
Reforming? Save? We are the only ones, "thereby getting more customers, Gerrit Odink aligned. The pensioner waiting in front of Ichtuskerk in Prins Alexander, a church in a poor district of Rotterdam. Once a week there, he distributed food packets in the fellowship hall of Voedselbank (Food Bank) to the needy. Over one hundred boxes of bread, pasta, salad and biscuits Gerrit and his colleagues have now been given away. They just do not get more, while the demand is constantly growing. "Now we have a long waiting list of families who could" do the food, says Odink and assured: "We check das. we ask for, in the community, the debt advice."

Hunger in Holland? "Yes," sighs Gerrit and sits at a table in the center: He did a few years ago not even thought possible. But it would be more and more. "And if the government is now shortened again in social programs ..." The words of the retirees can hang in the air and looks around the room ostentatiously. "Talk to the" he says and takes a big man at the table. The man has fought a couple of years with the Dutch UN mission in Lebanon, is now home to no job and still has debt. Quite frankly he says: "Without the bank, I would not be satisfied."

Only in Rotterdam every week 3,000 families with the packages of food bank supplies. In the Netherlands there are obviously more wealthy people who can only be collected yet. A minority is the one that everyone says. Even the Dutch are among the wealthy Europeans, their public debt with sixty percent very low by European standards, and unemployment is low at six percent.

But the fear of relegation and the middle class has been packed. Only last weekend, the NRC Handelsblad published a survey, see black after four of five Dutch nationals in the future. "The mood is" bleak, writes the newspaper and then lists why the perceived quality of life decreases: rising costs of health care, lower benefits, declining house prices, fewer jobs, higher gasoline prices, reduced subsidies. And no relief in sight.

One reason is missing from the list, but just by the economists call increasing frequency: the private debt and its consequences. Ironically, the Dutch have become so deeply in debt as the citizens of any other European country, mainly in real estate loans. Like the Americans, the Dutch believe in ever-increasing prices. They bought homes, houses, villas.

For a long time they were given the necessary loans for very light, sometimes gave the bank even more money when the house was worth. As long as its value rose steadily, that was no problem. Moreover, the Dutch government subsidizes home ownership by the workers. Mortgage interest may be tax deductible. "So people run control optimization, rather than" pay off the loan, says Wim Suyker and supports that with his own behavior. Even in his own house he blot out his credit loan amount over the 30-year term does not, he will pay only the interest. To do otherwise is economic nonsense. From a purely private.

"Te koop," stands at a brick house in front of Ichtuskerk. For Sale. Long do these signs not only in the simpler areas, but also to the seaside promenade in the posh suburbs of Scheveningen and Wassenaar. You can hear it at all Agent: The bubble has burst.

And does this have consequences for the whole economy. Now people live in houses whose value falls. Who wants to sell or must sell, can pay off with the proceeds often no longer his home loan. Instead of getting richer, many Dutch feel so getting poorer. And that in turn pushes on the consumer mood and lifestyle. Divorce, job change, relocation: All this is complicated, if you get rid of his house at a loss.

At such a time would have a government actually do anything to stabilize the housing market. At the same time but it would have the bizarre and expensive promotion, if only because they reduce even save somewhere, as soon as possible. Both together is to square the Kreises.Dazu is then also the misery of the pension. Long were the Netherlands also for their retirement as a model for Europe, its citizens were able to secure for the same age but about three income: the state pension, private pension funds, einzahlten the employer and employee, and a very private insurance. This system was considered to be crisis-proof, but that was a fallacy. The financial crisis has created great losses in pension funds. Suddenly they could not guarantee the payment amount, and recognized the Dutch: The private provision is shaky.

"We Dutch like to say that trust comes on foot and disappeared at a gallop," says Maarten Schinkel. The journalist with the black horn-rimmed glasses and gray hair is untamed as a keen observer of moods. He is one of those you can not classify the same right or left and provoke very happy times. "The Dutch have just lost a lot of confidence. In the liberalization of markets. And "in politics, he says. It prevails even more confusion about what is right and what is still wrong economic policies.

So also many voters decided for protest parties. Schinkel believes, nevertheless, "lead on reforming no way. The retirement age will rise, if only because we are getting older. And decrease wages, or their costs, so that we on the world market to become competitive again, "But is he. Saving at any cost is not the solution, therefore helping the rigid Brussels three-percent rule, only a little: because it was critical but that the country is investing its money properly. Although the budget deficit will remain high for the time being.

Of course one can argue about such an analysis. It is precisely in the Netherlands shows even more clearly than in Greece, that it is not about "saving versus spending," but about who saves such as reforming and investing. Simple answers can be found as a damned difficult thing.

The package, which was adopted in the Dutch parliament last week, after much back and forth, but still tried to compromise but should then be cut in social spending, the retirement age and the value added tax are expected to rise. At the same time a crisis tax for the rich is planned. Whether all this is implemented, only to decide the election in September. The Social Democrats and Socialists will not take anything.

