Comments for big island http://big.com.au/wordpress the view from Australia Thu, 09 Sep 2010 11:01:03 +0000 http://wordpress.org/?v=2.3.1 Comment on Death of the Dollar by david http://big.com.au/wordpress/?p=1#comment-9283 david Wed, 07 Oct 2009 03:09:25 +0000 http://big.com.au/wordpress/?p=1#comment-9283 Half a decade later, the mainsteam media have this piece of original investigative reporting: <b>The demise of the dollar</b> In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading By Robert Fisk Tuesday, 6 October 2009 Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years. Related articles * Econoblog: The markets have spoken on the future of the dollar * Leading article: The end of the dollar spells the rise of a new order * Sean O'Grady: China will overtake America, the only question is when The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security." This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves. The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states. Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East. China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures. Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro. Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency. The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar." Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018. The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets. "These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate." Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq. Half a decade later, the mainsteam media have this piece of original investigative reporting:

The demise of the dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

Tuesday, 6 October 2009

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars.

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
Related articles

* Econoblog: The markets have spoken on the future of the dollar
* Leading article: The end of the dollar spells the rise of a new order
* Sean O’Grady: China will overtake America, the only question is when

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China’s former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. “Bilateral quarrels and clashes are unavoidable,” he told the Asia and Africa Review. “We cannot lower vigilance against hostility in the Middle East over energy interests and security.”

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region’s conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. “One of the legacies of this crisis may be a recognition of changed economic power relations,” he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China’s extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America’s power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China’s growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China’s reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America’s trading partners have been left to cope with the impact of Washington’s control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. “The Russians will eventually bring in the rouble to the basket of currencies,” a prominent Hong Kong broker told The Independent. “The Brits are stuck in the middle and will come into the euro. They have no choice because they won’t be able to use the US dollar.”

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years’ time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

“These plans will change the face of international financial transactions,” one Chinese banker said. “America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.”

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

]]> Comment on Death of the Dollar by Anonymous http://big.com.au/wordpress/?p=1#comment-4935 Anonymous Thu, 14 Feb 2008 05:44:57 +0000 http://big.com.au/wordpress/?p=1#comment-4935 Iran's Oil Bourse Will Start Operations Feb. 17, IRNA Reports By Ayesha Daya Feb. 13 (Bloomberg) -- Iran's oil exchange will start operations on Feb. 17, the official Iranian news agency IRNA said, citing the country's oil minister. The Iranian rial will be used for all transactions on the Tehran Oil Bourse, Gholamhossein Nozari said today, according to IRNA. Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, was originally expected to start its own oil-trading market in 2005. To contact the reporter on this story: Ayesha Daya in Dubai Iran’s Oil Bourse Will Start Operations Feb. 17, IRNA Reports

By Ayesha Daya

Feb. 13 (Bloomberg) — Iran’s oil exchange will start operations on Feb. 17, the official Iranian news agency IRNA said, citing the country’s oil minister.

The Iranian rial will be used for all transactions on the Tehran Oil Bourse, Gholamhossein Nozari said today, according to IRNA.

Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, was originally expected to start its own oil-trading market in 2005.

To contact the reporter on this story: Ayesha Daya in Dubai

]]> Comment on Death of the Dollar by david http://big.com.au/wordpress/?p=1#comment-3893 david Sun, 27 Jan 2008 23:14:25 +0000 http://big.com.au/wordpress/?p=1#comment-3893 January 2008 <strong>Saudi to debate riyal-dollar peg </strong> RIYADH: Saudi Arabia's finance minister and central bank governor will appear before a council to discuss the riyal's peg to the US dollar and a surge in inflation, a council member said yesterday. Inflation in Saudi, which pegs its riyal to the dollar, rose to a 16-year high of 6.5 per cent in December, partly driven by a rise in global commodity prices and the declining US currency. The Shura Council, whose members are appointed by King Abdullah, will meet Finance Minister Ibrahim Al Assaf and Saudi Arabian Monetary Agency governor Hamad Saud Al Sayyari on February 10, Mohammad Al Zulfa said. "The finance minister and the central bank governor were invited to debate these issues, discuss this dollar peg debate, its repercussion and what the government plans to do about it," Zulfa said. The 120-member Shura can review draft legislation and make recommendations, which are not binding on the government. Saudi Arabia has been trying to offset the effect of higher prices on its 25 million people through measures such as subsidies on imported rice and baby milk, introduced last month by order of the king. Debate in the Gulf about dollar pegs has intensified because they force central banks to track US monetary policy at a time when the Federal Reserve is cutting interest rates in an effort to stimulate the US economy. Inflation is now above official interest rates. The negative real interest rate environment could deepen if the Fed cuts again when it meets this week. source: http://www.gulf-daily-news.com/Story.asp?Article=207044&Sn=BUSI&IssueID=30314 January 2008

