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Sixpackoverhere said...
FerFAL I don't know if you allow off topic comments but just wanted to ask you if you knew anything about the currency swap that happened between China and Argentina.
I allow anything as long as its not spam, silly childish behavior or "die FerFAL! Die!" Kind of comments :^)
They pretty much agreed on ditching the USD apparently, something they are already doing with several other "emerging "(3rd wolrd) countries.
Guess it's China's plan B experiment.
The market here in Argentina didn't react well, and the USd went up even more, when the idea was to stop it.
The world still consieders teh USD to be pretty strong, compared to other paper currencies.
I'll see if I can dig up an article explaining things better later on.
Take care.
Edited to add: Yes, apparently that it. SO far they agreed on U$S 10.000 millions, both countries agree on traditing with either of their local currencies and leaving the USD behind.
Seems China is willing to ditch the dollar with its minor league players.
This has been viewes negatively here in fear of Made in China prodcuts flooding the market and destroying the local industry.
FerFAL
12 comments:
"This has been viewes negatively here in fear of Made in China prodcuts flooding the market and destroying the local industry."
You'd better believe it, mate. It fueled a boom here in the States, but it's all coming home to roost in automotive states now.
That could be bad for us for obvious reasons. It could be bad for the world because sudden and drastic changes almost never lead to shiny happy things.
One advantage the dollar has that it is actually backed by some value. A lot of countries the currency isn't backed by anything.
Joseph, I thought the U.S. dollar is essentially backed by the assets of U.S. citizens. How valuable is the labor, property and wealth of American citizens? How good is the full faith of the U.S.? I suppose world currency markets quantify this value continually.
Handy, brief article from what I think is a libertarian point of view at:
nolanchart [dot] com/article1094 [dot] html
Joseph said...
One advantage the dollar has that it is actually backed by some value.
I didn't know that. What is backed by?
I didn't know that. What is it backed by?
Nothing but a printing press.
If you consider the dollar backed by the assets of US citizens, it's a lot of assets. And Fort Knox, while it doesn't contain near enough gold to back all the dollars, is a good deal better than nothing at all.
Look at it this way: The US dollar spends in a lot of places. Kenyan, Iranian, Colombian, Saudi Arabian, etc. for the most part don't.
US dollar still is the world's reserve currency. Gotta have dollars to buy oil, etc.
There's some value in that. Not sure how long though...
The bankers (who run the world) have bank reserves in US dollars and gold. My reserves are in US dollars and gold until the bankers change their holdings.
I stopped buying Made In China products
Re Weaseldog's question: "I didn't know that. What is [the dollar] backed by? "
About 10,000 nuclear warheads. Heh heh heh
The European Union is steadily increasing its bullion reserve as part of its long standing economic policy, by requiring the central banks to increase bullion holdings. Thus, the Euro is somewhat backed by bullion.
In the long term, Argentina's move can be seen as ahead of its day, because the Chinese Yuan is indexed to a basket of currencies, somewhat reflective of global economic conditions. So if Argentina ties itself to a mix of currencies instead of a single one, it may be more stable in the long haul. Argentina will also avoid the risk of the dollar not being the global reserve currency in the near future.
On the other hand, China is facing quite a bit of internal stress right now. So that's another risky scenario Argentina now faces.
Anonymous said...
I stopped buying Made In China products.
I bet your house is empty then. ;-)
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