How will the story? "For the answer I need a cigarette," says Schinkel and considered. "Lige Grumme Dutch protest parties like to choose. People that are doing really badly want to offer better parties, the real solutions. Even if the are uncomfortable, "he says, adding:" If this rule is true, then we would get in the fall of a reform government that takes seriously the numbers. I would not bet on it. "

EUR / USD there remain opportunities





The harsh austerity programs in many crisis countries have now also been booming business in Germany felt. This makes the already difficult situation of the producers worsened in April, even. In the euro-zone purchasing managers' index slipped by 1.8 points from 45.9, as the Markit Institute announced on Wednesday his survey of 3000 companies. This is the worst figure since just three years away, and the barometer thus further from the 50-point mark, is signaled from the growth.

It looks bleak now made in Italy. There, the industrial index fell to 43.8 points from 47.9 points from March. This is the sharpest drop since October, when Silvio Berlusconi was in power and his country was trying to avoid reforms. Experts had only a slight decline to 47.0 points on the list.

The slump in demand from home and abroad made sure that the orders in the third-largest economy in the common currency for the past eleven months in a row on a downward slide are: with an index value of 39.2 points was the lowest level in more than three years achieved. At the same time, unemployment is rising: it reached 9.8 percent, the highest rate since the beginning of Statistics 2004th "The number of unemployed is terribly high," said ING economist Martin van Vliet. The bad news triggered losses on the European stock markets and put pressure on the euro.

"HARD HIT BY SAVING PROGRAMS"

The weakness is not limited only to crisis countries such as Spain, Greece and Italy. Only in Austria and Ireland, the barometer still signaled growth. "Since a large proportion of trade in industrial goods between the euro countries is happening, have the demand shortfall from the fighting with harsh austerity programs debt countries of southern Europe increasingly negative impact on the entire euro zone," said Williamson. "Obviously, in Germany, which show the recent production cuts there."

The business of the German industry were therefore not as bad as in nearly three years. The purchasing managers' index for the sector fell by 2.2 points to 46.2. That's the worst reading since July 2009. "The repeated demand, the companies has led to production cuts, which could be prevented even by the rapid processing of the backlog," said Markit economist Tim Moore. The company therefore had first cut since March, 2010 points.

The data are, however, in stark contrast to the monthly survey by the Ifo Institute. The Ifo business climate brightened up in April, already the sixth month in a row - mainly because of the booming industry. They assessed both their current situation and the prospects for the next six months be better, stronger and more congested in their capacity to create more jobs. Experts explain the discrepancy with the fact that Markit polls, especially large companies, while the Ifo Institute also includes smaller firms that are more robust domestic market of life and from a lower export demand affected not so strong.

Even the major export market, China does not yet again: The Purchasing Managers' Index rose for the banking giant HSBC, the emerging market to 49.3 points in April to 48.3 points in March. He was nevertheless the sixth consecutive month below 50 meters

Arkit: INDUSTRY PAYS NOT TO FAST TURNAROUND

"The euro zone industry in April slipped deeper into recession," said Markit chief economist Chris Williamson. "The fact that the face of mounting job losses so many jobs have been cut not seen for over two years indicated, moreover, suggests that the industry players do not expect as fast a turnaround."

The plight of the labor market is also the view of the official statistics significantly. Accordingly, the unemployment rate in the euro zone in March to a record high of 10.9 percent, as Eurostat announced. Even in Germany the spring recovery is weakening in the labor market: Excluding the seasonal fluctuations, the number of unemployed rose by 19,000 in April.

Euro Dollar. Category Archive 'Dollar Euro'



In the fight against the spread of European debt crisis, have the 20 leading industrialized and emerging economies (G20) is now taken further steps against it. The International Monetary Fund (IMF) will receive an increase of 430 billion dollars. The funds are available, however, all IMF member countries are available.
The 20 leading industrialized and emerging economies (G20) have agreed on an increase in the cash crisis, the International Monetary Fund (IMF) by more than 430 billion dollars. This is particularly a global spread of the European debt crisis will be contained. Basically, the funds were, however, all Member States of the funds available, the G20 finance ministers and central bank chiefs told on Friday at the IMF spring meeting in Washington. The capacity of the emergency loan fund is more than doubled.

Germany in particular had prior to the increase in European aid crisis urged the international partners to honor their commitments. Europe has done with the expansion of its two parachutes at about a trillion dollars, which was agreed upon, said Finance Minister Wolfgang Schaeuble. Now, would the IMF partners fulfill their part. If you think this was only in the European interest, mistaken, he also stressed in the face of criticism from emerging countries, but also from Canada. "The increase in resources must now be brought to a conclusion", a shift made no sense. Spain is in the financial markets come under renewed pressure - so time is running out.

Emerging countries should have more influence
A significant number of countries have made a firm commitment to raise more than 430 billion dollars for the IMF, told the G20 countries. In essence, the sum to be allocated to the Fund through bilateral loans. If the agent is assigned, according to fixed criteria, namely, risk reduction, conditionality and appropriate burden sharing with other government lenders.

G20 and the IMF's steering committee is also known IMFC on the requirement, which in 2010 adopted the IMF quota reform to the annual meeting of IMF and World Bank in October of this year to implement. Furthermore, in the view you have to check the quota formula to January 2013 and a further review of the distribution of quotas among the IMF members until January 2014.

This was received with criticism, particularly in the districts was emerging became loud. So wanted his post as Brazil is not for nothing on the table. The emerging markets pounded out in turn to break the traditional dominance of the Europeans in the Fund. Brazil recalled with emphasis on the adaptation of already pledged participation rates for emerging markets. "Some states are not particularly enthusiastic about the IMF reforms," ​​Finance Minister Guido Mantega defendant with a view of the Europeans. "They find it much easier to ask for money than quota reform to go ahead."

