JEWISH KING JESUS IS COMING AT THE RAPTURE FOR US IN THE CLOUDS-DON'T MISS IT FOR THE WORLD.THE BIBLE TAKEN LITERALLY- WHEN THE PLAIN SENSE MAKES GOOD SENSE-SEEK NO OTHER SENSE-LEST YOU END UP IN NONSENSE.GET SAVED NOW- CALL ON JESUS TODAY.THE ONLY SAVIOR OF THE WHOLE EARTH - NO OTHER.
1 COR 15:23-JESUS THE FIRST FRUITS-CHRISTIANS RAPTURED TO JESUS-FIRST FRUITS OF THE SPIRIT-23 But every man in his own order: Christ the firstfruits; afterward they that are Christ’s at his coming.ROMANS 8:23 And not only they, but ourselves also, which have the firstfruits of the Spirit, even we ourselves groan within ourselves, waiting for the adoption, to wit, the redemption of our body.(THE PRE-TRIB RAPTURE)
EU DICTATOR (WORLD LEADER)
1 THESSALONIANS 5:3-7
2 For yourselves know perfectly that the day of the Lord so cometh as a thief in the night.
3 For when they shall say, Peace and safety; then sudden destruction cometh upon them, as travail upon a woman with child; and they shall not escape.
4 But ye, brethren, are not in darkness, that that day should overtake you as a thief.
5 Ye are all the children of light, and the children of the day: we are not of the night, nor of darkness.
6 Therefore let us not sleep, as do others; but let us watch and be sober.
7 For they that sleep sleep in the night; and they that be drunken are drunken in the night.
2 THESSALONIANS 2:3-4
3 Let no man deceive you by any means: for that day shall not come, except there come a falling away first, and that man of sin be revealed,(EU WORLD DICTATOR)the son of perdition;
4 Who opposeth and exalteth himself above all that is called God, or that is worshipped; so that he as God sitteth in the temple of God, shewing himself that he is God.
REVELATION 17:12-13
12 And the ten horns (NATIONS) which thou sawest are ten kings, which have received no kingdom as yet; but receive power as kings one hour with the beast.(SOCIALISM)
13 These have one mind,(SOCIALISM) and shall give their power and strength unto the beast.
REVELATION 6:1-2
1 And I saw when the Lamb opened one of the seals, and I heard, as it were the noise of thunder, one of the four beasts saying, Come and see.
2 And I saw, and behold a white horse:(PEACE) and he that sat on him had a bow;(EU DICTATOR) and a crown was given unto him:(PRESIDENT OF THE EU) and he went forth conquering, and to conquer.(MILITARY GENIUS)
2 THESSALONIANS 2:9-12
9 Even him,(EU WORLD DICTATOR) whose coming is after the working of Satan with all power and signs and lying wonders,
10 And with all deceivableness of unrighteousness in them that perish; because they received not the love of the truth, that they might be saved.
11 And for this cause God shall send them strong delusion,(THE FALSE RESURRECTION BY THE WORLD DICTATOR) that they should believe a lie:
12 That they all might be damned who believed not the truth, but had pleasure in unrighteousness.
REVELATION 13:1-10
1 And I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.(THE EU AND ITS DICTATOR IS GODLESS)
2 And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.(DICTATOR COMES FROM NEW AGE OR OCCULT)
3 And I saw one of his heads as it were wounded to death;(MURDERERD) and his deadly wound was healed:(COMES BACK TO LIFE) and all the world wondered after the beast.(THE WORLD THINKS ITS GOD IN THE FLESH, MESSIAH TO ISRAEL)
4 And they worshipped the dragon (SATAN) which gave power unto the beast:(JEWISH EU DICTATOR) and they worshipped the beast, saying, Who is like unto the beast? who is able to make war with him?(FALSE RESURRECTION,SATAN BRINGS HIM TO LIFE)
5 And there was given unto him a mouth speaking great things and blasphemies; and power was given unto him to continue forty and two months.(GIVEN WORLD CONTROL FOR 3 1/2YRS)
6 And he opened his mouth in blasphemy against God,(HES A GOD HATER) to blaspheme his name, and his tabernacle, and them that dwell in heaven.(HES A LIBERAL OR DEMOCRAT,WILL PUT ANYTHING ABOUT GOD DOWN)
7 And it was given unto him to make war with the saints,(BEHEAD THEM) and to overcome them: and power was given him over all kindreds, and tongues, and nations.(WORLD DOMINATION)
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.(WORLD DICTATOR)
9 If any man have an ear, let him hear.
10 He that leadeth into captivity shall go into captivity: he that killeth with the sword must be killed with the sword. Here is the patience and the faith of the saints.(SAVED CHRISTIANS AND JEWS DIE FOR THEIR FAITH AT THIS TIME,NOW WE ARE SAVED BY GRACE BUT DURING THE 7 YEARS OF HELL ON EARTH, PEOPLE WILL BE PUT TO DEATH (BEHEADINGS) FOR THEIR BELIEF IN GOD (JESUS) OR THE BIBLE.
DANIEL 9:26-27
26 And after threescore and two weeks shall Messiah be cut off, but not for himself: and the people of the prince that shall come (ROMANS IN AD 70) shall destroy the city and the sanctuary;(ROMANS DESTROYED THE 2ND TEMPLE) and the end thereof shall be with a flood, and unto the end of the war desolations are determined.
27 And he( EU ROMAN, JEWISH DICTATOR) shall confirm the covenant with many for one week:( 7 YEARS) and in the midst of the week he shall cause the sacrifice and the oblation to cease,( 3 1/2 YRS) and for the overspreading of abominations he shall make it desolate, even until the consummation, and that determined shall be poured upon the desolate.
We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent.James Paul Warburg appearing before the Senate on 7th February 1950
Like a famous WWII Belgian General,Paul Henry Spock said in 1957:We need no commission, we have already too many. What we need is a man who is great enough to be able to keep all the people in subjection to himself and to lift us out of the economic bog into which we threaten to sink. Send us such a man. Be he a god or a devil, we will accept him.And today, sadly, the world is indeed ready for such a man.
No one will enter the New World Order... unless he or she will make a pledge to worship Lucifer. No one will enter the New Age unless he will take a Luciferian Initiation.- David Spangler Director of Planetary Initiative United Nations.
THE WORLD DICTATOR
REVELATION 6:1-2,13:1-3,7-9,16
1 And I saw when the Lamb opened one of the seals, and I heard, as it were the noise of thunder, one of the four beasts saying, Come and see.
2 And I saw, and behold a white horse:(EU WORLD DICTATOR) and he that sat on him had a bow;(PEACE) and a crown was given unto him:(WORLD LEADER) and he went forth conquering, and to conquer.(THIS IS THE EU DICTATOR)
1 And I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.(7 HEADS ARE THE 7TH WORLD EMPIRE IN HISTORY (THE EU) AS WELL AS THE VATICAN WHICH IS BUILT ON 7 HILLS. 10 HORNS ARE 10 KINGS THAT ARISE FROM THE EU, THEN #11 COMES ON THE SCENE BECOMES THE HEAD OF 3 OUNTRIES AND THEN THE EU DICTATOR, COMES FROM 1 OF THE 3 COUNTRIES THAT RULE FOR THIS TERM. I BELIEVE THE 3 COUNTRIES RULING AT THE TIME ARE SPAIN AND 2 OF THE ORIGINAL 6 THAT STARTED THE EU. FROM 1 OF THESE 3 COUNTRIES COME THE FUTURE EU DICTATOR PRESIDENT OF THE EUROPEAN UNION WHO GUARENTEES ISRAELS SECURITY FOR A LAND FOR PEACE 7 YEAR TREATY.
2 And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.(THE JEWISH EU DICTATOR GETS HIS POWER FROM SATAN,HE COMES FROM THE OCCULT).
