Part 2:
BACKDOC: CHATTY IRAN IS JUST BRAGGING THEIR PANTS OFF WHILE THE U.S. SLIPS IN THE BACK OF THE ROOM TO CATCH AN EAR FULL! HEE HEE (See article below)
ONCE THE DEBTS ARE SETTLED AND WE HOPE VERY SOON, IRAN WILL HAVE A CURRENCY OF COMPATIBILITY TO ITS SHIA BROTHER AND THE REST OF THE MONETARY REFORM WILL LAUNCH!
THIS IS WHAT WE WAIT FOR NOT IRAQ! IRAN! DOC IMO
Mountainman: Crazy huh.......Don't think for One Minute these Businesses and Countries are (NOT) Anticipating Iran's New Reality/Value that will Contribute to Their Respective Economies Bi-Laterally=In MORE Ways than ONE.......IMO
Blessings,Mountainman (8)=New Beginnings.......TOGETHER.....
....
BACKDOC: CHATTY IRAN IS JUST BRAGGING THEIR PANTS OFF WHILE THE U.S. SLIPS IN THE BACK OF THE ROOM TO CATCH AN EAR FULL! HEE HEE (See article below)
ONCE THE DEBTS ARE SETTLED AND WE HOPE VERY SOON, IRAN WILL HAVE A CURRENCY OF COMPATIBILITY TO ITS SHIA BROTHER AND THE REST OF THE MONETARY REFORM WILL LAUNCH!
THIS IS WHAT WE WAIT FOR NOT IRAQ! IRAN! DOC IMO
Mountainman: Crazy huh.......Don't think for One Minute these Businesses and Countries are (NOT) Anticipating Iran's New Reality/Value that will Contribute to Their Respective Economies Bi-Laterally=In MORE Ways than ONE.......IMO
Blessings,Mountainman (8)=New Beginnings.......TOGETHER.....
....
Thunderhawk: Iran Oil Show 2016 kicks off
The 21st International Oil, Gas and Petrochemical Exhibition started work here Thursday for four days.
Near 2,000 companies from Iran and 38 world countries have attended Iran Oil Show this year.
The exhibition is the first international oil show being held in Iran in the post-sanctions era.
Anti-Iran sanctions were lifted on January 16.
The participating countries include Germany, Ukraine, Belgium, France, Hong Kong, Armenia, India, Italy, UAE, Austria, Malaysia, China, Canada, Netherlands, Poland, Venezuela, South Korea, Russia, Spain, Turkey, UK, Azerbaijan, Norway, Brazil, Romania, Finland, Japan, New Zealand, Taiwan, Indonesia, Switzerland, Monaco, Australia, Sweden, Singapore, Portugal, Bulgaria and the US.
The US has attended the exhibition through its European agencies.
Some companies, including Germany's Siemens and Russia's Gazprom, were not attending Iran Oil Show in previous years due to sanctions imposed on Iran.
Iran's success in nuclear talks with world powers that led to July deal (known as the Joint Comprehensive Plan of Action) has prepared the ground for presence of the international companies in the country.
http://ift.tt/1Q84tKM
************
BACKDOC: WELL THUNDER, THEY WOULD HAVE TO COLLECT SOME SERIOUS REVENUE FROM CORPORATIONS AND THE ELITE TO PULL THIS OFF!
NOT BEING IN THE BASKET OF SDR CURRENCIES YET OZ WOULD HAVE TO BECOME MIGHTY GENEROUS INDEED.
WE WILL SEE INFLATION LIKELY GO FLAT GLOBALLY! OF COURSE COUNTRIES LIKE VIETNAM, IRAQ, IRAN, AND INDONESIA WILL HAVE GROWTH WHILE OTHER COUNTRIES WILL FALL INTO DEFLATION WHILE THEIR DEBT SOARS!
I FEAR THE THINNED SKINNED U.S. ECONOMY IS VERY VULNERABLE AND PEOPLE KNOW IT!
I EXPECT THE U.S. TO TRANSFORM ITS TAX SYTEM! DOC IMO
Mountainman: In this LIFE,Nothing is FREE........Everything has A PRICE TAG Attached to It and this is No Different......It Always Sounds Good Until One PEELS Back the Layers in the ONION.......LOL.......Will A Countries FUTURE SDR Account Play a part Here....Time will Tell for In these Socialistic Countries, More times than Not.....They Bury themselves in DEBT because of PROGRAMS Like this FAIL on Both Sides of the COIN........IMO
Blessings,Mountainman (8)=New Beginnings........for the REDISTRIBUTION of WEALTH......???
