Contrary to euro and yen hikes versus the dollar, the yuan's very mild appreciation against the greenback is acting as a buffer against surging retail prices.
NEW YORK (CNNMoney.com) -- While the greenback gets beaten black and blue against power currencies such as the euro and yen, experts are crediting China's yuan for keeping American consumers from paying significantly more for a wide range of products.
China is America's largest source of consumer products, accounting last year for a sizeable 14% of all U.S. imports, which mostly included toys, clothing, footwear, furniture and electronics.
Typically, weakness in the dollar makes imports into the United States more expensive.
And given that the U.S. imported nearly $500 billion in consumer products last year, the fear has been that it's only a matter of time until retailers jack up prices to offset their cost of buying goods from overseas.
But because China's currency is more tied to the dollar than other currencies - although not as much as it used to be - it is "acting as a buffer" for consumers against rising retail prices, said Scott Hoyt, director of consumer economics with Moody's Economy.com.
Year-to-date, the yuan, which is now linked to a basket of currencies in which the dollar plays an important part, has appreciated about 3% against the U.S. currency.
Hong Kong, another important source of imports for the U.S., still has its currency pegged to the dollar. That means both currencies move in sync and therefore the dollar's weakness won't make Hong Kong imports more expensive.
By comparison, the euro has surged 18.2%, the yen has jumped 20% and the Swiss franc has risen 22.5% against the dollar over the past 12 months.
Consequently, this has made imported designer brands such as Louis Vuitton, Prada and Burberry more expensive for Americans.
But China's currency quirk isn't the only thing keeping consumer prices rise under control.
Mass market retailers such as Wal-Mart (WMT, Fortune 500) and Target (TGT, Fortune 500) have been gunshy about raising prices on everyday products at a time when they are already facing sluggish retail sales amid weakening consumer demand.
Dollar distress deepens
In this environment, Hoyt said suppliers and retailers would prefer to absorb any prices increases themselves rather than pass them on to consumers.
While food and gasoline prices have been climbing for various reasons, recent government reports show that U.S. households aren't paying much more for other types of goods.
"In the U.S., between 30% to 50% of the cost of goods is determined by marketing, shipping and storage costs," said Marc Chandler, global head of currency strategy with Brown Brothers Harriman and associate professor at New York University. "The dollar only has a marginal impact on prices and spending."
But at least one analyst remains fearful of the dollar's decline.
"A weak dollar is a factor for American consumers to the extent that it feeds inflation in consumer prices," said Frank Badillo, senior retail economist with consulting firm TNS Retail Forward.
Badillo said consumers are getting a break - for now.
"Longer term, unless the economy and the dollar improve, inflation will spread to electronics, toys and clothes," he said. "Higher prices will be passed on to consumers."
First Published: March 17, 2008: 1:55 PM EDT
Wanted in stores: Your tax rebate moneyRecession fears revived as sales tumble
quinta-feira, 20 de março de 2008
China: Shoppers' buffer vs. weak dollar
Contrary to euro and yen hikes versus the dollar, the yuan's very mild appreciation against the greenback is acting as a buffer against surging retail prices.
NEW YORK (CNNMoney.com) -- While the greenback gets beaten black and blue against power currencies such as the euro and yen, experts are crediting China's yuan for keeping American consumers from paying significantly more for a wide range of products.
China is America's largest source of consumer products, accounting last year for a sizeable 14% of all U.S. imports, which mostly included toys, clothing, footwear, furniture and electronics.
Typically, weakness in the dollar makes imports into the United States more expensive.
And given that the U.S. imported nearly $500 billion in consumer products last year, the fear has been that it's only a matter of time until retailers jack up prices to offset their cost of buying goods from overseas.
But because China's currency is more tied to the dollar than other currencies - although not as much as it used to be - it is "acting as a buffer" for consumers against rising retail prices, said Scott Hoyt, director of consumer economics with Moody's Economy.com.
Year-to-date, the yuan, which is now linked to a basket of currencies in which the dollar plays an important part, has appreciated about 3% against the U.S. currency.
Hong Kong, another important source of imports for the U.S., still has its currency pegged to the dollar. That means both currencies move in sync and therefore the dollar's weakness won't make Hong Kong imports more expensive.
By comparison, the euro has surged 18.2%, the yen has jumped 20% and the Swiss franc has risen 22.5% against the dollar over the past 12 months.