Saudi to debate riyal-dollar peg
RIYADH: Saudi Arabia’s finance minister and central bank governor will appear before a council to discuss the riyal’s peg to the US dollar and a surge in inflation, a council member said yesterday.

Inflation in Saudi, which pegs its riyal to the dollar, rose to a 16-year high of 6.5 per cent in December, partly driven by a rise in global commodity prices and the declining US currency.

The Shura Council, whose members are appointed by King Abdullah, will meet Finance Minister Ibrahim Al Assaf and Saudi Arabian Monetary Agency governor Hamad Saud Al Sayyari on February 10, Mohammad Al Zulfa said.

“The finance minister and the central bank governor were invited to debate these issues, discuss this dollar peg debate, its repercussion and what the government plans to do about it,” Zulfa said.

The 120-member Shura can review draft legislation and make recommendations, which are not binding on the government.

Saudi Arabia has been trying to offset the effect of higher prices on its 25 million people through measures such as subsidies on imported rice and baby milk, introduced last month by order of the king.

Debate in the Gulf about dollar pegs has intensified because they force central banks to track US monetary policy at a time when the Federal Reserve is cutting interest rates in an effort to stimulate the US economy.

Inflation is now above official interest rates. The negative real interest rate environment could deepen if the Fed cuts again when it meets this week.

source: http://www.gulf-daily-news.com/Story.asp?Article=207044&Sn=BUSI&IssueID=30314

]]> Comment on Death of the Dollar by david http://big.com.au/wordpress/?p=1#comment-934 david Sat, 27 Oct 2007 10:08:18 +0000 http://big.com.au/wordpress/?p=1#comment-934 <strong>Gold Climbs to 27-Year High as Oil Surges, Dollar Declines </strong> By Pham-Duy Nguyen Oct. 26 (Bloomberg) -- Gold rose to the highest since 1980 after crude oil surged to a record and the dollar fell to the lowest ever against the euro, boosting the appeal of the precious metal as an investment. Silver also gained. Gold has rallied 23 percent this year, heading for the seventh straight annual gain, as a weak dollar and rising energy costs sparked demand for an inflation hedge. Investment in the StreetTracks Gold Trust, an exchange-traded fund backed by bullion, is up 31 percent this year to a record 594 metric tons. ``Investors have to have a way to hedge inflationary risks, and gold is perhaps the best vehicle to accomplish that,'' said Matt Zeman, metals trader at LaSalle Futures Group Inc. in Chicago. Gold futures for December delivery rose $16.50, or 2.1 percent, to close at $787.50 an ounce on the Comex division of the New York Mercantile Exchange. After the end of floor trading, the price reached $789.50, the highest for a most-active contract since Jan. 21, 1980, the day gold reached a record $873. Silver futures for December delivery jumped 37.5 cents, or 2.7 percent, to $14.28 an ounce. The metal is up 10 percent this year. Crude-oil futures reached a record $92.22 a barrel today after the U.S. accused Iran's military of supporting terrorism. Iran is the world's second-largest holder of oil reserves. After the Middle East country cut supplies in the late 1970s, oil costs doubled in a year, triggering a surge in the inflation rate and demand for gold. ``The idea that the next war is around the corner and that this one will impair oil supplies, as opposed to securing them, has the crowd on edge,'' said Jon Nadler, an analyst at Kitco Minerals & Metals Co. in Montreal. Middle East Demand Gold also gained on speculation that investors in the Middle East will buy the metal, instead of U.S. Treasuries, should conflict escalate in the region. ``This is safe-haven buying because of the potential for an expanded conflict in the Middle East,'' said Frank McGhee, head metals trader at Integrated Brokerage Services LLC in Chicago. ``If you're full of petro-dollars, and they're going to ease U.S. interest rates again, you're going to put your money in euros or gold.'' Gold demand in the Middle East rose 20 percent to 97.5 metric tons in the second quarter from a year earlier, according to the latest figures from the producer-funded World Gold Council. The dollar fell to $1.4393 against the euro, the lowest ever, on speculation the Federal Reserve will cut interest rates again this year. The Fed lowered the overnight lending rate 0.5 percentage point to 4.75 percent on Sept. 18, the first cut in four years. Interest-rate futures show a 94 percent chance the Fed will reduce the rate to 4.5 percent by Oct. 31, up from an 86 percent chance yesterday. Last year, gold gained 23 percent while the dollar fell 10 percent against the euro. The dollar has declined 8.3 percent against the euro so far this year. Gold Climbs to 27-Year High as Oil Surges, Dollar Declines