Following the G20 meeting, said Mantega, the Brics countries, which include not only Brazil, Russia, India, China and South Africa have decided unanimously to make the IMF more money to spend.

Resistance to the traditional dominance of the Europeans at the IMF has recently swelled strong because they have the largest voting bloc, and also provide with Christine Lagarde, the boss. The reform must be even by the U.S. Congress ratified and is due to the U.S. election campaign unlikely in the near future.

A delay in building the defensive crisis had threatened to be costly but, like the resurgence of the debt crisis in the financial markets showed. Investors doubt on Spain's long-term solvency and therefore drove the yield on ten-year bonds in the country back on a critical level of six percent, the term shall not be considered acceptable.

The U.S. dollar rose today


The U.S. dollar rose today against its major counterparts after weak data came from the investors confidence in the euro area and concerns about the outlook for global economic growth, which had an impact on the demand for risky financial instruments.

During the European morning trading, the dollar rose against the euro, EUR / USD lost 0.09% to hit 1.3095.

The sentiment against the euro came under pressure after data showed that investor confidence has dropped unexpectedly in the euro area in April and spent the ninth consecutive month in negative territory.

Sentix announced that investor confidence has declined in April compared to March, from minus 8.2 to minus 14.7. Analysts had expected that the index will decline slightly to 8.1.

The concerns about the debt crisis have also grown as the interest on Spanish bonds with 10 years maturity increased to 5.8% today, while the country will have to bring the budget deficit next year to 3% of gross domestic product.

The weaker than expected U.S. employment data on Friday to ensure ongoing doubts about the strength of economic recovery in the U.S. and also strengthened expectations that the Federal Reserve will launch a new round of quantitative easing, which weakens the dollar.

The greenback also rose against the pound, GBP / USD lost 0.16% to hit 1.5865.

Industrial data previously showed that house prices in Britain in March, the slowest decline recorded since June 2010.

The Royal Institute of Chartered Surveyors, the seasonally adjusted house price balance of minus 13 to minus 10 corrected, more than the predictions of a rise minus 12 to

The greenback also fell against the yen, although it was recorded against the Swiss franc gains. USD / JPY lost 0.28% to hit 81.26 and USD / CHF added 0.08% to hit 0.9178.

The Bank of Japan left its benchmark interest rate near zero and left untouched the program to buy yen at 30 billion yen, which was also widely expected.

The central bank said that no member has proposed additional easing, as the two-day meeting was over, even if the investors at the next meeting on 27 April expect further concessions.

The greenback rose against its Canadian, Australian and New Zealand counterparts. USD / CAD rose by 0.08% to hit 0.9984, AUD / USD lost 0.21% to hit 1.0291 and NZD / USD fell by 0.39% and was trading at 0.8185.

The sentiment on growth associated with the dollar was down, after official data showed today that China's imports have declined severely in March, which lowered the outlook for global economic growth.

China published a trade surplus of U.S. $ 5:35 billion, as imports rose by only 5.3% after it was recorded in February, an increase of 39.6%.

In Australia, a report showed that the index has risen for the business trust on March 3 after a value was recorded in the previous month of 1.

The data came after a separate report showed that new job advertisements in Australia have increased by 1% in March, was recorded in the previous month after a 3.3% increase.

The dollar index, which tracks the performance of the greenback against a fixed basket of six other major currencies, was up by 0.07% to hit 80.02.

France prior to removal of the top credit rating



France loses reportedly due to the debt crisis in the credit rating agency Standard & Poor's (S & P) its top AAA credit rating. The television station reported, citing several French government Parisian circles.


Germany escape as another country with the top AAA credit rating downgrades of, it was in EU circles. The Netherlands, Luxembourg and Belgium are thus retain their previous marks.

However, Germany is apparently soon be the only large country with a € Topbonität: In addition to France and Austria threatens to lose its AAA rating, the Financial Times wrote on Friday, citing an unnamed official. That would increase pressure on Europe in the debt crisis. The worse the credit rating, the more difficult and expensive it is for European countries to borrow money on the capital market.

On the stock markets plummeted, the courses: The Dax fell by more than two percent, the euro slipped to $ 1.2687 from up, down about two cents below its intraday high.

Even on Wall Street, it went down: After his five-month high the previous day, the Dow Jones fell by almost one percent.

URO-ZONE





A shoe shiner in front of a closed shop in Athens (Picture Archives)
The European Crisis Strategy inevitably runs contrary to their economic and political bankruptcy. Proves the economic austerity every day for their failures. Under the acute need to economise in the impoverished southerners broad population groups, economies fall into deep depressions and recessions. Politically, therefore, disappears - not surprisingly - the support for these policies. This leads to the deselection of those governments that they have propagated. This signaled the end of the previous strategy in sight. It is time to ask what would happen to the savings policy.

The concepts are already present for some time. Most recently, Paul Krugman recommended a way to and from the Institute for Macroeconomic Policy Institute (IMK) has already been discussed: declare the emergency, the European Central Bank (ECB) to government bonds from the secondary market purchases, that is from private investors, not only of the States. In fact, the ECB has a mistress of the currency of unlimited funds for this purpose. Therefore, their announcement is absolutely credible. This credibility will mean that the ECB announced the route is not far to go. A bet against a central bank in its domestic currency is hopeless. There is no panic to break out that prices could fall on government bonds, if the ECB insured credible to support the bond market.