Consequently, this has made imported designer brands such as Louis Vuitton, Prada and Burberry more expensive for Americans.
But China's currency quirk isn't the only thing keeping consumer prices rise under control.
Mass market retailers such as Wal-Mart (WMT, Fortune 500) and Target (TGT, Fortune 500) have been gunshy about raising prices on everyday products at a time when they are already facing sluggish retail sales amid weakening consumer demand.
Dollar distress deepens
In this environment, Hoyt said suppliers and retailers would prefer to absorb any prices increases themselves rather than pass them on to consumers.
While food and gasoline prices have been climbing for various reasons, recent government reports show that U.S. households aren't paying much more for other types of goods.
"In the U.S., between 30% to 50% of the cost of goods is determined by marketing, shipping and storage costs," said Marc Chandler, global head of currency strategy with Brown Brothers Harriman and associate professor at New York University. "The dollar only has a marginal impact on prices and spending."
But at least one analyst remains fearful of the dollar's decline.
"A weak dollar is a factor for American consumers to the extent that it feeds inflation in consumer prices," said Frank Badillo, senior retail economist with consulting firm TNS Retail Forward.
Badillo said consumers are getting a break - for now.
"Longer term, unless the economy and the dollar improve, inflation will spread to electronics, toys and clothes," he said. "Higher prices will be passed on to consumers."
First Published: March 17, 2008: 1:55 PM EDT
Wanted in stores: Your tax rebate moneyRecession fears revived as sales tumble
NEW YORK (CNNMoney.com) -- While the greenback gets beaten black and blue against power currencies such as the euro and yen, experts are crediting China's yuan for keeping American consumers from paying significantly more for a wide range of products.
China is America's largest source of consumer products, accounting last year for a sizeable 14% of all U.S. imports, which mostly included toys, clothing, footwear, furniture and electronics.
Typically, weakness in the dollar makes imports into the United States more expensive.
And given that the U.S. imported nearly $500 billion in consumer products last year, the fear has been that it's only a matter of time until retailers jack up prices to offset their cost of buying goods from overseas.
But because China's currency is more tied to the dollar than other currencies - although not as much as it used to be - it is "acting as a buffer" for consumers against rising retail prices, said Scott Hoyt, director of consumer economics with Moody's Economy.com.
Year-to-date, the yuan, which is now linked to a basket of currencies in which the dollar plays an important part, has appreciated about 3% against the U.S. currency.
Hong Kong, another important source of imports for the U.S., still has its currency pegged to the dollar. That means both currencies move in sync and therefore the dollar's weakness won't make Hong Kong imports more expensive.
By comparison, the euro has surged 18.2%, the yen has jumped 20% and the Swiss franc has risen 22.5% against the dollar over the past 12 months.
Consequently, this has made imported designer brands such as Louis Vuitton, Prada and Burberry more expensive for Americans.
But China's currency quirk isn't the only thing keeping consumer prices rise under control.
Mass market retailers such as Wal-Mart (WMT, Fortune 500) and Target (TGT, Fortune 500) have been gunshy about raising prices on everyday products at a time when they are already facing sluggish retail sales amid weakening consumer demand.
Dollar distress deepens
In this environment, Hoyt said suppliers and retailers would prefer to absorb any prices increases themselves rather than pass them on to consumers.
While food and gasoline prices have been climbing for various reasons, recent government reports show that U.S. households aren't paying much more for other types of goods.
"In the U.S., between 30% to 50% of the cost of goods is determined by marketing, shipping and storage costs," said Marc Chandler, global head of currency strategy with Brown Brothers Harriman and associate professor at New York University. "The dollar only has a marginal impact on prices and spending."
But at least one analyst remains fearful of the dollar's decline.
"A weak dollar is a factor for American consumers to the extent that it feeds inflation in consumer prices," said Frank Badillo, senior retail economist with consulting firm TNS Retail Forward.
Badillo said consumers are getting a break - for now.
"Longer term, unless the economy and the dollar improve, inflation will spread to electronics, toys and clothes," he said. "Higher prices will be passed on to consumers."
First Published: March 17, 2008: 1:55 PM EDT
Wanted in stores: Your tax rebate moneyRecession fears revived as sales tumble
George W. Bush asistirá a los Juegos de Pekín
Washington - El presidente de Estados Unidos, George W. Bush, confirmó su asistencia a la apertura de los Juegos Olímpicos de Pekín 2008, no obstante las denuncias contra China por la represión en el Tibet, informó la Casa Blanca.