By Pham-Duy Nguyen

Oct. 26 (Bloomberg) — Gold rose to the highest since 1980 after crude oil surged to a record and the dollar fell to the lowest ever against the euro, boosting the appeal of the precious metal as an investment. Silver also gained.

Gold has rallied 23 percent this year, heading for the seventh straight annual gain, as a weak dollar and rising energy costs sparked demand for an inflation hedge. Investment in the StreetTracks Gold Trust, an exchange-traded fund backed by bullion, is up 31 percent this year to a record 594 metric tons.

“Investors have to have a way to hedge inflationary risks, and gold is perhaps the best vehicle to accomplish that,” said Matt Zeman, metals trader at LaSalle Futures Group Inc. in Chicago.

Gold futures for December delivery rose $16.50, or 2.1 percent, to close at $787.50 an ounce on the Comex division of the New York Mercantile Exchange. After the end of floor trading, the price reached $789.50, the highest for a most-active contract since Jan. 21, 1980, the day gold reached a record $873.

Silver futures for December delivery jumped 37.5 cents, or 2.7 percent, to $14.28 an ounce. The metal is up 10 percent this year.

Crude-oil futures reached a record $92.22 a barrel today after the U.S. accused Iran’s military of supporting terrorism. Iran is the world’s second-largest holder of oil reserves. After the Middle East country cut supplies in the late 1970s, oil costs doubled in a year, triggering a surge in the inflation rate and demand for gold.

“The idea that the next war is around the corner and that this one will impair oil supplies, as opposed to securing them, has the crowd on edge,” said Jon Nadler, an analyst at Kitco Minerals & Metals Co. in Montreal.

Middle East Demand

Gold also gained on speculation that investors in the Middle East will buy the metal, instead of U.S. Treasuries, should conflict escalate in the region.

“This is safe-haven buying because of the potential for an expanded conflict in the Middle East,” said Frank McGhee, head metals trader at Integrated Brokerage Services LLC in Chicago. “If you’re full of petro-dollars, and they’re going to ease U.S. interest rates again, you’re going to put your money in euros or gold.”

Gold demand in the Middle East rose 20 percent to 97.5 metric tons in the second quarter from a year earlier, according to the latest figures from the producer-funded World Gold Council.

The dollar fell to $1.4393 against the euro, the lowest ever, on speculation the Federal Reserve will cut interest rates again this year.

The Fed lowered the overnight lending rate 0.5 percentage point to 4.75 percent on Sept. 18, the first cut in four years. Interest-rate futures show a 94 percent chance the Fed will reduce the rate to 4.5 percent by Oct. 31, up from an 86 percent chance yesterday.

Last year, gold gained 23 percent while the dollar fell 10 percent against the euro. The dollar has declined 8.3 percent against the euro so far this year.