3 And I saw one of his heads as it were wounded to death; and his deadly wound was healed: and all the world wondered after the beast.(THE DICTATOR HAS A FALSE RESURRECTION. JUST LIKE JESUS HAD A LITERAL RESURRECTION THIS DICTATOR GETS MURDERED AT THE 3 1/2 YR MARK OF THR 7 YEAR TREATY AND COMES BACK TO LIFE. THIS IS HOW HE CAN CLAIM TO BE GOD AND GET AWAY WITH IT AND CONTROL THE WHOLE EARTH.
7 And it was given unto him to make war with the saints, and to overcome them: and power was given him over all kindreds, and tongues, and nations.
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.
9 If any man have an ear, let him hear.
16 And he causeth all,(WORLD SOCIALISM) both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
DANIEL 11:36-40
36 And the king shall do according to his will;(EU PRESIDENT) and he shall exalt himself, and magnify himself above every god, and shall speak marvellous things against the God of gods, and shall prosper till the indignation be accomplished: for that that is determined shall be done.
37 Neither shall he regard the God of his fathers,(THIS EU DICTATOR IS A EUROPEAN JEW) nor the desire of women, nor regard any god: for he shall magnify himself above all.
38 But in his estate shall he honour the God of forces:(HES A MILITARY GINIUS) and a god whom his fathers knew not shall he honour with gold, and silver, and with precious stones, and pleasant things.
39 Thus shall he (THE EU DICTATOR) do in the most strong holds (CONTROL HEZBOLLAH,AL-QUAIDA MURDERERS ETC) with a strange god, whom he shall acknowledge and increase with glory: and he shall cause them to rule over many,(HIS ARMY LEADERS) and shall divide the land for gain.
40 And at the time of the end shall the king of the south(EGYPT) push at him:(EU DICTATOR PROTECTING ISRAELS SECURITY) and the king of the north(RUSSIA) shall come against him like a whirlwind, with chariots, and with horsemen, and with many ships; and he shall enter into the countries, and shall overflow and pass over.
CENTRAL BANKERS LENDER-BIS
https://www.bis.org/
FED CENTRAL BANKERS MEETING - JACKSON HOLE
https://www.kansascityfed.org/publications/research/escp/symposiums/escp-2015
https://www.kansascityfed.org/publications/research/escp
IMF
http://www.imf.org/external/index.htm
WORLD BANK
http://www.worldbank.org/
BANKING UNION BEFORE EURO ADOPTION
http://blog-imfdirect.imf.org/2015/08/19/banking-union-before-euro-adoption-flak-jacket-or-straitjacket/
REVIEW SDR -RESERVE IMF CURRENCY
http://www.imf.org/external/np/exr/facts/sdrcb.htm
http://www.imf.org/external/pubs/ft/survey/so/2015/POL080415A.htm
http://www.imf.org/external/np/exr/faq/sdrallocfaqs.htm
http://www.imf.org/external/pp/longres.aspx?id=4975
http://www.imf.org/external/np/sec/pr/2015/pr15384.htm
http://www.imf.org/external/pp/longres.aspx?id=4978
http://www.imf.org/external/np/tre/sdr/proposal/2009/0709.htm
The euro as the world’s reserve currency?-Written by Simon Tilford, 15 November 2007-
http://www.cer.org.uk/insights/euro-world%E2%80%99s-reserve-currency
Back in the 1970s President Nixon’s treasury secretary, John Connally, famously quipped that “the dollar may be our currency, but it’s your problem”. One of the arguments in favour of establishing the euro was that it would quickly come to rival the dollar’s status as the world’s principle reserve currency and make it hard for the US to abuse its “exorbitant privilege” – devaluing the dollar imposes few costs on the US because its foreign debt is denominated in dollars. Is the wish of those Europeans that want to see the dollar dethroned about to come true? If so, would this be a win-win scenario for the eurozone? There is no doubt that the threat to the dollar’s status is bigger than at any time since the end of the Second World War. The most likely outcome is that a rapid narrowing of the US current-account deficit and renewed fiscal discipline will combine to restore confidence in the dollar, and that it will retain its status as the world’s leading reserve currency. Confidence in the long-term prospects of the US economy remains strong, and the country’s huge and liquid financial markets make the dollar highly attractive as a reserve currency. However, a rout is a possibility, and could be triggered by a number of events, such as a debt crisis in the US or a steep rise in inflation, which would undercut the willingness of foreigners, crucially East Asian central banks, to hold so many of their reserves in the American currency. Let’s assume for a moment that the damage to the credibility of dollar is such that its role as the world’s favourite currency is lost.The euro would be the only plausible replacement. It is the world’s second most important reserve currency, though a distant second to the US. The eurozone economy is huge (though not quite as big as the US), its economy is open, its financial markets increasingly deep and liquid, and the ECB now enjoys considerable credibility in the financial markets. But what would it mean for the eurozone, aside from schadenfreude? It would be easier for European companies to operate internationally as there would be less exchange rate risk. With import and export prices denominated in euros the economy, and the inflation rate, would be less vulnerable to shifts in exchange rates. Much more important than this, however, would be the gains from seignorage. As is the case at present in the US, the eurozone would benefit from what are effectively very low interest loans in the form of large central bank holdings of euros. Also, the growth of international trade would boost demand for euros, with the result that the euro-zone could very cheaply finance an external deficit, much as the US has been doing for decades.But there are downsides to these potential advantages. As the issuer of a major international reserve currency, the eurozone would have to cope with different external risks, such as structural imbalances in the global economy, that are to a large extent responsible for the weakness of the dollar. The huge US current account deficit is the flipside of mercantilist economic policies being pursued by East Asian governments. Internationalisation of the euro could also make it harder to control the stock of euros in circulation and hence growth in the money supply and potentially inflation. An increase in the demand for euros would either cause the currency to appreciate, making exports less competitive, or require that the eurozone run a substantial external deficit in order to satisfy the external demand for euros. For this to happen, the ECB would need to run a looser monetary policy.The potential for conflict within the eurozone is obvious. A stronger euro would be anathema to many eurozone countries, not least France and Italy, which are already very worried about euro strength. But a looser monetary policy would be anathema to countries such as Germany and the Netherlands that worry about the inflation implications of cheaper money. Indeed, it is far from obvious how the eurozone could run a sizeable current account deficit without exacerbating existing tensions between members of the single currency area with large current-account surpluses, such as Germany and Netherlands, and those with large or rising external deficits – most notably Spain, but also France and Italy. It would be possible for Germany and the Netherlands to continue to run big surpluses at the same time as the eurozone as a whole ran a bigger deficit, but only if other eurozone countries ran even bigger deficits. This is politically implausible.