That would be a foundation on which could develop the confidence of the markets. Politically, it would also be an act of European cohesion. Rather than be parted from each of the markets in individual countries, as demonstrated with the guarantee against price falls caused by the common central bank has a joint responsibility for the common currency. That this is not only a national but a supra-national context is happening against the backdrop of postwar European history, a historical achievement.

There is evidence of a serious minimalist approach when economists and others fare with national exercises in pathos microeconomic rationality and apparent pseudo-scientific crisis tinker with symptoms such as Target 2 and balances define the crisis as much too narrow sovereign debt crisis. The logic of this effort always leads to the conclusion that monetary union is broken - with considerable economic and political damage.

Gustav A. Horn
heads the union near the Institute of Macroeconomic Research
Here such escalations are preventable if it is decided consistently from the perspective of an overall European economy. The strengthening of the ECB may not be the only step. The euro area needs institutions that address the fundamental problem of economic disparities between Member States. It is these imbalances that divide the community currency currently economically and politically. They are the result of lapses in the individual Member States in which it has failed to meet its inflation targets. There are many causes.

In the deficit countries, were measured to high wage increases in the productivity trend, but also too much government debt in the wake of a generous fiscal policy. Private investors had to be rescued as a result of speculative bubbles with public funds. In the surplus countries, the opposite is true: for low wage increases, an overly restrictive fiscal policy and capital spending have led to the inflation target was missed and the domestic demand was weak.

All of these specific and very far from uniform causes must be corrected in the medium term and long term prevented by preventive action. It therefore requires a policy mix that leads back to the euro area on a stable path. At the same time but in the long term institutional arrangements to be addressed to prevent future crises of this kind.

May 1, 2012

Euro Dollar. Category Archive 'Dollar Euro'


Euro Dollar. Category Archive 'Dollar Euro'


They close all European stocks positive on the first day of the week in the new year. Finally, it seems that the single European currency is recovering after experts have declared the loss of 40% of its value a decade now. Investors in the celebration, but the euro is trading at 1.29 against the dollar.


Positive start in 2012.
Day very attractive to investors who have seen fluctuations in the negotiation of European stock exchanges positive after the last day of 2011 blacks, closed in positive. Despite the single European currency has lost about 40% of the value which was about 10 years old when he was introduced, the confidence of European citizens and investors do not seem to have failed. Not to mention the months of November and December saw the dissent in Britain, and a collapse of Asian stock markets and U.S. indeed caused by the instability of the single European currency.

The current trend in the financial market.
Today, for the first time after several days, European stock markets have grown significantly: even a hint of the Italian Stock Exchange hit + 5%. Well, even the Paris Bourse (which with the CAC 40 closed 1.98%), the DAX in Frankfurt rose 3 percentage points, the Milan Stock Exchange closed 2.48%. The NYSE and London are closed because of holidays, while some U.S. indexes falling into depression. The dollar has lost share of the single currency remains stable, trading at $ 1.2935. However, the euro has a list down slightly against the yen, as the Seoul stock exchange remains essentially unchanged (0.03%) despite a fall in exports are signs. The Mumbai Stock Exchange now offers its investors a 0.41% recovery, although very difficult, from the previous fall. Get the gross domestic product of Singapore, but the spread remains high in Italy (500 points).

Effects.
European shares were now quite positive today and gave money to online investors who risk their assets instead of the virtual stock market index. Despite this positive start in 2012, the price of gas goes up the food. The single European currency, unfortunately, has a much lower value than when it was introduced in the European Community, has lost about 40% of its value, creating numerous problems for consumers and those who find themselves having to pay mortgage payments much heavier. The big auction last month, the ECB has done nothing but generate higher inflation, enough to make consumers reluctant to spend during the holidays. We hope this new year brings with it a positive fluctuation of the single currency with a low cost of living. In 2011, French citizens bought fewer cars, the market, especially Italy's Fiat, fell sharply.



The use of the euro in countries outside of Europe.
Despite the single currency has lost much of its value at the year-to-market, confidence in that currency is not failed. In fact, the ECB found that the use of the euro in non-member countries is between 20 and 25%: this is a very high percentage that has made the euro as single currency traded in the world. Perhaps because many countries aspiring to join the euro zone, despite the skepticism of the British authorities who have never wanted to make portions of their sovereignty in economic and financial matters.

CANADIAN DOLLAR.







If you are a professional of the exchange or a single user you definitely need to know better one of the plusIntéressante currencies in the forex market it is very sure of the Canadian Dollar.
The history of the Canadian Dollar has undergone several changes since its creation until today, the Canadian currency to greatly evolved. We will try to give you useful information about its appearance, launching, and evolving versions.
The emergence and evolution of the Canadian Dollar:
Appearance:
The Canda was under the influence of Britain, in 1835 and is a preview of the Bank of Montreal has been issued a coin, which amounted to a franc, but is that in 1857 the Dollar Canada was officially introduced in order to facilitate exchanges with other countries including the United States. Evolution: First Canadian currency has to go through the factories in London on the day of the Royal Mint, then it was under the care of the factory Heaton Birmingham. It should be noted that part of that time wore a letter H on their lapels. And finally the true Canadian currency actually appeared in the 19th century with a portrait of Gerorges V and the slogan of Canada: maple leaf. Portraits Gerorges IV Elizabeth 2 but also reportedly on the Canadian Dollar, the rumor has done a lot of noise said that the devil was visible in the hair of the queen, the reason for which a new edition of the notes was launched.