Según Bush, una eventual decisión de renunciar a los Juegos en protesta contra la represión en Tibet "debería tener que ver más a los atletas que a la política", dijo Dona Perino, portavoz de la Casa Blanca.
Bush, recordó Perino, aceptó en su momento la invitación del presidente chino Hu Jintao de concurrir a la ceremonia de apertura, en agosto próximo, porque los Juegos, según había dicho, pueden significar "una vidriera luminosa para todos los asuntos chinos".
En setiembre pasado, en el curso de un viaje a Australia, Bush había dicho que su visita a los Juegos tenía razones deportivas y no políticas.
Al mismo tiempo, la secretaria de Estado, Condoleezza Rice, pidió al ministro de Exteriores de China, Yang Jiechi, la máxima moderación para afrontar las protestas en Tibet y confió en que el gobierno de ese país iniciará un diálogo con el Dalai Lama.
Lo informó el vocero del Departamento de Estado, Sean McCormack, quien agregó que los Juegos serán una oportunidad para que China "muestre su mejor cara", no obstante los nuevos informes de represión en Lhasa, capital de Tibet.
ANSA
Según Bush, una eventual decisión de renunciar a los Juegos en protesta contra la represión en Tibet "debería tener que ver más a los atletas que a la política", dijo Dona Perino, portavoz de la Casa Blanca.
Bush, recordó Perino, aceptó en su momento la invitación del presidente chino Hu Jintao de concurrir a la ceremonia de apertura, en agosto próximo, porque los Juegos, según había dicho, pueden significar "una vidriera luminosa para todos los asuntos chinos".
En setiembre pasado, en el curso de un viaje a Australia, Bush había dicho que su visita a los Juegos tenía razones deportivas y no políticas.
Al mismo tiempo, la secretaria de Estado, Condoleezza Rice, pidió al ministro de Exteriores de China, Yang Jiechi, la máxima moderación para afrontar las protestas en Tibet y confió en que el gobierno de ese país iniciará un diálogo con el Dalai Lama.
Lo informó el vocero del Departamento de Estado, Sean McCormack, quien agregó que los Juegos serán una oportunidad para que China "muestre su mejor cara", no obstante los nuevos informes de represión en Lhasa, capital de Tibet.
ANSA
terça-feira, 18 de março de 2008
Bolivia signs gas deal with Gazprom
By Andres Schipani in La Paz
Gazprom, the Russian gas group, and YPFB, Bolivia’s state-owned energy company, on Monday signed a deal for the “exploration and exploitation” of gas reserves in the Andean country.
In its initial phase, the contract will mean a “strategic alliance” between both companies to start research in large areas – mostly in the gas-rich region of Tarija – that are thought to promise considerable reserves.
Although no official figure for the deal was issued, a Bolivian government official last year told the Financial Times the contract could amount to $2bn (€1.3bn, £1bn).
“Due to its large gas reserves, Bolivia is the country that most interests us in the region. I consider it will be the region’s leader in gas terms and our objective is to go as far as to exploit as much as we can,” Stanislav Tsygankov, the head of Gazprom’s international business department in Latin America told the Financial Times.
Bolivia has the largest reserves of natural gas in South America but is in desperate need of foreign investment in order to be able to produce and deliver gas. “We are doing the [preliminary work] that will lead us to [be able to announce] a clear volume of investments, but I can tell you that we are considering an investment of billions of dollars,” Mr Tsygankov said, without specifying an amount.
Evo Morales, Bolivia’s left-wing president, nationalised Bolivia’s hydrocarbons industry in May 2006, and fears of political instability and of the seizure of assets have been seen by many analysts as a reason for declining foreign investment in the industry. Mr Morales on Monday committed himself to respect every deal with the Russian company.
“We want good partners but not patrons; [by] following this path, today we are subscribing to an important agreement,” Santos Ramírez Valverde, interim president of YPFB, said. “Gazprom will be our partner.”
Gazprom, the Russian gas group, and YPFB, Bolivia’s state-owned energy company, on Monday signed a deal for the “exploration and exploitation” of gas reserves in the Andean country.
In its initial phase, the contract will mean a “strategic alliance” between both companies to start research in large areas – mostly in the gas-rich region of Tarija – that are thought to promise considerable reserves.
Although no official figure for the deal was issued, a Bolivian government official last year told the Financial Times the contract could amount to $2bn (€1.3bn, £1bn).