Thunderhawk: Hey DOC can we say SDR'S or what?
Global first? Every Swiss could be guaranteed $2,600 a month tax-free
GENEVA, Switzerland — Chalk it up to Swiss affluence. Voters here will decide next month whether all 8 million citizens and legal residents should be guaranteed a generous monthly income, something no country in the world has ever done.
On June 5, Swiss voters will weigh in on a radical proposal that would mandate the government to guarantee $2,600 a month tax-free to every adult citizen and legal resident, and $650 to each child.
The payment would be provided to everyone, regardless of work status, income level, or wealth. It is a benefit few countries can afford. But then, Switzerland is among the world's richest nations, with a per capita income of about $85,000, 40% higher than that in the USA.
The idea of an unconditional basic income is not new. It is being discussed by various cities in the Netherlands, Finland, Canada, New Zealand and other nations. But Switzerland is the first country to actually vote on a guaranteed income at the national level.
The latest polls show the proposal likely will go down in defeat, though supporters say they hope to build support for it in the coming weeks.
The initiative was put on the ballot by a group of artists, writers and intellectuals who made use of Switzerland's unique system of direct democracy, which allows any citizen to bring an issue to a referendum by collecting 100,000 legitimate signatures on a petition.
"This is a great idea," said Chloe Hubert, a student at the University of Geneva. "I only work on weekends, so this income would really help."
Though Swiss salaries are among the highest in the world, supporters say the stipend would offer people an option of reducing their working hours, while maintaining a decent standard of living.
“It would lead to a more motivated workforce and more humanized, stable and productive economy,” said Che Wagner, the initiative’s co-organizer and campaign manager.
Under the proposed law, the government would guarantee that every Swiss adult has at least $2,600 in monthly income after taxes. So if a person has no income at all, he or she will receive the full amount. If the person earns $1,600 now, the supplement would be $1,000.
Someone who currently earns, say, $6,500 month would not receive any money from the government but $2,600 of it would not be taxed.
For those getting welfare or other social benefits, payments of up to $2,600 a month would be replaced by the new basic income. Anything over this amount would continue to be provided as a separate payment and taxed accordingly.
Theoretically, a family of two non-working adults and two children at home would be eligible for $6,500 a month, or $78,000 a year tax-free. That's nearly twice the after-tax income of a typical American family.
The proposal has many critics. In a recent interview with Swiss Broadcasting Corporation, parliamentarian Raymond Clottu argued that the giveaway would "put at risk a system that motivates people to work and get training. So we should try to improve it, not bring in basic income which would destroy the motivation to work."
He and other opponents also note that financing the scheme, estimated to cost about $200 billion a year, would strain the government’s coffers.
The initiative’s backers say the plan would be funded, among other sources of revenue, by increasing Switzerland’s 8% value added tax.
The government counters that other taxes would have to rise and spending slashed to afford such a generous giveaway.
“Considerable cutbacks or tax rises would be necessary to finance this basic income, which could not replace today’s social security system entirely,” the government warns on its website, urging voters to reject the initiative.
As the concept of basic income gets traction across Europe, could a similar policy be adopted in the U.S.?
“Before it could be taken seriously, the middle class would need to experience far more job and wage loss than it has already,” Robert Reich, former U.S. secretary of Labor and now professor of public policy at the University of California, Berkeley, told USA TODAY.
“Unfortunately, those losses are inevitable,” he added. “We'll have a serious discussion about a minimum basic income about a decade from now.”
http://ift.tt/26X7NB7
************
BACKDOC: GET READY FOR THE NEW CURRENCY WAR. THE TPP WILL MARGINALIZE CHINA AND PREVENT THEM FROM CHEATING ON THEIR CURRENCY ANYMORE.
THE FACT STILL REMAINS THAT CHINA HAS MASSIVE GROWTH POTENTIAL WITHIN ITS OWN COUNTRY AS IT SHIFTS FROM AN EXPORTING ECONOMY TO A BALANCED AND INTERNAL ECONOMY!