The euro in the world
http://ec.europa.eu/economy_finance/euro/world/index_en.htm
As well as serving as the currency of the euro area, the euro has a strong international presence. Currencies are the means by which wealth is stored, protected and exchanged between countries, organisations and individuals. A global currency, such as the euro, does this on a global scale. Since its introduction in 1999, it has firmly established itself as a major international currency, second only to the US dollar.Within the euro area, the single currency, the euro, is the means by which governments, companies and individuals make and receive payments for goods and services. It is also used to store and create wealth for the future as savings and investments. However, the size, stability and strength of the euro-area economy – the world's second largest after the United States – make the euro increasingly attractive beyond its borders, too. Public and private sectors in third countries acquire and use the euro for many purposes, including for trade or as currency reserves. For this reason, today, the euro is the second most important international currency behind the US dollar. The widespread use of the euro in the international financial and monetary system demonstrates its global presence:The euro is increasingly used to issue government and corporate debt worldwide. At the end of 2006, the share of the euro in international debt markets was around one-third, while the US dollar accounted for 44%.Global banks make significant loans denominated in euro around the world.The euro is the second most actively traded currency in foreign exchange markets; it is a counterpart in around 40% of the daily transactions.The euro is extensively used for invoicing and paying in international trade, not only between the euro area and third countries but also, to a lesser extent, between third countries.The euro is widely used, alongside the US dollar, as an important reserve currency to hold for monetary emergencies. At the end of 2006, more than one-quarter of the global foreign exchange holdings were being held in euros, compared to 18% in 1999. Developing countries are among those which have increased their reserves in euro the most, from 18% in 1999 to around 30% in 2006.Several countries manage their currencies by linking them to the euro, which acts as an anchor or reference currency.The status of the euro as a global currency, combined with the size and economic weight of the euro area, is leading international economic organisations, such as the IMF and the G8, increasingly to view the euro-area economy as one entity. This gives the European Union a stronger voice in the world. To benefit from this stronger position, and to contribute effectively to international financial stability, the euro area is speaking with one voice more and more in important economic fora. This is done through close coordination between the euro-area Member States, as well as the European Central Bank and the European Commission during international economic meetings.A number of third countries and regions are even more closely linked to the euro. The stable monetary system behind the euro makes it an attractive 'anchor' currency for them, particularly for those that have special institutional arrangements with the EU, such as preferential trade agreements. By linking their currency to the euro they bring more certainty and stability to their national economies.The euro is also widely used in third countries and regions neighbouring the euro area, for example in South-eastern Europe, while some other countries – Andorra, Monaco, San Marino and the Vatican City – use the euro as their official currency by virtue of specific monetary agreements with the EU, and may issue their own euro coins within certain quantitative limits.Becoming the world’s principle reserve currency might not be worth the bragging rights.Simon Tilford is chief economist at the Centre for European Reform.Comments-I agree with the author's prediction that "The euro would be the only plausible replacement. It is the world’s second most important reserve currency".The growth of international trade would boost demand for euros, with the result that the euro-zone could very cheaply finance an external deficit, much as the US has been doing for decades.
DEFINITION of 'Federal Reserve System - FRS'-The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States.
INVESTOPEDIA EXPLAINS 'Federal Reserve System - FRS'-You can divide the Federal Reserve's duties into four general areas:1. Conducting monetary policy-2. Regulating banking institutions and protecting the credit rights of consumers-3. Maintaining the stability of the financial system-4. Providing financial services to the U.S. government
DEFINITION of 'Central Bank'-The entity responsible for overseeing the monetary system for a nation (or group of nations). Central banks have a wide range of responsibilities, from overseeing monetary policy to implementing specific goals such as currency stability, low inflation and full employment. Central banks also generally issue currency, function as the bank of the government, regulate the credit system, oversee commercial banks, manage exchange reserves and act as a lender of last resort.
INVESTOPEDIA EXPLAINS 'Central Bank'-The central banking system in the U.S. is known as the Federal Reserve System (commonly known as "the Fed"), which is composed of 12 regional Federal Reserve Banks located in major cities throughout the country. The main tasks of the Federal Reserve are to supervise and regulate banks, implement monetary policy by buying and selling U.S. Treasury bonds and steer interest rates. Ben Bernanke currently serves as the chairman of the Board of Governors of the Federal Reserve.
DEFINITION of 'Monetary Policy'-The actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate, or changing the amount of money banks need to keep in the vault (bank reserves).
INVESTOPEDIA EXPLAINS 'Monetary Policy'-In the United States, the Federal Reserve is in charge of monetary policy. Monetary policy is one of the ways that the U.S. government attempts to control the economy. If the money supply grows too fast, the rate of inflation will increase; if the growth of the money supply is slowed too much, then economic growth may also slow. In general, the U.S. sets inflation targets that are meant to maintain a steady inflation of 2% to 3%.
DEFINITION of 'Eurocurrency'-Currency deposited by national governments or corporations in banks outside their home market. This applies to any currency and to banks in any country. For example, South Korean won deposited at a bank in South Africa, is considered eurocurrency.Also known as "euromoney."
INVESTOPEDIA EXPLAINS 'Eurocurrency'-Having "euro" doesn't mean that the transaction has to involve European countries. However, in practice, European countries are often involved.
DEFINITION of 'Reserve Currency'-A foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate. A large percentage of commodities, such as gold and oil, are usually priced in the reserve currency, causing other countries to hold this currency to pay for these goods. Holding currency reserves, therefore, minimizes exchange rate risk, as the purchasing nation will not have to exchange their currency for the current reserve currency in order to make the purchase.
INVESTOPEDIA EXPLAINS 'Reserve Currency'-In 2011, the U.S. dollar was the primary reserve currency used by other countries. As a result, foreign nations closely monitored the monetary policy of the United States in order to ensure that the value of their reserves is not adversely affected by inflation.(all definitions from-Investopedia http://www.investopedia.com/)
Reserve Currency Status Must be Earned-pc
People sometimes talk about “reserve currency” status as if it’s something that is taken by force or bestowed on some country. But what does it really mean to be a “reserve” currency? A reserve currency is simply a currency that is in high demand from other countries. It is a highly reliable and viable international currency. Of course, the USA is commonly thought of as the world’s “reserve” currency, but there are actually many reserve currencies like Yen and Euro as well. They’re not necessarily the same caliber reserve currency as dollars, but they’re very high up there.The reason why US dollars are the highest quality reserve currency is a function of demand. And the reason the dollar is in such high demand around the world is due to the fact that the US dollar is the currency that gives you access to 22% of world’s most high quality and productive output. The way this plays out in international markets is quite simple. China sells the USA pieces of plastic in exchange for Dollars. China doesn’t want the pieces of plastic. They want the Dollars because with those dollars comes domestic investment and domestic employment. China is better off in the long run by trading their pieces of plastic in exchange for domestic investment and employment. So, they end up with a “reserve” of dollars which they can either sit on, invest in T-bonds or implement other strategic measures.The key point there is to understand that China wants to do a lot of business with the USA. And they want to do a lot of business with the USA because the USA is the world’s largest economy. But it’s not just a large economy. It’s an economy that produces high quality and diverse output. This increases the demand for dollars on global markets because it is essentially the high quality asset in the world. A foreign government might be hesitant to own foreign currency, but when its backed by the most powerful multinational corporations on Earth that alleviates this concern a great deal. But this wasn’t something that was bestowed upon the USA. It was earned through hundreds of years of high quality growth.This is important to understand during a time when China is positioning to become a reserve currency. But the Chinese must remember something. Foreign countries don’t want to hold Yuan because the Chinese are a large economy. They will want to hold Yuan because they know they can trust the diversity of the output backing that currency as well as the political system that supports it. So far, the biggest hurdle to China’s reserve currency status is not its quantity or quality of output, but its government which insists on manipulating its credibility in an attempt to convince the world that this output is of higher quality than it really is.
How Much Longer Will the Dollar Remain the Reserve Currency of the World?-pc
The US Dollar’s status as a reserve currency seems to be a perennial concern for many people these days. I think this concern is often dramatically overstated. I was reminded of this point as I was reviewing the slides from Jeff Gundlach’s presentation yesterday which showed the following chart:As you can see, no one maintains reserve currency status forever. That shouldn’t be remotely surprising. The global economy is dynamic and market shares shift. And at the end of the day that’s what reserve status is really all about. Think about it – nations accumulate reserves of US dollars today because the US economy is the dominant player in global trade.Of course, the US Dollar isn’t the only currency that nations maintain reserves of. The Euro is also a major reserve currency and the Yuan is fast becoming a major reserve currency. But since the USA produces 22% of all world output it happens to play a particularly special role in the global economy. By virtue of being the largest economy in the world the accumulation of US dollar denominated financial assets happens to dominate the global financial system. It’s sort of like being the top market share producer of a particular product in a particular industry. Other entities accumulate your products because you’re the top producer. And that changes over time. Market shares change and regimes shift with the evolving economy.So, will the USA lose its reserve currency status at some point? Yes. In fact, it’s already starting to lose its reserve status to Europe and China. Will it be the end of the world and will it cause everyone to suddenly ditch the dollar? Probably not. It just means the USA will produce a lower proportion of global output and therefore, as a matter of accounting, the rest of the world will hold a lower percentage of US dollar denominated financial assets as a percentage of global output. It’s not the end of the world. It’s just a sign that market shares change and when you’re #1, well, there’s only one direction to go.