Parts of the tickets and Canadian Dollar:
You should know the tickets are the Canadian Dollar since 1935, they were issued by the Bank of Canada. Parts are also under the control of Royal Canadian Mint (RCM), thus the current series of Canadian Dollar which was published in 2001 is named (The epic Canadian) it is the sixth series aired by the Bank of Canada. Tickets are available in five denominations, cut five, ten, twenty, fifty and one hundred Canadian dollars, all cuts have the same dimensions, but of completely different colors and images.

Exchange rates of the Canadian Dollar:
So you can get all the information on the exchange rate of Canadian Dollar, you can learn about by visiting Internet sites that offer a converter of the Canadian dollar in real time. Also note that the Canadian Dollar is a currency not pegged to the U.S. Dollar, that is to say that the exchange rate of the Canadian dollar will vary relative to the U.S. Dollar and also depend on oil prices since the Canada is an oil exporter to the United States of America, this is the reason for what is important to follow the course of the Canadian dollar so you choose the right timing to change your currency. Here are some websites where you have the exchange rate of the Canadian Dollar and other currencies: You can change money on the site fr.finance.yahoo.com ie the finance section of the site Yahoo.com, the converter it also gives you the option to convert the Canadian dollar in U.S. dollar or if you want to Sterling and Euro and Yen. The other site that offers you this is the section Exchange Capital.fr you just type the address Bourse.Capital.fr then you will have access during the Canadian Dollar relative to other currencies (Euro, U.S. Dollar, Pound Sterling, Yen ...). Finally the site Xe.com is another benchmark in the Forex, Stocks, and currency. It has a converter and a sophisticated platform that offers beautiful all the information you need in real time.

AUSTRALIAN DOLLAR vs euro.vs doller







The Australian dollar ended the year above parity with the U.S. dollar. This symbolic level had been taken temporarily in early November before the rise in tensions in the eurozone does not diminish investor appetite for risk. The same scenario was repeated early this year, and the Aussie back down near $ 0.98 U.S.. Heavy rains and floods in parts of Australia have also contributed to this decline. Consequences are particularly apprehended on the country's coal exports and economic growth in general. The Reserve Bank of Australia may well have to stay on the sidelines a little longer.

Moreover, the correction of the Australian dollar is compatible with signals that were sent by the market indicators. Momentum and net speculative positions were at levels consistent with past turning points of the Australian dollar.

On a fundamental basis, the advantages enjoyed by the Australian dollar begin to fade. Although the Australian economy remains in good shape compared to most other industrialized economies, especially when looking at employment trends, signs of strain have recently surfaced. Particular, the real GDP growth increased from 4.6% in the second quarter, annualized rate, with only 0.8% in the third quarter. This is the worst performance of the Australian economy since late 2008. The completion of government stimulus packages and interest rate hikes have not been without effect on domestic demand.

A prolonged pause in monetary tightening in Australia seems increasingly likely. The only real irritant for monetary authorities remains the high inflation rate. The annual change in consumer prices has nevertheless declined in the third quarter, to 2.8%, and inflation expectations also show a decline. This is without counting the international situation which looks less favorable to Australia in the short term. In addition to continuing tensions in the euro area, China is now showing more determined to avoid an overheating economy, which should be reflected in increased exports of Australian raw materials. Moreover, a slight decline anticipated commodity prices in the short term should reduce the effect of wealth enjoyed by Australians.

euro vs doller


Despite the shock of the financial crisis that hit the world since long, it is always possible to invest in the Forex currency market, the reason for which we must stay abreast of market changes and ups and downs of currencies, today thanks to the internet you can read market news in real time from your office or home.

Development of new technologies is the invasion of the Internet and the rapid circulation of information has made tracking the stock market in real time an easy task to do.

Indeed, many sites offer the possibility to follow live the parity of the currency of your choice, there are sites specializing in the stock market and forex, although the service offered by the websites of daily newspapers to Like the Figaro.

Sometimes there is a small shift of 3 to 5minute between the actual price and the price published by the website.

Without a computer or internet access will be very difficult to stay abreast of changes in exchange rates, for those who own a cell phone as they can download Iphone applications designed by specialized sites in Forex (cited above above), however it should be noted that despite the discrepancy may be, this way is very useful for some people.



There is yet another widely used solution is that news channels like CNBC market continuously or Bloomberg, these channels cover real-time quotes of the largest markets, although the currency. The only problem you may encounter is that these chains do not offer the dollar against all currencies but only against other major currencies: Dollar / Euro, Dollar / GBP, Dollar / Yen.




The U.S. dollar is the most traded currency in the FOREX market, one such strong point is its high liquidity because the greenback is not only used in the United States but in several markets around the world .

The U.S. dollar trading is possible on traditional foreign exchange markets as well on online trading platforms Forex the trader can choose between these two methods depending on the type of investment that would suit him.