WE WILL CONTINUE TO SEE CHINA RESTRUCTURE ITS BAD DEBTS FROM ITS ZOMBIE COMPANIES. THEY WILL CONTINUE TO MOVE TOWARD MORE PRIVATIZATION! DOC IMO
Mountainman: ALL Eyes are On CHINA......But I Like the way Buffett Described their Economy as {TRANSITIONING}......In Spite of their LOOMING Debt bubble He Knows The Reality that will Bolster the US/CHINA Relationship......In the Meantime A Downward Spiral is Rising Up.......
There are Winners and Losers as New Values are Coming Together. It Only Makes Sense that the TWO LARGEST Economies are Facing Economic Headwinds in this [TRANSITION]......It is as I said before, CONTROLLED CHAOS.....Cascading to
An END that will be Tumultuous Along the Way.......For Now we Must Be Patient and Confident (Knowing) the USA/CHINA Agreements Carry this Understanding of Each Other As Things Move towards A New Reality...... IMO
Blessings,Mountainman (8)=New Beginnings........for CHINA and The U S A'S FUTURE..........
Thunderhawk: Warren Buffett Optimistic on China's Economic Transition
Billionaire Warren Buffett, chairman and CEO of Berkshire Hathaway, said before the company's annual shareholders' meeting that he was still optimistic about China's economic development, and believed China's economic transition will be successful, the Sina Finance reported
.
Although China's economic slowdown and fluctuation in stock market has spooked global investors, when talking about the prospect of China's economy, Buffett said in an exclusive interview with Sina Finance that he had confidence in the country and believed that China's development will be better over time. Read more at:
http://ift.tt/1WNUSg6
************
BACKDOC: WE SEE THAT THIS DIVERSIFICATION WILL BE NEEDED SINCE OZ WILL CONTROL OIL SALES THROUGH SDR CURRENCY SETTLEMENTS!
THEY CAN OVER PRODUCE BUT IT WON'T HAVE ANYWHERE TO GO SINCE CONTRACTS WILL ULTIMATELY CONTROL PRICES AND SUPPLY!
DEMAND WILL TAKE A BACK SEAT TO TPP AND CONTRACTS NOW THAT OZ IS USING THE UNIVERSAL CURRENCY BLACK GOLD AS THE NEW RESERVE CURRENCY!
SOON THE GOLD BUGS WILL BE DISAPPOINTED WHEN METALS DROP WITH THE MARKETS!
STILL ITS A GREAT SECURITIZED ASSET RELATIVE TO THE DOLLAR BUT WHY NOT OWN ASSET BACKED BONDS OR THE ACTUAL CURRENCIES THAT ARE SUPPORTING THE SDR? MMMMM DOC IMO
Thunderhawk: Backdoc Alert
IMF: Oil Producers Must Diversify to Mitigate Likelihood of Volatility
IMF fiscal policy division chief Benedict Clements claims that large oil producing nations should adopt policies aimed at economic diversification to limit the impact of future oil price volatility.
Large oil producing nations should adopt policies aimed at economic diversification to limit the impact of future oil price volatility, International Monetary Fund (IMF) fiscal policy division chief Benedict Clements told Sputnik.
"There is still an expectation that oil price volatility could potentially continue… We are saying, in effect, that economic diversification would help deal with some of this volatility, in the sense of if you're overly reliant on the oil sector then when bad times come in the oil sector, you are not as vulnerable," Clements said on Wednesday.
Clements explained that the levels of oil price volatility continue to be uncertain with a wide spread of predictions. Some market participants anticipate a rebound in oil prices into the $120 per barrel range in the next four years. Others have predicted prices will remain close to $30 per barrel.
According to an IMF report co-authored by Clements, oil rich nations are facing "one of the largest boom-bust cycles" to hit the market in more than 100 years.
"One thing many countries need to do also is provide adequate financing for small and medium-sized enterprises, really help provide the fundamentals behind a diversified economy," Clements advised.
The IMF has also encouraged large oil revenue-dependent nations to "level the playing field," creating equal incentives for oil and non-oil sector producers, Clements added. Proposed measures include ending subsidies to the oil sector, reforming labour markets, and reallocating revenue to stimulate the private sector.
Oil prices have collapsed substantially over the past two years, from a high of more than $108 in June 2014 to less than $30 per barrel in January 2016. Prices have rebound modestly in the recent months to slightly below $40 per barrel.
Official estimates by the IMF in April forecast global commodity prices would remain weak for a longer period of time, increasing pressure on commodity dependent economies.