“Due to its large gas reserves, Bolivia is the country that most interests us in the region. I consider it will be the region’s leader in gas terms and our objective is to go as far as to exploit as much as we can,” Stanislav Tsygankov, the head of Gazprom’s international business department in Latin America told the Financial Times.
Bolivia has the largest reserves of natural gas in South America but is in desperate need of foreign investment in order to be able to produce and deliver gas. “We are doing the [preliminary work] that will lead us to [be able to announce] a clear volume of investments, but I can tell you that we are considering an investment of billions of dollars,” Mr Tsygankov said, without specifying an amount.
Evo Morales, Bolivia’s left-wing president, nationalised Bolivia’s hydrocarbons industry in May 2006, and fears of political instability and of the seizure of assets have been seen by many analysts as a reason for declining foreign investment in the industry. Mr Morales on Monday committed himself to respect every deal with the Russian company.
“We want good partners but not patrons; [by] following this path, today we are subscribing to an important agreement,” Santos Ramírez Valverde, interim president of YPFB, said. “Gazprom will be our partner.”
segunda-feira, 17 de março de 2008
NEW WORLD DISORDER Are Iran, Russia, China behind dollar's free-fall
WASHINGTON ? The hottest selling book in China right now is called "Currency Wars," which makes the case that the U.S. Federal Reserve is a puppet of the Rothschilds banking dynasty and it has persuaded some top officials Beijing should resist America's demands to appreciate its own undervalued currency, the yuan.
This might not be news of concern to most Americans if the U.S. dollar were not in precipitous free-fall, having reached record lows against the euro yesterday.
What would it mean if China ever threw its economic weight around by dumping dollars in a major way?
Suffice it to say it is referred to in some quarters as China's financial "nuclear option," because it would be the economic equivalent of detonating a thermonuclear weapon in the world's financial markets.
But the American dollar's fate is hardly in the hands of the Chinese alone. Other foreign parties suspected of participating in a new "Currency Cold War" are Iran, Russia and Venezuela.
Diane Francis, a financial reporter for the National Post in Canada, says it plainly and boldly: "There is a Currency Cold War being waged by Russia, Iran and various allies such as Venezuela."
The grand strategy being engineered by Vladimir Putin, she writes, is to force the use of euros as the international monetary standard as a transition to the Russian ruble.
"This is simply a monetary version of the old Cold War, minus the missiles," she writes.
Experts don't see any short-term reprieve for the falling value of the dollar. Kathy Lien, chief currency strategist with DailyFX.com in the US, told Bloomberg she expects the American dollar to slide even further, forcing more lending rates cuts in the U.S. to stave off recession.
"It seems like every single passing day we have a new record low in the dollar, and a new record high in the euro, and it's driven by the fact that U.S. data is continuing to deteriorate," she said.
If other nations do not follow the U.S. in cutting rates, the slide in the value of the dollar would most likely continue.
If the dollar trend continues spiraling downward, the risk is that nations like China ? or Japan or Saudi Arabia ? which have been buying U.S. Treasury bonds and thereby funding America's deficit, would stop that practice.
That would be the nuclear option.
China, with $1.3 trillion in foreign exchange reserves as a result of the massive and growing $260 billion U.S. trade deficit, has taken huge losses with the falling dollar, given that some 80 percent of China's $1.3 trillion in foreign reserves is held in U.S. dollar assets, largely in U.S. treasury securities.
Meanwhile, Song Hongbing, the author of China's runaway bestseller, "The Currency Wars," says he's pleasantly surprised at the 200,000 copies his book has sold. He is probably not eager to see the dollar punished as he lives in Washington, D.C.
"I never imagined it could be so hot and that top leaders would be reading it," he says during a book tour in Shanghai. "People in China are nervous about what's going on in financial markets, but they don't know how to handle the real dangers. This book gives them some ideas."
Among the research findings that shocked him most was that the Fed is a privately owned and run bank.
"I just never imagined a central bank could be a private body."
Some, meanwhile, are standing on the sidelines cheering the currency wars ? seeing them as a way of reducing the power and influence of the "imperialistic" U.S.
Rohini Hensman, who describes himself as "independent scholar, writer and activist based in India and Sri Lanka," says it's about time the U.S. got its comeuppance.