Currency Pegs-By Kati Pohjanpalo and Ye Xie | Updated Aug 20, 2015 3:45 AM EDT-bloomberg
In the rise and fall of world powers, the currency market keeps score. A nation’s money gains value when it’s a magnet for global investors; in times of trouble it weakens. The volatility can create havoc. To keep things in check, more than half of all countries have fixed the value of their money to another currency — mostly the U.S. dollar or the euro. They’ve hammered in a peg. The tie-ups can provide stability and foster trade, as Hong Kong’s link to the dollar has since 1983. Until they don’t. To hold most pegs in place, the central bank must use foreign reserves to buy or sell in currency markets in a battle with traders to keep the exchange rate stable. If pressure builds, policy makers will be forced to give up. The peg will slip or break — with sometimes disastrous consequences.-The Situation-China surprised global markets Aug. 11 with its first major devaluation of the yuan since 1994, as an economic slowdown weighed on the currency and the U.S. prepared to raise interest rates. The shift mounted pressure on trading partners, with Vietnam marking down is currency the following week and Kazakhstan moving to a free float Aug. 20. In January, Switzerland shocked traders by scrapping the franc’s three-year-old cap against the euro. The move forced the central bank in Denmark to defend the krone’s tie-up to the euro by repeatedly cutting interest rates. Russia spent the last months of 2014 struggling to halt the ruble’s steepest slide in 17 years as oil prices plunged. It abandoned efforts to manage the ruble’s flexible, or crawling, peg against a basket of currencies after spending more than $88 billion. Both Egypt and Nigeria have also effectively devalued in 2015. Though the currencies of most large countries and the 19-nation euro float freely, the trend is heading the other way: 34 percent of countries monitored by the International Monetary Fund gave the market free rein in 2014, down from 40 percent in 2008.-The Background-There are various systems for managing exchange rates, and some are more stable than others. Panama and Zimbabwe simply use the U.S. dollar as legal tender. Fixed rates are employed in countries from Bulgaria to Saudi Arabia to Venezuela. Singapore and China have employed different types of links to currencies of trading partners via bands that can move up or down. China has mostly used the arrangement to limit appreciation over the last decade, though it’s now allowing the yuan to fluctuate more in response to market forces. Hong Kong’s peg is seen as virtually impregnable because the total amount of local currency issued is backed by U.S. dollars in reserve, an arrangement known as a currency board. History is full of upheavals. The 1971 “Nixon shock” was sparked when President Richard Nixon abruptly ended the dollar’s convertibility to gold. It led to the end of the post-World War II Bretton Woods system that pegged currencies of industrialized countries to the U.S. The U.K. faced a storm in 1992, when investors including George Soros bet it wouldn’t be able to keep its pound within a pre-euro system of linked rates. It gave in on Sept. 16 and allowed the pound to float, a day known as Black Wednesday.The Argument-Currency pegs can put a central bank at the mercy of another country’s monetary and fiscal policy, so it must copy moves on interest rates. There’s less freedom to respond to domestic goals, such as reviving growth, creating jobs or containing prices. In Hong Kong, for example, easy-money policies in the U.S. have caused a surge in inflation and home prices. So why peg? More predictability for companies and investors. Tying policy makers’ hands may also lead to more disciplined government spending. For a peg to hold, the exchange rate must be set judiciously and kept in line. Since there’s no automatic rebalancing from trade flows, it’s easy for a peg to get out of whack. That can cause a currency to lose credibility and come under attack. Some countries -– like China, Egypt and Venezuela -– keep speculators at bay with capital controls that limit how much currency can be converted or rules that require banks to trade near official rates.First Published Jan. 30, 2015-To contact the writers of this QuickTake:Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net Ye Xie in New York at yxie6@bloomberg.net-To contact the editor responsible for this QuickTake:-Leah Harrison Singer at lharrison@bloomberg.net
Currency Wars-By Lucy Meakin | Updated Aug 11, 2015 3:28 PM EDT-bloomberg
Central bankers aren’t usually the ones who fight wars. But the global economy is a dangerous place, full of threats to prosperity. That’s given rise to the idea that there’s a tussle for competitive advantage going on, with each country brandishing its currency as a weapon. The standard view assumes policy makers are driving down exchange rates so that goods made by their exporters can be sold cheaper overseas, providing a jump-start to the economy at home. When other nations retaliate, it ignites a currency war. Central bankers say they’re not trying to pick fights. Rather, they’re cutting interest rates and taking other steps to stimulate growth. That creates spillover, however, as money flees for countries with higher rates, pushing currencies higher and hurting exporters. Whether intentional or not, these unspoken currency wars still create peril — and real winners and losers.-The Situation-The battle erupted again when China devalued the yuan in August. Earlier in the year, foreign-exchange markets were jolted when Switzerland surrendered its three-year-old limit for the franc against the euro and nations from Canada to Singapore unexpectedly eased monetary policy. At least 22 countries cut interest rates in the first quarter. At the same time, the European Central Bank began a bond-purchase program known as quantitative easing that helped send the euro to the lowest level against the U.S. dollar in more than a decade. The current conflict has simmered for years as the biggest countries fought their way out of the recession triggered by the 2008 financial crisis, with the U.S. and Japan also using bond-buying plans. As the recovery limped along, policy makers shifted their focus to warding off deflation, or a drop in prices that can cripple spending and sap growth. Most central banks have a mandate to keep prices stable, so when oil prices collapsed in late 2014, they were forced to act. Who’s taking the hit? Mainly the U.S., as the dollar strengthened against almost every other currency, threatening the profits of U.S. exporters.-The Background-Brazilian Finance Minister Guido Mantega gave the currency wars their name in 2010 when he denounced what he saw as the deliberate pursuit of weaker currencies. His country had been an early casualty in the fight, after lower U.S. rates sent money flowing into emerging markets, making Brazil’s commodity exports more expensive. One big winner was Japan, after the yen tumbled 28 percent against the dollar in two years, propelling profits for companies like Toyota. The most famous frenzy of competitive devaluations came during the Great Depression of the 1930s, as countries abandoned the gold standard that had pegged their currencies to the value of the metal. Until its collapse in 1971, the Bretton Woods system prevented a repeat of such beggar-thy-neighbor strategies by linking the value of many currencies to the dollar. Over the last decade, China has faced criticism for holding down the value of the yuan, as cheap goods helped transform the country into an exporting powerhouse.The Argument-With deflation-fearing central banks embracing unconventional policies to protect their economies, the race to the bottom has taken on new momentum. The fallout from unilateral moves can rattle markets, whipsaw capital flows and fuel volatility. More countries have tried to manage exchange rates though pegs to another currency. There are calls for clearer communication and a more united stance from the world’s central bankers, since currency fluctuations create uncertainty and can cramp investment. The G-20 group of countries has pledged not to target exchange rates for competitive purposes, though it stopped short of criticizing any nation for doing so. All the while, U.S. exporters are feeling the pain, putting the recovery of the world’s largest economy at risk. There’s a debate about how long the world’s economies can fight, and how they might make peace in the currency wars.