The World Bank issued a similar forecast earlier in the year, citing slow global economic growth and oversupplied commodity markets as key contributors.
http://ift.tt/21Eb9oP
The 21st International Oil, Gas and Petrochemical Exhibition started work here Thursday for four days.
Near 2,000 companies from Iran and 38 world countries have attended Iran Oil Show this year.
The exhibition is the first international oil show being held in Iran in the post-sanctions era.
Anti-Iran sanctions were lifted on January 16.
The participating countries include Germany, Ukraine, Belgium, France, Hong Kong, Armenia, India, Italy, UAE, Austria, Malaysia, China, Canada, Netherlands, Poland, Venezuela, South Korea, Russia, Spain, Turkey, UK, Azerbaijan, Norway, Brazil, Romania, Finland, Japan, New Zealand, Taiwan, Indonesia, Switzerland, Monaco, Australia, Sweden, Singapore, Portugal, Bulgaria and the US.
The US has attended the exhibition through its European agencies.
Some companies, including Germany's Siemens and Russia's Gazprom, were not attending Iran Oil Show in previous years due to sanctions imposed on Iran.
Iran's success in nuclear talks with world powers that led to July deal (known as the Joint Comprehensive Plan of Action) has prepared the ground for presence of the international companies in the country.
http://ift.tt/1Q84tKM
************
BACKDOC: WELL THUNDER, THEY WOULD HAVE TO COLLECT SOME SERIOUS REVENUE FROM CORPORATIONS AND THE ELITE TO PULL THIS OFF!
NOT BEING IN THE BASKET OF SDR CURRENCIES YET OZ WOULD HAVE TO BECOME MIGHTY GENEROUS INDEED.
WE WILL SEE INFLATION LIKELY GO FLAT GLOBALLY! OF COURSE COUNTRIES LIKE VIETNAM, IRAQ, IRAN, AND INDONESIA WILL HAVE GROWTH WHILE OTHER COUNTRIES WILL FALL INTO DEFLATION WHILE THEIR DEBT SOARS!
I FEAR THE THINNED SKINNED U.S. ECONOMY IS VERY VULNERABLE AND PEOPLE KNOW IT!
I EXPECT THE U.S. TO TRANSFORM ITS TAX SYTEM! DOC IMO
Mountainman: In this LIFE,Nothing is FREE........Everything has A PRICE TAG Attached to It and this is No Different......It Always Sounds Good Until One PEELS Back the Layers in the ONION.......LOL.......Will A Countries FUTURE SDR Account Play a part Here....Time will Tell for In these Socialistic Countries, More times than Not.....They Bury themselves in DEBT because of PROGRAMS Like this FAIL on Both Sides of the COIN........IMO
Blessings,Mountainman (8)=New Beginnings........for the REDISTRIBUTION of WEALTH......???
Thunderhawk: Hey DOC can we say SDR'S or what?
Global first? Every Swiss could be guaranteed $2,600 a month tax-free
GENEVA, Switzerland — Chalk it up to Swiss affluence. Voters here will decide next month whether all 8 million citizens and legal residents should be guaranteed a generous monthly income, something no country in the world has ever done.
On June 5, Swiss voters will weigh in on a radical proposal that would mandate the government to guarantee $2,600 a month tax-free to every adult citizen and legal resident, and $650 to each child.
The payment would be provided to everyone, regardless of work status, income level, or wealth. It is a benefit few countries can afford. But then, Switzerland is among the world's richest nations, with a per capita income of about $85,000, 40% higher than that in the USA.
The idea of an unconditional basic income is not new. It is being discussed by various cities in the Netherlands, Finland, Canada, New Zealand and other nations. But Switzerland is the first country to actually vote on a guaranteed income at the national level.
The latest polls show the proposal likely will go down in defeat, though supporters say they hope to build support for it in the coming weeks.
The initiative was put on the ballot by a group of artists, writers and intellectuals who made use of Switzerland's unique system of direct democracy, which allows any citizen to bring an issue to a referendum by collecting 100,000 legitimate signatures on a petition.
"This is a great idea," said Chloe Hubert, a student at the University of Geneva. "I only work on weekends, so this income would really help."
Though Swiss salaries are among the highest in the world, supporters say the stipend would offer people an option of reducing their working hours, while maintaining a decent standard of living.
“It would lead to a more motivated workforce and more humanized, stable and productive economy,” said Che Wagner, the initiative’s co-organizer and campaign manager.
