Dollar's fall against ruble continues

[La_Serpiente]

Dollar's fall against ruble continues

The weighted-average exchange rate of US currency was RUR28.98 per dollar this afternoon. The low for deals at the special trading session was RUR28.95 per dollar. These figures are lower than the official exchange rate for January 12 by RUR0.01 and RUR0.04 respectively. Therefore, the process of strengthening of Russian currency against the dollar is continuing on the market.

Dealers point out that despite the fact that commercial banks have been selling foreign currency in rather big lots of about $1m each on average, the trade volume has remained rather low at the special trading session. Participants of the Unified Trading Session sold less than $140m as of 3 p.m., which is not much higher than yesterday's level. The margin between the high and the low has now reached almost RUR0.1, which indicates the Central Bank's absence on the market.

Dollar's fall against ruble continues

[kalian]

1. And the reason is....

that Russia appears to ve ramping up its gold production, as have
other nations started backing up their currency with gold. The US
meanwhile, continues to print more dollars and doesn't back it up...
not even with shit. :eyes:

[54anickel]

3. I think discussions will start on this at the G7 meeting next month.

It could get interesting, and the news that will come from that meeting will be very carefully worded.

The "buzz" I've picked up is that there is speculation of moving from the US dollar as a reserve currency. To what is the question. Here are some of the alternatives I've caught wind of, in no particular order.

Trade and currency zones - each zone will be based on who trades with who the most. Trouble with that idea is that in this new "globalization" world, trading partners could change.

Moving to the Euro - much speculation on that, but also much disageement. Reason for is obvious, right now it's a high value and perceived to be the best choice. Arguments against, it's young, the EU is not doing well on ironing out their differences with regards to the constitution. There is no EU independent military (they are working on that but US will fight that idea - one of the reasons they are looking for something for NATO to do again). The Euro is just another fiat currency. As such, it will be prone to the same issues as the dollar. Germany did not help this perspective when they allowed their deficit to grow beyond the EU Stability Pact limit. There may be a temporary move to the Euro while the Central Banks bring their reserves in order. The SAFTA talks went very well, and the countries involved in that are not crazy about a strictly fiat currency.

Returning to a gold/silver based standard. There is a lot of talk about this, but it will take time. The PMs would need to find their true value in a non-manipulated free market. Also Central banks would need time to get their reserves in order from the years of both covert and overt gold leasing. China has been working on building their reserves lately (theirs are the lowest) as well as many other countries. Lots of speculation in the PMs now.

For the time being, the world has a vested interest in the US dollar. Abandoning it would be extremely detrimental to the world economy. They will continue to "put up with it" as they attempt to get their ducks in a row.

JMHO

[Kellanved]

4. Franco- German deficit

There is one major difference when comparing the US deficit to the European. The Europeans (especially the Germans) safe a lot of money; the Banks owe the money, not the other way round. For that reason the European economy is far less endangered by the debt, one might even argue that it's necessary to keep the money in the country and in circulation.

The debt limit is utter BS anyways; it lacks a rule for times with a bad world economy and was never meant to effect the "Big ones". That's unfair, but the European economy depends on the bigger states; especially so in the small countries.

Finally two things:
1. You are aware of the monetary errors made in Germany during the reunification? The GDR money was changed 1:1 , despite it having no value. Thus the DM in circulation was increased by about 20% without lowering the value on the international markets. The result is that the Euro is 20% too expensive in Germany; many economists see that as the main reason for the German, even the European, weakness.
2. The German deficit is smaller than anticipated. Instead of €43 billion it turned out to be €39 billion.

[54anickel]

5. Thank you.

It helps to explain the uncertainty that I've been picking up about changing to the Euro as the world's reserve currency. Always nice to have a few more details to explain the buzz.

Yes, I agree the debt limit was unrealistic and tied the banks hands too firmly. But it was part of the agreement, and now Germany/France are in the awkward position of having to defend exceeding the limit. I think that contributes to the uneasiness in the world market of adopting the Euro as a replacement for the dollar. They do not want to repeat the same mistakes with just another fiat currency for the entire world economy. Its adoption may be a temporary step to zones or PM based - maybe a combination of the two.

Again, JMHO

[Lefty48197]

2. The dollar is in the toilet

weakest dollar ever. weakest president ever. coincidence? I think not.