CHINA DEVALUES CURRENCY FOR AMERICAN INTEREST RATE RISE SPECULATION
http://israndjer.blogspot.ca/2015/08/yesterday-dow-was-up-440-points-and.html
http://israndjer.blogspot.ca/2015/08/i-believe-this-china-devaluing-of-its.html
http://israndjer.blogspot.ca/2015/08/see-how-stock-markets-fare-today-at-ok.html
http://israndjer.blogspot.ca/2015/08/asian-stock-markets-crash-badly-to.html
http://israndjer.blogspot.ca/2015/08/stock-market-crash-was-inevitable-and.html
http://israndjer.blogspot.ca/2015/08/imf-its-premature-to-say-china-is.html
http://israndjer.blogspot.ca/2015/08/10-currencies-that-may-follow.html
http://israndjer.blogspot.ca/2015/08/11-chinese-banks-ask-for-bailouts.html
http://israndjer.blogspot.ca/2015/08/north-korea-threatens-us-what-china.html
http://israndjer.blogspot.ca/2015/08/what-kinda-story-is-this-america-used.html
http://israndjer.blogspot.ca/2015/08/112-now-dead-722-injured-in-china-port.html
http://israndjer.blogspot.ca/2015/08/china-devalues-currency-for-3rd-day.html
http://israndjer.blogspot.ca/2015/08/china-currency-wars-angers.html
http://israndjer.blogspot.ca/2015/08/china-devalues-currency-for-second-day.html
http://israndjer.blogspot.ca/2015/08/china-devalues-its-currency-stocks-fall.html
GREECE NEWS
http://israndjer.blogspot.ca/2015/08/typhoons-fires-koreas-talk-planned.html
http://israndjer.blogspot.ca/2015/08/tsipras-resigns-for-greece-elections.html
http://israndjer.blogspot.ca/2015/08/china-says-it-arrested-15000-people-for.html
http://israndjer.blogspot.ca/2015/08/russia-and-nato-rehearsing-for-war.html
http://israndjer.blogspot.ca/2015/08/at-least-56-dead-720-injured-in-chinese.html
http://israndjer.blogspot.ca/2015/08/greece-lenders-clinch-bailout-deal.html
EU DICTATOR (WORLD LEADER)
1 THESSALONIANS 5:3-7
2 For yourselves know perfectly that the day of the Lord so cometh as a thief in the night.
3 For when they shall say, Peace and safety; then sudden destruction cometh upon them, as travail upon a woman with child; and they shall not escape.
4 But ye, brethren, are not in darkness, that that day should overtake you as a thief.
5 Ye are all the children of light, and the children of the day: we are not of the night, nor of darkness.
6 Therefore let us not sleep, as do others; but let us watch and be sober.
7 For they that sleep sleep in the night; and they that be drunken are drunken in the night.
2 THESSALONIANS 2:3-4
3 Let no man deceive you by any means: for that day shall not come, except there come a falling away first, and that man of sin be revealed,(EU WORLD DICTATOR)the son of perdition;
4 Who opposeth and exalteth himself above all that is called God, or that is worshipped; so that he as God sitteth in the temple of God, shewing himself that he is God.
REVELATION 17:12-13
12 And the ten horns (NATIONS) which thou sawest are ten kings, which have received no kingdom as yet; but receive power as kings one hour with the beast.(SOCIALISM)
13 These have one mind,(SOCIALISM) and shall give their power and strength unto the beast.
REVELATION 6:1-2
1 And I saw when the Lamb opened one of the seals, and I heard, as it were the noise of thunder, one of the four beasts saying, Come and see.
2 And I saw, and behold a white horse:(PEACE) and he that sat on him had a bow;(EU DICTATOR) and a crown was given unto him:(PRESIDENT OF THE EU) and he went forth conquering, and to conquer.(MILITARY GENIUS)
2 THESSALONIANS 2:9-12
9 Even him,(EU WORLD DICTATOR) whose coming is after the working of Satan with all power and signs and lying wonders,
10 And with all deceivableness of unrighteousness in them that perish; because they received not the love of the truth, that they might be saved.
11 And for this cause God shall send them strong delusion,(THE FALSE RESURRECTION BY THE WORLD DICTATOR) that they should believe a lie:
12 That they all might be damned who believed not the truth, but had pleasure in unrighteousness.
REVELATION 13:1-10
1 And I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.(THE EU AND ITS DICTATOR IS GODLESS)
2 And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.(DICTATOR COMES FROM NEW AGE OR OCCULT)
3 And I saw one of his heads as it were wounded to death;(MURDERERD) and his deadly wound was healed:(COMES BACK TO LIFE) and all the world wondered after the beast.(THE WORLD THINKS ITS GOD IN THE FLESH, MESSIAH TO ISRAEL)
4 And they worshipped the dragon (SATAN) which gave power unto the beast:(JEWISH EU DICTATOR) and they worshipped the beast, saying, Who is like unto the beast? who is able to make war with him?(FALSE RESURRECTION,SATAN BRINGS HIM TO LIFE)
5 And there was given unto him a mouth speaking great things and blasphemies; and power was given unto him to continue forty and two months.(GIVEN WORLD CONTROL FOR 3 1/2YRS)
6 And he opened his mouth in blasphemy against God,(HES A GOD HATER) to blaspheme his name, and his tabernacle, and them that dwell in heaven.(HES A LIBERAL OR DEMOCRAT,WILL PUT ANYTHING ABOUT GOD DOWN)
7 And it was given unto him to make war with the saints,(BEHEAD THEM) and to overcome them: and power was given him over all kindreds, and tongues, and nations.(WORLD DOMINATION)
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.(WORLD DICTATOR)
9 If any man have an ear, let him hear.
10 He that leadeth into captivity shall go into captivity: he that killeth with the sword must be killed with the sword. Here is the patience and the faith of the saints.(SAVED CHRISTIANS AND JEWS DIE FOR THEIR FAITH AT THIS TIME,NOW WE ARE SAVED BY GRACE BUT DURING THE 7 YEARS OF HELL ON EARTH, PEOPLE WILL BE PUT TO DEATH (BEHEADINGS) FOR THEIR BELIEF IN GOD (JESUS) OR THE BIBLE.
DANIEL 9:26-27
26 And after threescore and two weeks shall Messiah be cut off, but not for himself: and the people of the prince that shall come (ROMANS IN AD 70) shall destroy the city and the sanctuary;(ROMANS DESTROYED THE 2ND TEMPLE) and the end thereof shall be with a flood, and unto the end of the war desolations are determined.
27 And he( EU ROMAN, JEWISH DICTATOR) shall confirm the covenant with many for one week:( 7 YEARS) and in the midst of the week he shall cause the sacrifice and the oblation to cease,( 3 1/2 YRS) and for the overspreading of abominations he shall make it desolate, even until the consummation, and that determined shall be poured upon the desolate.
We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent.James Paul Warburg appearing before the Senate on 7th February 1950
Like a famous WWII Belgian General,Paul Henry Spock said in 1957:We need no commission, we have already too many. What we need is a man who is great enough to be able to keep all the people in subjection to himself and to lift us out of the economic bog into which we threaten to sink. Send us such a man. Be he a god or a devil, we will accept him.And today, sadly, the world is indeed ready for such a man.
No one will enter the New World Order... unless he or she will make a pledge to worship Lucifer. No one will enter the New Age unless he will take a Luciferian Initiation.- David Spangler Director of Planetary Initiative United Nations.
THE WORLD DICTATOR
REVELATION 6:1-2,13:1-3,7-9,16
1 And I saw when the Lamb opened one of the seals, and I heard, as it were the noise of thunder, one of the four beasts saying, Come and see.
2 And I saw, and behold a white horse:(EU WORLD DICTATOR) and he that sat on him had a bow;(PEACE) and a crown was given unto him:(WORLD LEADER) and he went forth conquering, and to conquer.(THIS IS THE EU DICTATOR)
1 And I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.(7 HEADS ARE THE 7TH WORLD EMPIRE IN HISTORY (THE EU) AS WELL AS THE VATICAN WHICH IS BUILT ON 7 HILLS. 10 HORNS ARE 10 KINGS THAT ARISE FROM THE EU, THEN #11 COMES ON THE SCENE BECOMES THE HEAD OF 3 OUNTRIES AND THEN THE EU DICTATOR, COMES FROM 1 OF THE 3 COUNTRIES THAT RULE FOR THIS TERM. I BELIEVE THE 3 COUNTRIES RULING AT THE TIME ARE SPAIN AND 2 OF THE ORIGINAL 6 THAT STARTED THE EU. FROM 1 OF THESE 3 COUNTRIES COME THE FUTURE EU DICTATOR PRESIDENT OF THE EUROPEAN UNION WHO GUARENTEES ISRAELS SECURITY FOR A LAND FOR PEACE 7 YEAR TREATY.