Note that the ticket has replaced gold in international monetary system, despite competition from Asian currencies including the Japanese Yen, U.S. currency was enhanced by the opening of the New York Stock Exchange, a very significant consolidation who evaluated the number of transactions at several billion dollars a day.

The U.S. currency and all other currencies as it is influenced by certain circumstances including the behavior of financial markets within the United States, the reason for which must be taken it is recommended to include hours of opening and closing of market.

American markets offer the most useful information for traders and practices so they can perform operations successful.

However, European markets differentials between currencies values ​​are not very important, the stability of the European market is a real security to new traders and others who will not take many risks.

Stability and confidence are the most important benefits of the U.S. market, it has a direct impact on the American currency, to make investments on the U.S. Dollar stock options are the best ways to reach your purpose, but in this case it is not a simple investment in the American dollar but it is a pariage on a specific currency pair.



EDF and the U.S. Federal Reserve is the central bank of the United States of America, based in the capital Washington DC, it was created December 23, 1913 by act of the Federal Reserve, is under the direction of Mr. Ben Bernanke, the Fed as the main reason the establishment of U.S. monetary policy, it is also as politically independent European Central Bank.

The U.S. central bank must always ensure price stability, thereby facilitating U.S. economic growth, and regulation of banking united states.

The EDF consists of twelve Federal Reserve Bank that located in the largest U.S. cities like NY, Chicago, Boston, Dallas, San Francisco, Philadelphia ... the board is centrally located in the capital Washington DC, it should be noted that the Federal Reserve Bank of New York is the largest.

The U.S. Federal Reserve (FED) adopts its monetary policy following the meetings of the Monetary Policy Committee which is composed of the Governing Council with seven members selected by the President of the United States itself and approved by the Senate, the President of the FRB Governors of NY and four alternately. This committee meets regularly eight times a year, that is to say (every 6-7 weeks per year).

With two meetings, one in early and the other in the middle are very important. Both meetings exceptionally interesting that lasts two days allow the committee to discuss the Monetary Policy Report to Congress, that is a report on U.S. monetary policy that is delivered by the President of the Board of Governors before the Congress of the United united.

Since January 31, 2006 Ben Bernanke is the governor of the U.S. central bank, succeeding Alan Greenspan Governor of 08/11/1987 to 31/01/2006 and from 06/08/1979 to Paul Volker 08/11/1987.


In the middle of 2010, slowing the replenishment of stocks has revealed the fragility of the U.S. recovery: growth of household consumption certainly positive since the third quarter of 2009 but hampered by the effort of household deleveraging , job creation very moderate compared to previous cycles and historically high unemployment weighing on wages. The residential construction sector has stabilized since the mid 2009, but gives hope no sign of reversal in the short term. The dynamics of business investment remained anemic at the low level of capacity utilization from production.

This situation led the U.S. Federal Reserve, confronted with the limits of fiscal policy, to be announced in summer 2010 that it would renew its quantitative easing policy, through a vast program to purchase bonds State destined to weight (downward) on long interest rates. Support of economic policy in the activity was reinforced at the end of the year with the adoption of a budget compromise.

The bet is that of seeing the positive effects of support measures prevail, and a dynamic of self-sustaining recovery. Good growth figures for the fourth quarter (+0.8% versus the third quarter), the first tangible signs of improvement on the front of the employment and unemployment, and the sharp upward revision of growth prospects point in that direction. But the weak prospects for recovery in residential real estate, further debt relief, the slow growth in wage income and rising commodity prices pose risks to the recovery in the United States. The course of 2011 will be even more decisive than the pressure to reduce the budget deficit is growing. The conservation plan 4000 billion presented in early 2011 by President Obama to bring the federal deficit to a sustainable level (9.8% in 2011, 2% at the end of the decade) and is considered insufficient for the IMF, and Standard & Poor's has raised mid April 2011 the possibility of damaging the notes of the United States.


In theory, an international reserve currency must meet a number of conditions. Currency and must be anchored to a stable benchmark its program must be based on a series of well defined rules. The program must also be sufficiently flexible so that supply can meet at any time demand, which is largely defined by the evolution of international trade. Finally, the decision to issue the currency must be independent of economic conditions and sovereign interests of a particular country. Otherwise, it faces the words 'Triffin Paradox' (after the Belgian economist Robert Triffin). An international currency must, firstly, be stable, and therefore preferably not subject to speculation. This implies maintaining under control the amount of money in circulation. On the other hand, an international currency fulfills an international role. The amount outstanding must increase if there is an increased demand due to the intensification of international trade. The paradox is, however, that when the increase in the amount exceeds the increase in international demand, since it is only then that the reserve currency devalue

At the political agenda

The considerable funding implemented in the United States to end the financial and economic crisis and 'massive debt it entails - to call this paradox the agenda and bring many policymakers to fear a devaluation of dollar. Such a devaluation reported in short-term effect in that country through, and simultaneously reduces the real debt.

These are of course mainly countries with dollar reserve positions in important who fear such a scenario. This is, firstly, of the Petroleum Exporting Countries, given that oil is traded in dollars, and, secondly, the East Asian countries. These countries formed after the Asian Currency Crisis of important qualifications to be able to avoid a similar crisis in the future. It is also possible that the Chinese renminbi is undervalued, so the reserves are likely to increase more rapidly than would be the case with currency valued more evenly.