]]> Comment on Death of the Dollar by david http://big.com.au/wordpress/?p=1#comment-482 david Thu, 04 Oct 2007 10:39:50 +0000 http://big.com.au/wordpress/?p=1#comment-482 <strong>The dollar is going down as a reserve currency, and the eurozone is not big enough to take up the burden. These moves appear to me to be the establishment of an independent Western Pacific alternative to the current structure. </strong> <em>Projection: Less Chinese dollar holdings going to US bonds, and more into real estate, solid companies with real assets etc.</em> China/Japan deal: <strong>China, Japan renew currency swap agreement </strong> www.chinaview.cn 2007-09-22 17:04:33 BEIJING, Sept. 22 (Xinhua) -- China and Japan has renewed their currency swap agreement, according to a statement released by the People's Bank of China. China's central bank governor Zhou Xiaochuan and Bank of Japan governor Toshihiko Fukui signed the agreement in Tokyo on Sept. 20. The agreement was sponsored in 2002 as part of the Chiang Mai agreement to head off a repeat of Asia's 1997/98 financial crisis. Under the Chiang Mai accord, named after the northern Thai resort town where it was signed, regional central banks agreed to make hard currency available to fend off speculative attacks. The agreement had played an important role in strengthening regional financial cooperation in East Asia, maintaining regional financial market stability and promoting East Asian economic development, said the statement. Zhou and Toshihiko Fukui also exchanged views on the two country's latest economic and financial situation, global financial problems and other topics of mutual interest, according to the statement. The dollar is going down as a reserve currency, and the eurozone is not big enough to take up the burden. These moves appear to me to be the establishment of an independent Western Pacific alternative to the current structure.

Projection: Less Chinese dollar holdings going to US bonds, and more into real estate, solid companies with real assets etc.

China/Japan deal:

China, Japan renew currency swap agreement

www.chinaview.cn 2007-09-22 17:04:33

BEIJING, Sept. 22 (Xinhua) — China and Japan has renewed their currency swap agreement, according to a statement released by the People’s Bank of China.

China’s central bank governor Zhou Xiaochuan and Bank of Japan governor Toshihiko Fukui signed the agreement in Tokyo on Sept. 20.

The agreement was sponsored in 2002 as part of the Chiang Mai agreement to head off a repeat of Asia’s 1997/98 financial crisis.

Under the Chiang Mai accord, named after the northern Thai resort town where it was signed, regional central banks agreed to make hard currency available to fend off speculative attacks.

The agreement had played an important role in strengthening regional financial cooperation in East Asia, maintaining regional financial market stability and promoting East Asian economic development, said the statement.

Zhou and Toshihiko Fukui also exchanged views on the two country’s latest economic and financial situation, global financial problems and other topics of mutual interest, according to the statement.

]]> Comment on Death of the Dollar by david http://big.com.au/wordpress/?p=1#comment-480 david Thu, 04 Oct 2007 10:35:49 +0000 http://big.com.au/wordpress/?p=1#comment-480 <em>China issues treasury bonds</em> Editor: Lin Li BEIJING, Sept. 24 (Xinhua) -- About 35 billion yuan of ten-year special treasury bonds were released on Monday, the second batch of a total 200 billion yuan in treasury bonds to be made available to the general public. The Chinese Ministry of Finance launched the first batch of 15-year special treasury bonds valuing 31.97 billion yuan on Sept. 18. The ministry said the second batch of bonds, on offer from Sept. 24-26, have an annual yield of 4.46 percent, and will be tradable from Sept. 28 through the national inter-bank bond market and stock markets. Another batch of 32-billion-yuan bonds will be issued from Sept. 27 to Oct. 9 and will be tradable from Oct. 12, said the ministry. The ministry announced on Sept. 10 that it would issue 200 billion yuan in special treasury bonds as part of a plan to raise 1.55 trillion yuan to fund the country's new foreign exchange investment firm. "The bond selling to the public will help ease liquidity, prevent the economy from overheating and strengthen the macro-control policy," the ministry said. The special treasury bonds will be issued in two groups, with the first 100 billion yuan to be issued this month in three phases, while the sale of the remaining 100 billion yuan is scheduled for the fourth quarter. Private investors can trade the bonds through the pilot commercial banks - branches of the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank, said the ministry. In June, China's legislature approved the issuance of 1.55 trillion yuan of special treasury bonds by the Ministry of Finance to buy 200 billion U.S. dollars of the foreign exchange reserve for a state investment firm to better use the country's huge foreign exchange reserves. At the end of August, the ministry issued 600 billion yuan of special treasury bonds targeting the country's commercial banks with an annual interest rate of 4.3 percent. ( One U.S. dollar equals to 7.51 yuan) China issues treasury bonds
Editor: Lin Li
BEIJING, Sept. 24 (Xinhua) — About 35 billion yuan of ten-year special treasury bonds were released on Monday, the second batch of a total 200 billion yuan in treasury bonds to be made available to the general public.

The Chinese Ministry of Finance launched the first batch of 15-year special treasury bonds valuing 31.97 billion yuan on Sept. 18.