2 And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.(THE JEWISH EU DICTATOR GETS HIS POWER FROM SATAN,HE COMES FROM THE OCCULT).
3 And I saw one of his heads as it were wounded to death; and his deadly wound was healed: and all the world wondered after the beast.(THE DICTATOR HAS A FALSE RESURRECTION. JUST LIKE JESUS HAD A LITERAL RESURRECTION THIS DICTATOR GETS MURDERED AT THE 3 1/2 YR MARK OF THR 7 YEAR TREATY AND COMES BACK TO LIFE. THIS IS HOW HE CAN CLAIM TO BE GOD AND GET AWAY WITH IT AND CONTROL THE WHOLE EARTH.
7 And it was given unto him to make war with the saints, and to overcome them: and power was given him over all kindreds, and tongues, and nations.
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.
9 If any man have an ear, let him hear.
16 And he causeth all,(WORLD SOCIALISM) both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
DANIEL 11:36-40
36 And the king shall do according to his will;(EU PRESIDENT) and he shall exalt himself, and magnify himself above every god, and shall speak marvellous things against the God of gods, and shall prosper till the indignation be accomplished: for that that is determined shall be done.
37 Neither shall he regard the God of his fathers,(THIS EU DICTATOR IS A EUROPEAN JEW) nor the desire of women, nor regard any god: for he shall magnify himself above all.
38 But in his estate shall he honour the God of forces:(HES A MILITARY GINIUS) and a god whom his fathers knew not shall he honour with gold, and silver, and with precious stones, and pleasant things.
39 Thus shall he (THE EU DICTATOR) do in the most strong holds (CONTROL HEZBOLLAH,AL-QUAIDA MURDERERS ETC) with a strange god, whom he shall acknowledge and increase with glory: and he shall cause them to rule over many,(HIS ARMY LEADERS) and shall divide the land for gain.
40 And at the time of the end shall the king of the south(EGYPT) push at him:(EU DICTATOR PROTECTING ISRAELS SECURITY) and the king of the north(RUSSIA) shall come against him like a whirlwind, with chariots, and with horsemen, and with many ships; and he shall enter into the countries, and shall overflow and pass over.
CENTRAL BANKERS LENDER-BIS
https://www.bis.org/
FED CENTRAL BANKERS MEETING - JACKSON HOLE
https://www.kansascityfed.org/publications/research/escp/symposiums/escp-2015
https://www.kansascityfed.org/publications/research/escp
IMF
http://www.imf.org/external/index.htm
WORLD BANK
http://www.worldbank.org/
BANKING UNION BEFORE EURO ADOPTION
http://blog-imfdirect.imf.org/2015/08/19/banking-union-before-euro-adoption-flak-jacket-or-straitjacket/
REVIEW SDR -RESERVE IMF CURRENCY
http://www.imf.org/external/np/exr/facts/sdrcb.htm
http://www.imf.org/external/pubs/ft/survey/so/2015/POL080415A.htm
http://www.imf.org/external/np/exr/faq/sdrallocfaqs.htm
http://www.imf.org/external/pp/longres.aspx?id=4975
http://www.imf.org/external/np/sec/pr/2015/pr15384.htm
http://www.imf.org/external/pp/longres.aspx?id=4978
http://www.imf.org/external/np/tre/sdr/proposal/2009/0709.htm
The euro as the world’s reserve currency?-Written by Simon Tilford, 15 November 2007-
http://www.cer.org.uk/insights/euro-world%E2%80%99s-reserve-currency
Back in the 1970s President Nixon’s treasury secretary, John Connally, famously quipped that “the dollar may be our currency, but it’s your problem”. One of the arguments in favour of establishing the euro was that it would quickly come to rival the dollar’s status as the world’s principle reserve currency and make it hard for the US to abuse its “exorbitant privilege” – devaluing the dollar imposes few costs on the US because its foreign debt is denominated in dollars. Is the wish of those Europeans that want to see the dollar dethroned about to come true? If so, would this be a win-win scenario for the eurozone? There is no doubt that the threat to the dollar’s status is bigger than at any time since the end of the Second World War. The most likely outcome is that a rapid narrowing of the US current-account deficit and renewed fiscal discipline will combine to restore confidence in the dollar, and that it will retain its status as the world’s leading reserve currency. Confidence in the long-term prospects of the US economy remains strong, and the country’s huge and liquid financial markets make the dollar highly attractive as a reserve currency. However, a rout is a possibility, and could be triggered by a number of events, such as a debt crisis in the US or a steep rise in inflation, which would undercut the willingness of foreigners, crucially East Asian central banks, to hold so many of their reserves in the American currency. Let’s assume for a moment that the damage to the credibility of dollar is such that its role as the world’s favourite currency is lost.The euro would be the only plausible replacement. It is the world’s second most important reserve currency, though a distant second to the US. The eurozone economy is huge (though not quite as big as the US), its economy is open, its financial markets increasingly deep and liquid, and the ECB now enjoys considerable credibility in the financial markets. But what would it mean for the eurozone, aside from schadenfreude? It would be easier for European companies to operate internationally as there would be less exchange rate risk. With import and export prices denominated in euros the economy, and the inflation rate, would be less vulnerable to shifts in exchange rates. Much more important than this, however, would be the gains from seignorage. As is the case at present in the US, the eurozone would benefit from what are effectively very low interest loans in the form of large central bank holdings of euros. Also, the growth of international trade would boost demand for euros, with the result that the euro-zone could very cheaply finance an external deficit, much as the US has been doing for decades.But there are downsides to these potential advantages. As the issuer of a major international reserve currency, the eurozone would have to cope with different external risks, such as structural imbalances in the global economy, that are to a large extent responsible for the weakness of the dollar. The huge US current account deficit is the flipside of mercantilist economic policies being pursued by East Asian governments. Internationalisation of the euro could also make it harder to control the stock of euros in circulation and hence growth in the money supply and potentially inflation. An increase in the demand for euros would either cause the currency to appreciate, making exports less competitive, or require that the eurozone run a substantial external deficit in order to satisfy the external demand for euros. For this to happen, the ECB would need to run a looser monetary policy.The potential for conflict within the eurozone is obvious. A stronger euro would be anathema to many eurozone countries, not least France and Italy, which are already very worried about euro strength. But a looser monetary policy would be anathema to countries such as Germany and the Netherlands that worry about the inflation implications of cheaper money. Indeed, it is far from obvious how the eurozone could run a sizeable current account deficit without exacerbating existing tensions between members of the single currency area with large current-account surpluses, such as Germany and Netherlands, and those with large or rising external deficits – most notably Spain, but also France and Italy. It would be possible for Germany and the Netherlands to continue to run big surpluses at the same time as the eurozone as a whole ran a bigger deficit, but only if other eurozone countries ran even bigger deficits. This is politically implausible.