"As the bombs started falling on Iraq in 2003, I wrote and circulated an appeal entitled 'Boycott the Dollar to Stop the War!,' arguing that although the military strength of the U.S. was enormous, its economy was in a mess; with a massive gross national debt, the only reason it could finance its foreign wars and occupations was because of the inflow of over a billion dollars a day from countries accumulating foreign exchange reserves in dollars because it was the world's sole reserve currency. The denomination of the oil trade in dollars made it additionally desirable. With the advent of the euro, however, there was the possibility of an alternative world currency; therefore individuals, institutions and countries opposed to the war on Iraq should refuse to accumulate dollars or use them outside the U.S., because these were activities that helped to finance U.S.-Israeli aggression against Palestinians, Iraqis and Afghanis. After the World Social Forum meeting in 2004, the Boycott Bush Campaign adopted the dollar boycott as part of its strategy."
In early trading today, the dollar advanced slightly, prompting gold prices back from 28-year highs set yesterday. The dollar's value against a basket of six major currencies rose slightly to 77.950 from a lifetime low of 77.657 a day earlier. The dollar traded at $1.4223 per euro, stronger than a record low on Monday of $1.4283.
WND has reported the Federal Reserve is in a dilemma.
The stock market has demanded rate cuts, wanting to return to the free credit policies of the Federal Reserve that fueled the liquidity bubble that has boosted home prices and pumped the Dow Jones Industrial Average since 9/11.
Yet, the Fed giving in to stock market demands and lowering rates threatens an international dollar sell-off that could lead to a dollar collapse.
Former Fed Reserve Chairman Alan Greenspan also sparked controversy by suggesting in his recently published book, "The Age of Turbulence," the euro is rivaling the dollar as the international foreign exchange reserve currency of choice.
The Wall Street Journal recently quoted a rule of thumb advanced by Harvard University economist Kenneth Rogoff, a former chief economist for the International Monetary Fund. According to Rogoff?s "back-of-the-envelope" calculation, a 20 percent drop in the dollar's exchange value reduces Americans' income by 3 percent, adjusted by inflation.
This might not be news of concern to most Americans if the U.S. dollar were not in precipitous free-fall, having reached record lows against the euro yesterday.
What would it mean if China ever threw its economic weight around by dumping dollars in a major way?
Suffice it to say it is referred to in some quarters as China's financial "nuclear option," because it would be the economic equivalent of detonating a thermonuclear weapon in the world's financial markets.
But the American dollar's fate is hardly in the hands of the Chinese alone. Other foreign parties suspected of participating in a new "Currency Cold War" are Iran, Russia and Venezuela.
Diane Francis, a financial reporter for the National Post in Canada, says it plainly and boldly: "There is a Currency Cold War being waged by Russia, Iran and various allies such as Venezuela."
The grand strategy being engineered by Vladimir Putin, she writes, is to force the use of euros as the international monetary standard as a transition to the Russian ruble.
"This is simply a monetary version of the old Cold War, minus the missiles," she writes.
Experts don't see any short-term reprieve for the falling value of the dollar. Kathy Lien, chief currency strategist with DailyFX.com in the US, told Bloomberg she expects the American dollar to slide even further, forcing more lending rates cuts in the U.S. to stave off recession.
"It seems like every single passing day we have a new record low in the dollar, and a new record high in the euro, and it's driven by the fact that U.S. data is continuing to deteriorate," she said.
If other nations do not follow the U.S. in cutting rates, the slide in the value of the dollar would most likely continue.
If the dollar trend continues spiraling downward, the risk is that nations like China ? or Japan or Saudi Arabia ? which have been buying U.S. Treasury bonds and thereby funding America's deficit, would stop that practice.
That would be the nuclear option.
China, with $1.3 trillion in foreign exchange reserves as a result of the massive and growing $260 billion U.S. trade deficit, has taken huge losses with the falling dollar, given that some 80 percent of China's $1.3 trillion in foreign reserves is held in U.S. dollar assets, largely in U.S. treasury securities.
Meanwhile, Song Hongbing, the author of China's runaway bestseller, "The Currency Wars," says he's pleasantly surprised at the 200,000 copies his book has sold. He is probably not eager to see the dollar punished as he lives in Washington, D.C.
"I never imagined it could be so hot and that top leaders would be reading it," he says during a book tour in Shanghai. "People in China are nervous about what's going on in financial markets, but they don't know how to handle the real dangers. This book gives them some ideas."
Among the research findings that shocked him most was that the Fed is a privately owned and run bank.