The ministry said the second batch of bonds, on offer from Sept. 24-26, have an annual yield of 4.46 percent, and will be tradable from Sept. 28 through the national inter-bank bond market and stock markets.

Another batch of 32-billion-yuan bonds will be issued from Sept. 27 to Oct. 9 and will be tradable from Oct. 12, said the ministry.

The ministry announced on Sept. 10 that it would issue 200 billion yuan in special treasury bonds as part of a plan to raise 1.55 trillion yuan to fund the country’s new foreign exchange investment firm.

“The bond selling to the public will help ease liquidity, prevent the economy from overheating and strengthen the macro-control policy,” the ministry said.

The special treasury bonds will be issued in two groups, with the first 100 billion yuan to be issued this month in three phases, while the sale of the remaining 100 billion yuan is scheduled for the fourth quarter.

Private investors can trade the bonds through the pilot commercial banks - branches of the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank, said the ministry.

In June, China’s legislature approved the issuance of 1.55 trillion yuan of special treasury bonds by the Ministry of Finance to buy 200 billion U.S. dollars of the foreign exchange reserve for a state investment firm to better use the country’s huge foreign exchange reserves.

At the end of August, the ministry issued 600 billion yuan of special treasury bonds targeting the country’s commercial banks with an annual interest rate of 4.3 percent. ( One U.S. dollar equals to 7.51 yuan)

]]> Comment on Death of the Dollar by david http://big.com.au/wordpress/?p=1#comment-479 david Thu, 04 Oct 2007 10:33:10 +0000 http://big.com.au/wordpress/?p=1#comment-479 <em<Dollar's double blow from Vietnam and Qatar</em> By Ambrose Evans-Pritchard Last Updated: 12:12am BST 04/10/2007 Vietnam is planning to cut its purchases of US Treasuries and other dollar bonds, raising fears that Asian central banks with control over two thirds of the world's foreign reserves may soon join the flight from US assets. Fears of dollar collapse as Saudis take fright China threatens `nuclear option' of dollar sales Jump off the deranged bull now The Saigon Times said this morning that the State Bank of Vietnam was abandoning the attempt to hold down the Vietnamese currency through heavy purchases of dollars. The policy is causing the economy to overheat, driving up inflation to 8.8pc. advertisement Vietnam, which has mid-sized reserves of $40bn, is seen as weather vane for the bigger Asian powers. Together they hold $3,575bn of foreign reserves, over 65pc of the world's total. China leads with $1,340bn, but South Korea, Taiwan, Singapore, and even Thailand all built up massive holdings. The concern is that once one or two members of the region jump ship, it could set off a broader scramble. None of them want to be the last one left holding a devalued asset. Vietnam's central bank said this week that it would move "gradually" to a floating currency. Separately, the gas-rich Gulf state of Qatar announced that it had cut the dollar holdings of its $50bn sovereign wealth fund from 99pc to 40pc, switching into investments in China, Japan, and emerging Asia. The move is intended to increase long-term returns for future generations, but it can easily be seen as a vote of no confidence in US economic management. The drastic shift by the Qatar Investment Authority is a warning that petro-dollar powers with some $3,500bn under management may pull the plug on the heavily endebted US economy -- which needs to suck in the majority of the world's savings just to stay afloat. "OPEC and Asia have been the two blocks funding the US current account deficit," said Hans Redeker, currency chief at BNP Paribas. "Vietnam is a relatively small country but it is symptomatic of Asia. The entire region is seeing inflation move up as a result of mercantilist policies of holding down their currencies with 'dirty floats', which are designed to help their export sectors. They need to change monetary policy, " he said. There have been reports that China is already pulling out of US bonds to fund its new sovereign wealth fund. Foreign central banks slashed holdings by $32bn in the last two weeks of August. We will not know which country was responsible the Treasury's TIC data is released in November. Japan also has colossal reserves, now near $914bn, but it is does not face the same inflationary threat as the rest of Asia, and is in any case an intimate military ally of the United States. It is likely to coordinate its dollar policy very closely with Washington for geo-strategic reasons. Saudi Arabia set off jitters in the currency markets last month when it decided not to cut interest rates in lockstep with the US Federal Reserve, raising doubts about its commitment to the Saudi dollar peg. But it too has strong political reasons to stick with America. Kuwait has already abandoned its peg, fearing that its economy would overheat if it continued to import America's loose monetary policies. Separately, Iran said it would soon refuse to accept dollars for its oil exports, preferring to be paid in a "more credible currency". It already receives 65pc of payments in euros and 20pc in yen, but insisted that the remaining 15pc in dollars entailed an excessive risk of devaluation. The demarche is largely policitcal, since oil is a fungible commodity and the currency markets are highly liquid. However, if a number of OPEC suppliers began demand long-term futures contracts in euros instead of dollars, this would have an impact over time. http://www.telegraph.co.uk/money/main.jhtml;jsessionid=HU3MNOZRAFXIDQFIQMGSFFOAVCBQWIV0?xml=/money/2007/10/03/bcnviet103.xml
By Ambrose Evans-Pritchard
Last Updated: 12:12am BST 04/10/2007