The euro in the world
http://ec.europa.eu/economy_finance/euro/world/index_en.htm
As well as serving as the currency of the euro area, the euro has a strong international presence. Currencies are the means by which wealth is stored, protected and exchanged between countries, organisations and individuals. A global currency, such as the euro, does this on a global scale. Since its introduction in 1999, it has firmly established itself as a major international currency, second only to the US dollar.Within the euro area, the single currency, the euro, is the means by which governments, companies and individuals make and receive payments for goods and services. It is also used to store and create wealth for the future as savings and investments. However, the size, stability and strength of the euro-area economy – the world's second largest after the United States – make the euro increasingly attractive beyond its borders, too. Public and private sectors in third countries acquire and use the euro for many purposes, including for trade or as currency reserves. For this reason, today, the euro is the second most important international currency behind the US dollar. The widespread use of the euro in the international financial and monetary system demonstrates its global presence:The euro is increasingly used to issue government and corporate debt worldwide. At the end of 2006, the share of the euro in international debt markets was around one-third, while the US dollar accounted for 44%.Global banks make significant loans denominated in euro around the world.The euro is the second most actively traded currency in foreign exchange markets; it is a counterpart in around 40% of the daily transactions.The euro is extensively used for invoicing and paying in international trade, not only between the euro area and third countries but also, to a lesser extent, between third countries.The euro is widely used, alongside the US dollar, as an important reserve currency to hold for monetary emergencies. At the end of 2006, more than one-quarter of the global foreign exchange holdings were being held in euros, compared to 18% in 1999. Developing countries are among those which have increased their reserves in euro the most, from 18% in 1999 to around 30% in 2006.Several countries manage their currencies by linking them to the euro, which acts as an anchor or reference currency.The status of the euro as a global currency, combined with the size and economic weight of the euro area, is leading international economic organisations, such as the IMF and the G8, increasingly to view the euro-area economy as one entity. This gives the European Union a stronger voice in the world. To benefit from this stronger position, and to contribute effectively to international financial stability, the euro area is speaking with one voice more and more in important economic fora. This is done through close coordination between the euro-area Member States, as well as the European Central Bank and the European Commission during international economic meetings.A number of third countries and regions are even more closely linked to the euro. The stable monetary system behind the euro makes it an attractive 'anchor' currency for them, particularly for those that have special institutional arrangements with the EU, such as preferential trade agreements. By linking their currency to the euro they bring more certainty and stability to their national economies.The euro is also widely used in third countries and regions neighbouring the euro area, for example in South-eastern Europe, while some other countries – Andorra, Monaco, San Marino and the Vatican City – use the euro as their official currency by virtue of specific monetary agreements with the EU, and may issue their own euro coins within certain quantitative limits.Becoming the world’s principle reserve currency might not be worth the bragging rights.Simon Tilford is chief economist at the Centre for European Reform.Comments-I agree with the author's prediction that "The euro would be the only plausible replacement. It is the world’s second most important reserve currency".The growth of international trade would boost demand for euros, with the result that the euro-zone could very cheaply finance an external deficit, much as the US has been doing for decades.
DEFINITION of 'Federal Reserve System - FRS'-The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States.
INVESTOPEDIA EXPLAINS 'Federal Reserve System - FRS'-You can divide the Federal Reserve's duties into four general areas:1. Conducting monetary policy-2. Regulating banking institutions and protecting the credit rights of consumers-3. Maintaining the stability of the financial system-4. Providing financial services to the U.S. government
DEFINITION of 'Central Bank'-The entity responsible for overseeing the monetary system for a nation (or group of nations). Central banks have a wide range of responsibilities, from overseeing monetary policy to implementing specific goals such as currency stability, low inflation and full employment. Central banks also generally issue currency, function as the bank of the government, regulate the credit system, oversee commercial banks, manage exchange reserves and act as a lender of last resort.
INVESTOPEDIA EXPLAINS 'Central Bank'-The central banking system in the U.S. is known as the Federal Reserve System (commonly known as "the Fed"), which is composed of 12 regional Federal Reserve Banks located in major cities throughout the country. The main tasks of the Federal Reserve are to supervise and regulate banks, implement monetary policy by buying and selling U.S. Treasury bonds and steer interest rates. Ben Bernanke currently serves as the chairman of the Board of Governors of the Federal Reserve.
DEFINITION of 'Monetary Policy'-The actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate, or changing the amount of money banks need to keep in the vault (bank reserves).
INVESTOPEDIA EXPLAINS 'Monetary Policy'-In the United States, the Federal Reserve is in charge of monetary policy. Monetary policy is one of the ways that the U.S. government attempts to control the economy. If the money supply grows too fast, the rate of inflation will increase; if the growth of the money supply is slowed too much, then economic growth may also slow. In general, the U.S. sets inflation targets that are meant to maintain a steady inflation of 2% to 3%.
DEFINITION of 'Eurocurrency'-Currency deposited by national governments or corporations in banks outside their home market. This applies to any currency and to banks in any country. For example, South Korean won deposited at a bank in South Africa, is considered eurocurrency.Also known as "euromoney."
INVESTOPEDIA EXPLAINS 'Eurocurrency'-Having "euro" doesn't mean that the transaction has to involve European countries. However, in practice, European countries are often involved.
DEFINITION of 'Reserve Currency'-A foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate. A large percentage of commodities, such as gold and oil, are usually priced in the reserve currency, causing other countries to hold this currency to pay for these goods. Holding currency reserves, therefore, minimizes exchange rate risk, as the purchasing nation will not have to exchange their currency for the current reserve currency in order to make the purchase.
INVESTOPEDIA EXPLAINS 'Reserve Currency'-In 2011, the U.S. dollar was the primary reserve currency used by other countries. As a result, foreign nations closely monitored the monetary policy of the United States in order to ensure that the value of their reserves is not adversely affected by inflation.(all definitions from-Investopedia http://www.investopedia.com/)
Reserve Currency Status Must be Earned-pc
People sometimes talk about “reserve currency” status as if it’s something that is taken by force or bestowed on some country. But what does it really mean to be a “reserve” currency? A reserve currency is simply a currency that is in high demand from other countries. It is a highly reliable and viable international currency. Of course, the USA is commonly thought of as the world’s “reserve” currency, but there are actually many reserve currencies like Yen and Euro as well. They’re not necessarily the same caliber reserve currency as dollars, but they’re very high up there.The reason why US dollars are the highest quality reserve currency is a function of demand. And the reason the dollar is in such high demand around the world is due to the fact that the US dollar is the currency that gives you access to 22% of world’s most high quality and productive output. The way this plays out in international markets is quite simple. China sells the USA pieces of plastic in exchange for Dollars. China doesn’t want the pieces of plastic. They want the Dollars because with those dollars comes domestic investment and domestic employment. China is better off in the long run by trading their pieces of plastic in exchange for domestic investment and employment. So, they end up with a “reserve” of dollars which they can either sit on, invest in T-bonds or implement other strategic measures.The key point there is to understand that China wants to do a lot of business with the USA. And they want to do a lot of business with the USA because the USA is the world’s largest economy. But it’s not just a large economy. It’s an economy that produces high quality and diverse output. This increases the demand for dollars on global markets because it is essentially the high quality asset in the world. A foreign government might be hesitant to own foreign currency, but when its backed by the most powerful multinational corporations on Earth that alleviates this concern a great deal. But this wasn’t something that was bestowed upon the USA. It was earned through hundreds of years of high quality growth.This is important to understand during a time when China is positioning to become a reserve currency. But the Chinese must remember something. Foreign countries don’t want to hold Yuan because the Chinese are a large economy. They will want to hold Yuan because they know they can trust the diversity of the output backing that currency as well as the political system that supports it. So far, the biggest hurdle to China’s reserve currency status is not its quantity or quality of output, but its government which insists on manipulating its credibility in an attempt to convince the world that this output is of higher quality than it really is.