"I just never imagined a central bank could be a private body."
Some, meanwhile, are standing on the sidelines cheering the currency wars ? seeing them as a way of reducing the power and influence of the "imperialistic" U.S.
Rohini Hensman, who describes himself as "independent scholar, writer and activist based in India and Sri Lanka," says it's about time the U.S. got its comeuppance.
"As the bombs started falling on Iraq in 2003, I wrote and circulated an appeal entitled 'Boycott the Dollar to Stop the War!,' arguing that although the military strength of the U.S. was enormous, its economy was in a mess; with a massive gross national debt, the only reason it could finance its foreign wars and occupations was because of the inflow of over a billion dollars a day from countries accumulating foreign exchange reserves in dollars because it was the world's sole reserve currency. The denomination of the oil trade in dollars made it additionally desirable. With the advent of the euro, however, there was the possibility of an alternative world currency; therefore individuals, institutions and countries opposed to the war on Iraq should refuse to accumulate dollars or use them outside the U.S., because these were activities that helped to finance U.S.-Israeli aggression against Palestinians, Iraqis and Afghanis. After the World Social Forum meeting in 2004, the Boycott Bush Campaign adopted the dollar boycott as part of its strategy."
In early trading today, the dollar advanced slightly, prompting gold prices back from 28-year highs set yesterday. The dollar's value against a basket of six major currencies rose slightly to 77.950 from a lifetime low of 77.657 a day earlier. The dollar traded at $1.4223 per euro, stronger than a record low on Monday of $1.4283.
WND has reported the Federal Reserve is in a dilemma.
The stock market has demanded rate cuts, wanting to return to the free credit policies of the Federal Reserve that fueled the liquidity bubble that has boosted home prices and pumped the Dow Jones Industrial Average since 9/11.
Yet, the Fed giving in to stock market demands and lowering rates threatens an international dollar sell-off that could lead to a dollar collapse.
Former Fed Reserve Chairman Alan Greenspan also sparked controversy by suggesting in his recently published book, "The Age of Turbulence," the euro is rivaling the dollar as the international foreign exchange reserve currency of choice.
The Wall Street Journal recently quoted a rule of thumb advanced by Harvard University economist Kenneth Rogoff, a former chief economist for the International Monetary Fund. According to Rogoff?s "back-of-the-envelope" calculation, a 20 percent drop in the dollar's exchange value reduces Americans' income by 3 percent, adjusted by inflation.
Dollar dives to near 13-year low vs. yen
The Fed on Sunday cut its discount rate, or its lending rate to financial institutions, by a quarter point to 3.25%.
The move only managed to give a temporary lift to the U.S. currency before it began its steep decline.
"The Fed's action is needed but it leaves the current main market problems unresolved, and there seems to be nothing that can stop this (dollar-selling) flow for now," said Masafumi Yamamoto, head of foreign exchange strategy at Royal Bank of Scotland.
The dollar fell to 95.72 yen, its lowest point since August 1995, in morning trade in Tokyo before recovering to 96.84 in the afternoon. Late Friday in New York the dollar was trading at 99.17 yen. It broke below 100 yen just last Thursday.
The euro also rose to a record against the dollar, climbing as high as $1.5851 from $1.5676 Friday.
News that JPMorgan Chase (JPM, Fortune 500) had bought rival investment bank Bear Stearns (BSC, Fortune 500) - a move aimed at averting a bankruptcy - also sparked renewed market worries about the extent of the credit crisis, sending Asian stocks tumbling.
Japan's benchmark Nikkei 225 stock index fell 3.71%, or 454.09 points, to close at 11,787.51.
The Bear Stearns news "increased players' fears about credit markets and liquidity conditions, making it increasingly difficult to build dollar-long positions," said Keiichi Iguchi, a dealer at Resona Bank.
It was hard to predict how much further the dollar may fall, as "there are no concrete policy measures from either the Japanese or U.S. governments," said Masanobu Ishikawa, manager of foreign exchange at Tokyo Forex and Ueda Harlow.
Japanese officials quickly called for calm in the currency markets, but did not announce any plans to intervene to shore up the greenback by buying up dollars.
"Excessive fluctuation is never favorable for the Japanese and world economy," Chief Cabinet Secretary Nobutaka Machimura said. "We are concerned about the current situation with currencies fluctuating too much."
The weak dollar hurts the country's key exporters by eroding their overseas earnings when repatriated to Japan.