No wonder then that China - the country which holds the largest reserves, of which a considerable portion is denominated in dollars - has pleaded, as we approach the G20 summit, for the passage of a international financial system based on a defined national currency - without explicitly referring to the dollar - to create an international reserve currency in its own right. An idea already put forward by the economist Keynes, who argued after the Second World War to the creation of bancor (name given by Keynes in the international currency, ed.).

Demand from China is also supported by the fact that the reserve currency status of the dollar has contributed to the depth and global nature of the current crisis. Countries with a current account surplus does indeed have no choice but to invest their surplus savings in the reserve currency, as this currency is used in international trade and that these countries have bond markets more liquid. However, this has enabled the American consumerism and the rampant growth of the U.S. housing market to last longer than was desirable.

The U.S. stock market should maintain its momentum in the first half of 2010. The massive and continuing sales of U.S. stocks are simply unlikely, given the improvements in the economy of the United States, forecasts of low inflation and a rebound in corporate profits. Small investors and institutional investors own less than U.S. stocks. Cash held in the U.S. money market funds are significantly higher than historical norms and report very few investors. The U.S. Treasury securities have very little appeal outside of their defensive nature, while corporate bonds have become less attractive due to the narrowing their spreads. Low interest rates are prompting investors to resume risky assets.

We caution investors that the relationship between risk and return is not as interesting as in the first half of 2009 and they should expect more modest gains in the coming year. The U.S. dollar and interest rates in the short term will be to watch in 2010. It is possible that the economic activity of U.S. contracts again later in 2010. If the recovery of the U.S. economy continues, central banks may be forced to remove the stimulus and raise interest rates. Interest rates encourage continued growth, our pessimism about the U.S. dollar and optimism about our actions.

THE GLOBAL ECONOMY IS ON THE ROAD TO RECOVERY

In 2008 and early 2009, we experienced a synchronized contraction of the global economy and the worst decline since the Great Depression of 1929. We are now apparently at the heart of a synchronized recovery in the global economy dominated by China, reinforced by monetary and fiscal policies very stimulative, and saw improvements in the financial markets. Industrial production in several countries has plummeted in the last part de2008, but has since rebounded strongly. The global trade is starting to grow.

All the major developed economies show growth again, although the pace of this growth is expected to decline in the second half of 2010.

A caveat is needed: home foreclosures remain at record levels and a rise in mortgage interest rates could nip in the bud the nascent recovery of the housing market. In addition, the new attitude of frugality consumer concern. Note that U.S. consumers have a propensity to spend and the recession creates a substantial pent-up demand.


The beginning of the year could be a good idea of ​​what the future holds for the coming quarters. First, the U.S., the ISM index increased and sharper decline than expected unemployment rate brought a greater sense of optimism about economic growth. This further reduces the chances of a third wave of purchases of government securities by the Federal Reserve (Fed). The year also began with a surge of financial fears in the eurozone. Although steps have been taken to support countries in difficulty possible, investors should remain on the alert for some time, with effects that underpins the euro and financial markets. Finally, the increase from December 26, Chinese interest rates shows that China will take extreme measures to avoid economic overheating and excessive increase in its inflation rate. The Chinese exchange rate has also crossed the new year to a low of 17 at 6.59 yuan / U.S. $: the gradual appreciation of the yuan against the U.S. dollar is likely to continue.

LOWER RISK SHOULD discriminate against the greenback, BUT NOT NOW

During the recession, investors who have a higher risk aversion have massively turned to assets denominated in U.S. dollars, which benefited the greenback against most other currencies. Now that the crisis is behind us and that investors gradually reconnect with riskier investments, often in other currencies, it is the reverse process occurs for the U.S. currency.

THE END OF THE SECOND PROGRAM WILL HELP THE QUANTITATIVE AMERICAN CURRENCY


The Fed announced on 3 November a second wave of buying of U.S. government securities to stimulate the U.S. economy and increase inflation.

Pending the official announcement of the new measure, the dollar depreciated markedly. Quantitative monetary policies underpin a more abundant supply of liquidity and interest rates low for an extended period. They also reduce investor confidence in the currency. Indeed, there is a risk that inflation rises too when things go wrong and it causes a significant loss of purchasing power of the currency. This risk depends, however, credit growth resulting from the policy quantitatively. In this regard, the slow growth of credit outstanding in the U.S. is worrisome for the U.S. dollar in the short term.


Around the $ currency Americans, a large informal currency area has recovered since the currency crises of the late 1990s. It consists of countries using $ as an anchor currency, reference and rules of international trade, reserve and intervention. This area includes Central and South Americas, the Middle East, much of Asia and Oceania. S The above tables illustrate the global role of the dollar in parallel to that of the €. Admittedly, only a few currencies are formally linked to $: the $ Hong Kong and the Indian rupee, respectively by a peg and a managed float.

The Yuan (or Renminbi, currency of the People) Chinese is linked to a basket of currencies ($, €, Yen, Won and others) with a fluctuation band of + / - 3% around a central rate, it own reassessed every day, is actually a crawling peg against the basket. Small Central American countries are dollarized (using the dollar as national currency).