Under the proposed law, the government would guarantee that every Swiss adult has at least $2,600 in monthly income after taxes. So if a person has no income at all, he or she will receive the full amount. If the person earns $1,600 now, the supplement would be $1,000.
Someone who currently earns, say, $6,500 month would not receive any money from the government but $2,600 of it would not be taxed.
For those getting welfare or other social benefits, payments of up to $2,600 a month would be replaced by the new basic income. Anything over this amount would continue to be provided as a separate payment and taxed accordingly.
Theoretically, a family of two non-working adults and two children at home would be eligible for $6,500 a month, or $78,000 a year tax-free. That's nearly twice the after-tax income of a typical American family.
The proposal has many critics. In a recent interview with Swiss Broadcasting Corporation, parliamentarian Raymond Clottu argued that the giveaway would "put at risk a system that motivates people to work and get training. So we should try to improve it, not bring in basic income which would destroy the motivation to work."
He and other opponents also note that financing the scheme, estimated to cost about $200 billion a year, would strain the government’s coffers.
The initiative’s backers say the plan would be funded, among other sources of revenue, by increasing Switzerland’s 8% value added tax.
The government counters that other taxes would have to rise and spending slashed to afford such a generous giveaway.
“Considerable cutbacks or tax rises would be necessary to finance this basic income, which could not replace today’s social security system entirely,” the government warns on its website, urging voters to reject the initiative.
As the concept of basic income gets traction across Europe, could a similar policy be adopted in the U.S.?
“Before it could be taken seriously, the middle class would need to experience far more job and wage loss than it has already,” Robert Reich, former U.S. secretary of Labor and now professor of public policy at the University of California, Berkeley, told USA TODAY.
“Unfortunately, those losses are inevitable,” he added. “We'll have a serious discussion about a minimum basic income about a decade from now.”
http://ift.tt/26X7NB7
************
BACKDOC: GET READY FOR THE NEW CURRENCY WAR. THE TPP WILL MARGINALIZE CHINA AND PREVENT THEM FROM CHEATING ON THEIR CURRENCY ANYMORE.
THE FACT STILL REMAINS THAT CHINA HAS MASSIVE GROWTH POTENTIAL WITHIN ITS OWN COUNTRY AS IT SHIFTS FROM AN EXPORTING ECONOMY TO A BALANCED AND INTERNAL ECONOMY!
WE WILL CONTINUE TO SEE CHINA RESTRUCTURE ITS BAD DEBTS FROM ITS ZOMBIE COMPANIES. THEY WILL CONTINUE TO MOVE TOWARD MORE PRIVATIZATION! DOC IMO
Mountainman: ALL Eyes are On CHINA......But I Like the way Buffett Described their Economy as {TRANSITIONING}......In Spite of their LOOMING Debt bubble He Knows The Reality that will Bolster the US/CHINA Relationship......In the Meantime A Downward Spiral is Rising Up.......
There are Winners and Losers as New Values are Coming Together. It Only Makes Sense that the TWO LARGEST Economies are Facing Economic Headwinds in this [TRANSITION]......It is as I said before, CONTROLLED CHAOS.....Cascading to
An END that will be Tumultuous Along the Way.......For Now we Must Be Patient and Confident (Knowing) the USA/CHINA Agreements Carry this Understanding of Each Other As Things Move towards A New Reality...... IMO
Blessings,Mountainman (8)=New Beginnings........for CHINA and The U S A'S FUTURE..........
Thunderhawk: Warren Buffett Optimistic on China's Economic Transition
Billionaire Warren Buffett, chairman and CEO of Berkshire Hathaway, said before the company's annual shareholders' meeting that he was still optimistic about China's economic development, and believed China's economic transition will be successful, the Sina Finance reported
.
Although China's economic slowdown and fluctuation in stock market has spooked global investors, when talking about the prospect of China's economy, Buffett said in an exclusive interview with Sina Finance that he had confidence in the country and believed that China's development will be better over time. Read more at:
http://ift.tt/1WNUSg6
************
BACKDOC: WE SEE THAT THIS DIVERSIFICATION WILL BE NEEDED SINCE OZ WILL CONTROL OIL SALES THROUGH SDR CURRENCY SETTLEMENTS!
THEY CAN OVER PRODUCE BUT IT WON'T HAVE ANYWHERE TO GO SINCE CONTRACTS WILL ULTIMATELY CONTROL PRICES AND SUPPLY!