The dollar rose against other Asian currencies. It gained 0.92% against the Philippine peso to 41.690, and 0.65% against the Singapore dollar to 1.3860. The dollar also rose 0.80% against the Taiwan dollar to 30.966.
The move only managed to give a temporary lift to the U.S. currency before it began its steep decline.
"The Fed's action is needed but it leaves the current main market problems unresolved, and there seems to be nothing that can stop this (dollar-selling) flow for now," said Masafumi Yamamoto, head of foreign exchange strategy at Royal Bank of Scotland.
The dollar fell to 95.72 yen, its lowest point since August 1995, in morning trade in Tokyo before recovering to 96.84 in the afternoon. Late Friday in New York the dollar was trading at 99.17 yen. It broke below 100 yen just last Thursday.
The euro also rose to a record against the dollar, climbing as high as $1.5851 from $1.5676 Friday.
News that JPMorgan Chase (JPM, Fortune 500) had bought rival investment bank Bear Stearns (BSC, Fortune 500) - a move aimed at averting a bankruptcy - also sparked renewed market worries about the extent of the credit crisis, sending Asian stocks tumbling.
Japan's benchmark Nikkei 225 stock index fell 3.71%, or 454.09 points, to close at 11,787.51.
The Bear Stearns news "increased players' fears about credit markets and liquidity conditions, making it increasingly difficult to build dollar-long positions," said Keiichi Iguchi, a dealer at Resona Bank.
It was hard to predict how much further the dollar may fall, as "there are no concrete policy measures from either the Japanese or U.S. governments," said Masanobu Ishikawa, manager of foreign exchange at Tokyo Forex and Ueda Harlow.
Japanese officials quickly called for calm in the currency markets, but did not announce any plans to intervene to shore up the greenback by buying up dollars.
"Excessive fluctuation is never favorable for the Japanese and world economy," Chief Cabinet Secretary Nobutaka Machimura said. "We are concerned about the current situation with currencies fluctuating too much."
The weak dollar hurts the country's key exporters by eroding their overseas earnings when repatriated to Japan.
The dollar rose against other Asian currencies. It gained 0.92% against the Philippine peso to 41.690, and 0.65% against the Singapore dollar to 1.3860. The dollar also rose 0.80% against the Taiwan dollar to 30.966.
domingo, 16 de março de 2008
Chinese buy into currency war plot
THE Battle of Waterloo. The deaths of six US presidents. The rise of Adolf Hitler. The deflation of the Japanese bubble economy, the 1997-98 Asian financial crisis and even environmental destruction in the developing world.
In a new Chinese bestseller, Currency Wars, these disparate events spanning two centuries have a single root cause: the control of money issuance through history by the Rothschild banking dynasty.
Even today, claims author Song Hongbing, the US Federal Reserve remains a puppet of private banks, which also ultimately owe their allegiance to the ubiquitous Rothschilds. Such an over-arching conspiracy theory might matter as little as the many fetid tracts that can still be found in the West about the "gnomes of Zurich" and Wall Street's manipulation of global finance.
But in China, which is in the midst of a lengthy debate about opening its financial system under US pressure, the book has become a surprise hit and is being read at senior levels of government and business.
"Some senior heads of companies have been asking me if this is all true," says Ha Jiming, chief economist of China International Capital Corp, the largest local investment bank.
The book also gives ammunition, however haywire, to many in China who argue that Beijing should resist pressure from the US and other countries to allow the yuan to appreciate.
The book's publisher, a unit of the state-owned CITIC group, says Currency Wars had sold almost 200,000 copies, with an estimated 400,000 extra pirated copies in circulation as well.
Song, an IT consultant and amateur historian who has lived in the US since 1994 and is now based in Washington, says his interest was sparked by trying to uncover what lay behind the Asian crisis in 1997. After he began blogging some of his findings, his friends suggested he find a publisher for a longer work. He professes himself surprised by the book's success.
"I never imagined it could be so hot and that top leaders would be reading it," he says during a book tour in Shanghai. "People in China are nervous about what's going on in financial markets, but they don't know how to handle the real dangers. This book gives them some ideas."
The thing that most shocked him, he says, was his "discovery" that the Fed is a privately owned and run bank. "I just never imagined a central bank could be a private body."
The Fed does describe itself "as an unusual mixture of public and private elements". While its seven governors are all appointed by the US president, private banks hold shares in its 12 regional reserve banks.