Surprisingly, since the currency crises of 1997 in Southeast Asia and Latin America in 2001, many currencies have again become stable de facto against the $. Asia:

Indonesian and Indian rupees, the Singapore dollar. The Thai baht and Korean won tend to appreciate. The Malaysian ringgit, Philippine peso and Thai baht are managed float or have a target effective exchange. In Latin America the real Brazil found its level of early 2000. The currencies of the Middle East are perfectly adjusted to the $: Jordanian dinar or Saudi riyal.

Two reasons for these links more or less closely with the voluntary and sometimes referred to as Quasi $ Bretton Woods. On the one hand, the importance of their trade with the United States or other countries in the dollar zone. More importantly, in the absence of dominant regional currency, anchor its currency to the $ is for a country a way to avoid the wretch surenc regional currency and stabilize currencies in the area between them along the lines of Bretton Woods in one form or another (peg, sliding or not, managed floating). This one seems so important in Latin America and Asia.

In particular, central banks in Asia, Japan and China in particular, intervened massively to stabilize their currencies against the $ in the post 1997 crisis.

The Chinese yuan has appreciated slightly since its managed float that could be the start of a general appreciation of Asian currencies. This will be discussed further.

Experience has shown that these stabilities obtained with arbitrary parities may often lead to sudden and severe currency crises. Especially on the occasion of sharp fluctuations of $ isolated or a variation of one of them challenging the conditions of regional competitiveness. The crises in Southeast Asia in 1997 were partly the consequence of the dollar since 1995, the Russian ruble crisis in 1998 and that of the Argentine peso in 2001 come from the contagion from one area to the other. Note that Europe remained protected from these attacks and known at that time a strong growth.

euro vs doller

It is undeniable that the euro has everything it takes to be an international currency, and therefore should gradually challenge the dollar. First, the changeover took place without problems. The euro book arrived in
early 1999. It has become slower than expected, but is now run by efficient banking systems and payments are made without any difficulties in the area. The euro cash meanwhile arrived in early 2002, and people have adopted the new notes and new parts in a few weeks. Despite the reservations and criticisms that exist here and there, it is hard to come back to notes and coins in francs. And now the euro is the currency of a country whose entire population is that the United States, whose GDP is just shy of the U.S. GDP

The euro area is even much more open than the dollar zone: the Twelve are 30% of world trade, the U.S. 15%. If we add tourism - and Europeans are traveling a lot - and even the underground economy, because the biggest euro banknote is worth five times the largest dollar ... it is clear that the euro has good reasons be used and be held beyond its borders. It may be more than one country to another we do not just trade, it also makes financial transactions. And the euro area is also very open to international finance. Direct investment or portfolio investment abroad of the Twelve are the same as those of the United States. Need we add that the financial markets in the euro area are almost as good and as well organized in the United States. Finally, the international role of the euro may grow even more than the mark, and to a lesser extent the Swiss franc or the florin, were already used outside their borders, and that the euro has naturally replaced.

But if the euro can, of course, compete with the dollar, will he actually do? How far can it replace, how long, how? It is very difficult to be precise on this point. To be used in the world, it is first necessary that the euro is requested. But behavior change slowly, the habits die hard, both households and businesses do not change easily change. Moreover, it is easier to use a single currency rather than more ... It's kind of the same problem with the language! Finally the euro will be sought that it is relatively stable and it does not depreciate against the dollar. It is known that the exchange rate of a currency does not evolve only according to "core" of an economy, it is more dependent on both capital flows which are very unstable and expectations of economic agents. We also know that the exchange rate is the value of a currency against another. The situation in the U.S. economy, its growth rate, the deficit or outside, react on the dollar ... and so on that of the euro. Any prediction is difficult. The euro was worth $ 1.17 at the start and saw that some people ended up to 1.30 three years later than 0.85 before returning close to its initial value, but for how long?

So it can be used in the world requires that the euro is also offered. Must exist in sufficient quantities, and as it is the currency of the euro area, it must "sort" of the area, as is commonly said, in that it has to be transferred by residents to nonresidents. This can be done at the discretion of the transactions in the euro area with the rest of the world. It is necessary that the twelve countries considered together import more than it exports - is currently the contrary - or they pay more than they borrow. It is then necessary a net outflow of capital, that is precisely what is happening. Their situation vis-à-vis the rest of the world and is the exact opposite of the situation of the United States that import and borrowing. These international transactions that occur annually in the balance of payments are themselves subject to large variations. Not only the Twelve can export or pay more or less than one year to another, but they could also, some years later, importing more than it exports and therefore borrow ...

Finally, the euro can not see its international role only progress if the dollar declines. There can be no more euros in use worldwide if there is - at least relatively - less dollars. Such a substitution can not be done today by the market. And it may cause price fluctuations that central banks could certainly limit, provided to cooperate, the Maastricht Treaty opened this possibility (it is Article 111, one of the most important), but it remained a dead letter for now.

Ultimately, for over four years, the euro has fluctuated widely, and its use began to grow, but it still has little substituted the dollar. A report from the European Central Bank pub in December 2002 bound us that the use of euro banknotes outside the euro remains low: 8% to 50% against the U.S. dollar, the Euro holdings account for 13% of bank assets power, against 68% for the dollar, the international bond issues in euros are up to 30%, against 44% in dollars. And the ECB may conclude that, to date, the euro remains a regional currency against the dollar, whose use is "more massive and universal