How Much Longer Will the Dollar Remain the Reserve Currency of the World?-pc
The US Dollar’s status as a reserve currency seems to be a perennial concern for many people these days. I think this concern is often dramatically overstated. I was reminded of this point as I was reviewing the slides from Jeff Gundlach’s presentation yesterday which showed the following chart:As you can see, no one maintains reserve currency status forever. That shouldn’t be remotely surprising. The global economy is dynamic and market shares shift. And at the end of the day that’s what reserve status is really all about. Think about it – nations accumulate reserves of US dollars today because the US economy is the dominant player in global trade.Of course, the US Dollar isn’t the only currency that nations maintain reserves of. The Euro is also a major reserve currency and the Yuan is fast becoming a major reserve currency. But since the USA produces 22% of all world output it happens to play a particularly special role in the global economy. By virtue of being the largest economy in the world the accumulation of US dollar denominated financial assets happens to dominate the global financial system. It’s sort of like being the top market share producer of a particular product in a particular industry. Other entities accumulate your products because you’re the top producer. And that changes over time. Market shares change and regimes shift with the evolving economy.So, will the USA lose its reserve currency status at some point? Yes. In fact, it’s already starting to lose its reserve status to Europe and China. Will it be the end of the world and will it cause everyone to suddenly ditch the dollar? Probably not. It just means the USA will produce a lower proportion of global output and therefore, as a matter of accounting, the rest of the world will hold a lower percentage of US dollar denominated financial assets as a percentage of global output. It’s not the end of the world. It’s just a sign that market shares change and when you’re #1, well, there’s only one direction to go.
Currency Pegs-By Kati Pohjanpalo and Ye Xie | Updated Aug 20, 2015 3:45 AM EDT-bloomberg
In the rise and fall of world powers, the currency market keeps score. A nation’s money gains value when it’s a magnet for global investors; in times of trouble it weakens. The volatility can create havoc. To keep things in check, more than half of all countries have fixed the value of their money to another currency — mostly the U.S. dollar or the euro. They’ve hammered in a peg. The tie-ups can provide stability and foster trade, as Hong Kong’s link to the dollar has since 1983. Until they don’t. To hold most pegs in place, the central bank must use foreign reserves to buy or sell in currency markets in a battle with traders to keep the exchange rate stable. If pressure builds, policy makers will be forced to give up. The peg will slip or break — with sometimes disastrous consequences.-The Situation-China surprised global markets Aug. 11 with its first major devaluation of the yuan since 1994, as an economic slowdown weighed on the currency and the U.S. prepared to raise interest rates. The shift mounted pressure on trading partners, with Vietnam marking down is currency the following week and Kazakhstan moving to a free float Aug. 20. In January, Switzerland shocked traders by scrapping the franc’s three-year-old cap against the euro. The move forced the central bank in Denmark to defend the krone’s tie-up to the euro by repeatedly cutting interest rates. Russia spent the last months of 2014 struggling to halt the ruble’s steepest slide in 17 years as oil prices plunged. It abandoned efforts to manage the ruble’s flexible, or crawling, peg against a basket of currencies after spending more than $88 billion. Both Egypt and Nigeria have also effectively devalued in 2015. Though the currencies of most large countries and the 19-nation euro float freely, the trend is heading the other way: 34 percent of countries monitored by the International Monetary Fund gave the market free rein in 2014, down from 40 percent in 2008.-The Background-There are various systems for managing exchange rates, and some are more stable than others. Panama and Zimbabwe simply use the U.S. dollar as legal tender. Fixed rates are employed in countries from Bulgaria to Saudi Arabia to Venezuela. Singapore and China have employed different types of links to currencies of trading partners via bands that can move up or down. China has mostly used the arrangement to limit appreciation over the last decade, though it’s now allowing the yuan to fluctuate more in response to market forces. Hong Kong’s peg is seen as virtually impregnable because the total amount of local currency issued is backed by U.S. dollars in reserve, an arrangement known as a currency board. History is full of upheavals. The 1971 “Nixon shock” was sparked when President Richard Nixon abruptly ended the dollar’s convertibility to gold. It led to the end of the post-World War II Bretton Woods system that pegged currencies of industrialized countries to the U.S. The U.K. faced a storm in 1992, when investors including George Soros bet it wouldn’t be able to keep its pound within a pre-euro system of linked rates. It gave in on Sept. 16 and allowed the pound to float, a day known as Black Wednesday.The Argument-Currency pegs can put a central bank at the mercy of another country’s monetary and fiscal policy, so it must copy moves on interest rates. There’s less freedom to respond to domestic goals, such as reviving growth, creating jobs or containing prices. In Hong Kong, for example, easy-money policies in the U.S. have caused a surge in inflation and home prices. So why peg? More predictability for companies and investors. Tying policy makers’ hands may also lead to more disciplined government spending. For a peg to hold, the exchange rate must be set judiciously and kept in line. Since there’s no automatic rebalancing from trade flows, it’s easy for a peg to get out of whack. That can cause a currency to lose credibility and come under attack. Some countries -– like China, Egypt and Venezuela -– keep speculators at bay with capital controls that limit how much currency can be converted or rules that require banks to trade near official rates.First Published Jan. 30, 2015-To contact the writers of this QuickTake:Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net Ye Xie in New York at yxie6@bloomberg.net-To contact the editor responsible for this QuickTake:-Leah Harrison Singer at lharrison@bloomberg.net
Currency Wars-By Lucy Meakin | Updated Aug 11, 2015 3:28 PM EDT-bloomberg
Central bankers aren’t usually the ones who fight wars. But the global economy is a dangerous place, full of threats to prosperity. That’s given rise to the idea that there’s a tussle for competitive advantage going on, with each country brandishing its currency as a weapon. The standard view assumes policy makers are driving down exchange rates so that goods made by their exporters can be sold cheaper overseas, providing a jump-start to the economy at home. When other nations retaliate, it ignites a currency war. Central bankers say they’re not trying to pick fights. Rather, they’re cutting interest rates and taking other steps to stimulate growth. That creates spillover, however, as money flees for countries with higher rates, pushing currencies higher and hurting exporters. Whether intentional or not, these unspoken currency wars still create peril — and real winners and losers.-The Situation-The battle erupted again when China devalued the yuan in August. Earlier in the year, foreign-exchange markets were jolted when Switzerland surrendered its three-year-old limit for the franc against the euro and nations from Canada to Singapore unexpectedly eased monetary policy. At least 22 countries cut interest rates in the first quarter. At the same time, the European Central Bank began a bond-purchase program known as quantitative easing that helped send the euro to the lowest level against the U.S. dollar in more than a decade. The current conflict has simmered for years as the biggest countries fought their way out of the recession triggered by the 2008 financial crisis, with the U.S. and Japan also using bond-buying plans. As the recovery limped along, policy makers shifted their focus to warding off deflation, or a drop in prices that can cripple spending and sap growth. Most central banks have a mandate to keep prices stable, so when oil prices collapsed in late 2014, they were forced to act. Who’s taking the hit? Mainly the U.S., as the dollar strengthened against almost every other currency, threatening the profits of U.S. exporters.-The Background-Brazilian Finance Minister Guido Mantega gave the currency wars their name in 2010 when he denounced what he saw as the deliberate pursuit of weaker currencies. His country had been an early casualty in the fight, after lower U.S. rates sent money flowing into emerging markets, making Brazil’s commodity exports more expensive. One big winner was Japan, after the yen tumbled 28 percent against the dollar in two years, propelling profits for companies like Toyota. The most famous frenzy of competitive devaluations came during the Great Depression of the 1930s, as countries abandoned the gold standard that had pegged their currencies to the value of the metal. Until its collapse in 1971, the Bretton Woods system prevented a repeat of such beggar-thy-neighbor strategies by linking the value of many currencies to the dollar. Over the last decade, China has faced criticism for holding down the value of the yuan, as cheap goods helped transform the country into an exporting powerhouse.The Argument-With deflation-fearing central banks embracing unconventional policies to protect their economies, the race to the bottom has taken on new momentum. The fallout from unilateral moves can rattle markets, whipsaw capital flows and fuel volatility. More countries have tried to manage exchange rates though pegs to another currency. There are calls for clearer communication and a more united stance from the world’s central bankers, since currency fluctuations create uncertainty and can cramp investment. The G-20 group of countries has pledged not to target exchange rates for competitive purposes, though it stopped short of criticizing any nation for doing so. All the while, U.S. exporters are feeling the pain, putting the recovery of the world’s largest economy at risk. There’s a debate about how long the world’s economies can fight, and how they might make peace in the currency wars.
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