Vietnam is planning to cut its purchases of US Treasuries and other dollar bonds, raising fears that Asian central banks with control over two thirds of the world’s foreign reserves may soon join the flight from US assets.

Fears of dollar collapse as Saudis take fright
China threatens `nuclear option’ of dollar sales
Jump off the deranged bull now
The Saigon Times said this morning that the State Bank of Vietnam was abandoning the attempt to hold down the Vietnamese currency through heavy purchases of dollars. The policy is causing the economy to overheat, driving up inflation to 8.8pc.

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

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

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

Separately, the gas-rich Gulf state of Qatar announced that it had cut the dollar holdings of its $50bn sovereign wealth fund from 99pc to 40pc, switching into investments in China, Japan, and emerging Asia.

The move is intended to increase long-term returns for future generations, but it can easily be seen as a vote of no confidence in US economic management.

The drastic shift by the Qatar Investment Authority is a warning that petro-dollar powers with some $3,500bn under management may pull the plug on the heavily endebted US economy — which needs to suck in the majority of the world’s savings just to stay afloat.

“OPEC and Asia have been the two blocks funding the US current account deficit,” said Hans Redeker, currency chief at BNP Paribas.

“Vietnam is a relatively small country but it is symptomatic of Asia. The entire region is seeing inflation move up as a result of mercantilist policies of holding down their currencies with ‘dirty floats’, which are designed to help their export sectors. They need to change monetary policy, ” he said.

There have been reports that China is already pulling out of US bonds to fund its new sovereign wealth fund. Foreign central banks slashed holdings by $32bn in the last two weeks of August. We will not know which country was responsible the Treasury’s TIC data is released in November.

Japan also has colossal reserves, now near $914bn, but it is does not face the same inflationary threat as the rest of Asia, and is in any case an intimate military ally of the United States.

It is likely to coordinate its dollar policy very closely with Washington for geo-strategic reasons.

Saudi Arabia set off jitters in the currency markets last month when it decided not to cut interest rates in lockstep with the US Federal Reserve, raising doubts about its commitment to the Saudi dollar peg. But it too has strong political reasons to stick with America.

Kuwait has already abandoned its peg, fearing that its economy would overheat if it continued to import America’s loose monetary policies.

Separately, Iran said it would soon refuse to accept dollars for its oil exports, preferring to be paid in a “more credible currency”.

It already receives 65pc of payments in euros and 20pc in yen, but insisted that the remaining 15pc in dollars entailed an excessive risk of devaluation.

The demarche is largely policitcal, since oil is a fungible commodity and the currency markets are highly liquid.

However, if a number of OPEC suppliers began demand long-term futures contracts in euros instead of dollars, this would have an impact over time.

http://www.telegraph.co.uk/money/main.jhtml;jsessionid=HU3MNOZRAFXIDQFIQMGSFFOAVCBQWIV0?xml=/money/2007/10/03/bcnviet103.xml