But Song ignores the government's role and argues that the Fed's key functions are ultimately controlled by five private banks, such as Citibank, all of which maintain a "close relationship" with the Rothschilds.
Song is defensive about his focus on the Rothschilds and what the book depicts as their Jewish clannishness.
"The Chinese people think that the Jews are smart and rich, so we should learn from them," he says. "Even me, I think they are really smart, maybe the smartest people on earth."
Jon Benjamin, chief executive of the Board of Deputies of British Jews, is not impressed. "The Chinese have the highest regard for what they see as Jewish intellectual and commercial acumen," he says. "This claim, however, plays to the most discredited and outmoded canards surrounding Jews and their influence."
Ha puts the book's popularity down to the decade-long stagnation in Japan and the Asian financial crisis, which he says had a profound impact on many Chinese policy makers.
Chinese officials remain deeply suspicious of advice from Western countries to open up the financial system and float the currency. "They think it is just a new way of looting developing countries," Ha says.
Song himself has been commissioned to write a number of new books to capitalise on his success: on the yen, the euro and also on China's financial system.
But he sounds hesitant about the line his future tomes might take. "This book may be totally wrong, so before the next one, I have to make sure my understanding is right," he says. "Before, I was a nobody, so I could say anything I liked, but now the situation has
In a new Chinese bestseller, Currency Wars, these disparate events spanning two centuries have a single root cause: the control of money issuance through history by the Rothschild banking dynasty.
Even today, claims author Song Hongbing, the US Federal Reserve remains a puppet of private banks, which also ultimately owe their allegiance to the ubiquitous Rothschilds. Such an over-arching conspiracy theory might matter as little as the many fetid tracts that can still be found in the West about the "gnomes of Zurich" and Wall Street's manipulation of global finance.
But in China, which is in the midst of a lengthy debate about opening its financial system under US pressure, the book has become a surprise hit and is being read at senior levels of government and business.
"Some senior heads of companies have been asking me if this is all true," says Ha Jiming, chief economist of China International Capital Corp, the largest local investment bank.
The book also gives ammunition, however haywire, to many in China who argue that Beijing should resist pressure from the US and other countries to allow the yuan to appreciate.
The book's publisher, a unit of the state-owned CITIC group, says Currency Wars had sold almost 200,000 copies, with an estimated 400,000 extra pirated copies in circulation as well.
Song, an IT consultant and amateur historian who has lived in the US since 1994 and is now based in Washington, says his interest was sparked by trying to uncover what lay behind the Asian crisis in 1997. After he began blogging some of his findings, his friends suggested he find a publisher for a longer work. He professes himself surprised by the book's success.
"I never imagined it could be so hot and that top leaders would be reading it," he says during a book tour in Shanghai. "People in China are nervous about what's going on in financial markets, but they don't know how to handle the real dangers. This book gives them some ideas."
The thing that most shocked him, he says, was his "discovery" that the Fed is a privately owned and run bank. "I just never imagined a central bank could be a private body."
The Fed does describe itself "as an unusual mixture of public and private elements". While its seven governors are all appointed by the US president, private banks hold shares in its 12 regional reserve banks.
But Song ignores the government's role and argues that the Fed's key functions are ultimately controlled by five private banks, such as Citibank, all of which maintain a "close relationship" with the Rothschilds.
Song is defensive about his focus on the Rothschilds and what the book depicts as their Jewish clannishness.
"The Chinese people think that the Jews are smart and rich, so we should learn from them," he says. "Even me, I think they are really smart, maybe the smartest people on earth."
Jon Benjamin, chief executive of the Board of Deputies of British Jews, is not impressed. "The Chinese have the highest regard for what they see as Jewish intellectual and commercial acumen," he says. "This claim, however, plays to the most discredited and outmoded canards surrounding Jews and their influence."
Ha puts the book's popularity down to the decade-long stagnation in Japan and the Asian financial crisis, which he says had a profound impact on many Chinese policy makers.
Chinese officials remain deeply suspicious of advice from Western countries to open up the financial system and float the currency. "They think it is just a new way of looting developing countries," Ha says.
Song himself has been commissioned to write a number of new books to capitalise on his success: on the yen, the euro and also on China's financial system.
But he sounds hesitant about the line his future tomes might take. "This book may be totally wrong, so before the next one, I have to make sure my understanding is right," he says. "Before, I was a nobody, so I could say anything I liked, but now the situation has
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