]]> Comment on Death of the Dollar by david http://big.com.au/wordpress/?p=1#comment-180 david Mon, 10 Sep 2007 04:35:44 +0000 http://big.com.au/wordpress/?p=1#comment-180 If instead of dumping the US$, the Chinese use their reserves and their economy as the basis of a new alternative world banking system, all nations will be freed from the monopoly abuses perpetrated by New York. These abuses are not only economic, they are political. For example, the US would not be able to confiscate billions in Iranian or Iraqi oil revenues as they have done in the past when those countries defied the US, because the funds would not be in US banks. For more compliant countries like my own, Australia, politicians could no longer be manipulated by suggestions that votes for this political policy would mean a high credit rating and low interest rates while votes for another meant a low credit rating. Many may be wary of the newly-powerful Chinese, but for Australia, they have demonstrated in the four decades since full recognition and trade began, that they are honest businessmen, committed to win-win outcomes and mutual respect. If instead of dumping the US$, the Chinese use their reserves and their economy as the basis of a new alternative world banking system, all nations will be freed from the monopoly abuses perpetrated by New York. These abuses are not only economic, they are political. For example, the US would not be able to confiscate billions in Iranian or Iraqi oil revenues as they have done in the past when those countries defied the US, because the funds would not be in US banks.
For more compliant countries like my own, Australia, politicians could no longer be manipulated by suggestions that votes for this political policy would mean a high credit rating and low interest rates while votes for another meant a low credit rating.
Many may be wary of the newly-powerful Chinese, but for Australia, they have demonstrated in the four decades since full recognition and trade began, that they are honest businessmen, committed to win-win outcomes and mutual respect.

]]> Comment on Death of the Dollar by david http://big.com.au/wordpress/?p=1#comment-179 david Mon, 10 Sep 2007 04:35:12 +0000 http://big.com.au/wordpress/?p=1#comment-179   Last week in Australia, at the Asia Pacific Cooperation conference, the leaders of China, Russia, Japan and the US had an opportunity for private discussions. No statements were issued about Iraq or Iran or oil, but reflect on this brief report from the Sydney Morning Herald: <em>Dr Zhu Min, the executive vice-president of the Bank of China, the country's second-biggest lender, agreed a shift of financial power away from the US, now at the centre of a global storm stemming from its subprime mortgage meltdown, would lead to a "more healthy" global financial system</em>. <em>China had the capacity to become the centre of a powerful Asian financial hub, he said.</em>  

Last week in Australia, at the Asia Pacific Cooperation conference, the leaders of China, Russia, Japan and the US had an opportunity for private discussions.
No statements were issued about Iraq or Iran or oil, but reflect on this brief report from the Sydney Morning Herald:

Dr Zhu Min, the executive vice-president of the Bank of China, the country’s second-biggest lender, agreed a shift of financial power away from the US, now at the centre of a global storm stemming from its subprime mortgage meltdown, would lead to a “more healthy” global financial system.

China had the capacity to become the centre of a powerful Asian financial hub, he said.

]]> Comment on Death of the Dollar by David Hannaford http://big.com.au/wordpress/?p=1#comment-76 David Hannaford Sat, 14 Jul 2007 01:42:35 +0000 http://big.com.au/wordpress/?p=1#comment-76 Iran Asks Japan to Pay Yen for Oil, Start Immediately (Update3) By Megumi Yamanaka The Japanese oil tanker Mogamigawa July 13 (Bloomberg) -- Iran asked Japanese refiners to switch to the yen to pay for all crude oil purchases, after Iran's central bank said it is reducing holdings of the U.S. dollar. Iran wants yen-based transactions "for any/all of your forthcoming Iranian crude oil liftings," according to a letter sent to Japanese refiners that was signed by Ali A. Arshi, general manager of crude oil marketing and exports in Tehran at the National Iranian Oil Co. The request is for all shipments "effective immediately," according to the letter, dated July 10 and obtained by Bloomberg News. Full article: http://www.bloomberg.com/apps/news?pid=20601087&sid=aLaColVYu5LA&refer=worldwide Iran Asks Japan to Pay Yen for Oil, Start Immediately (Update3)

By Megumi Yamanaka

The Japanese oil tanker Mogamigawa July 13 (Bloomberg) — Iran asked Japanese refiners to switch to the yen to pay for all crude oil purchases, after Iran’s central bank said it is reducing holdings of the U.S. dollar.

Iran wants yen-based transactions “for any/all of your forthcoming Iranian crude oil liftings,” according to a letter sent to Japanese refiners that was signed by Ali A. Arshi, general manager of crude oil marketing and exports in Tehran at the National Iranian Oil Co. The request is for all shipments “effective immediately,” according to the letter, dated July 10 and obtained by Bloomberg News.

Full article: http://www.bloomberg.com/apps/news?pid=20601087&sid=aLaColVYu5LA&refer=worldwide

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