DEMAND WILL TAKE A BACK SEAT TO TPP AND CONTRACTS NOW THAT OZ IS USING THE UNIVERSAL CURRENCY BLACK GOLD AS THE NEW RESERVE CURRENCY!
SOON THE GOLD BUGS WILL BE DISAPPOINTED WHEN METALS DROP WITH THE MARKETS!
STILL ITS A GREAT SECURITIZED ASSET RELATIVE TO THE DOLLAR BUT WHY NOT OWN ASSET BACKED BONDS OR THE ACTUAL CURRENCIES THAT ARE SUPPORTING THE SDR? MMMMM DOC IMO
Thunderhawk: Backdoc Alert
IMF: Oil Producers Must Diversify to Mitigate Likelihood of Volatility
IMF fiscal policy division chief Benedict Clements claims that large oil producing nations should adopt policies aimed at economic diversification to limit the impact of future oil price volatility.
Large oil producing nations should adopt policies aimed at economic diversification to limit the impact of future oil price volatility, International Monetary Fund (IMF) fiscal policy division chief Benedict Clements told Sputnik.
"There is still an expectation that oil price volatility could potentially continue… We are saying, in effect, that economic diversification would help deal with some of this volatility, in the sense of if you're overly reliant on the oil sector then when bad times come in the oil sector, you are not as vulnerable," Clements said on Wednesday.
Clements explained that the levels of oil price volatility continue to be uncertain with a wide spread of predictions. Some market participants anticipate a rebound in oil prices into the $120 per barrel range in the next four years. Others have predicted prices will remain close to $30 per barrel.
According to an IMF report co-authored by Clements, oil rich nations are facing "one of the largest boom-bust cycles" to hit the market in more than 100 years.
"One thing many countries need to do also is provide adequate financing for small and medium-sized enterprises, really help provide the fundamentals behind a diversified economy," Clements advised.
The IMF has also encouraged large oil revenue-dependent nations to "level the playing field," creating equal incentives for oil and non-oil sector producers, Clements added. Proposed measures include ending subsidies to the oil sector, reforming labour markets, and reallocating revenue to stimulate the private sector.
Oil prices have collapsed substantially over the past two years, from a high of more than $108 in June 2014 to less than $30 per barrel in January 2016. Prices have rebound modestly in the recent months to slightly below $40 per barrel.
Official estimates by the IMF in April forecast global commodity prices would remain weak for a longer period of time, increasing pressure on commodity dependent economies.
The World Bank issued a similar forecast earlier in the year, citing slow global economic growth and oversupplied commodity markets as key contributors.
http://ift.tt/21Eb9oP
BACKDOC: THE REAL ISSUE IS THE DOLLAR PEG!
S.A. NEEDS PURCHASING POWER SIMILAR TO ITS NEIGHBORS!
THEY HAVE EXPRESSED THEIR DESIRE TO DEPART FROM IT.
THIS WEEK WE SEE ARTICLES FROM THE UK PUTTING MILITARY SHIPMENTS ON HOLD. THE U.S. SEEMS TO BE DOING THE SAME. SOMETHING IS DEFINITELY DEVELOPING!
WE MAY NOT KNOW HOW THIS PLAYS OUT BUT WE KNOW WHY IT WILL PLAY OUT, DON'T WE? HEE HEE DOC IMO
Mountainman: Looks Like The SAUDI'S are Caught between A Rock and A hard Place On One Hand......On the Other This is ALL about the Transition of OIL from the Current Petro Dollar to the SDR Accounts as Well.....The Hands are being Played and COORDINATION of this OIL CONVERGENCE is A Reality NO/{ONE} will be Able to Run From.......IMO
Blessings,Mountainman (8)=New Beginnings......for Old Pains for New GAINS......
Thunderhawk: Why Riyadh 'Dumping' Dollar-Denominated Bonds Will not Derail US Economy
In recent weeks, rumors have circulated that Saudi Arabia may sell $750 billion in US dollar-denominated bonds if 28 pages of the redacted 9/11 report are released. The information contained is said to show Saudi Arabia’s complicity in the deadliest terrorist attacks on American soil.
However, such rumors are "much ado about nothing," William T. Wilson, a senior research fellow in the Davis Institute for National Security and Foreign Policy, wrote in an article for The National Interest.
The drop in global oil prices has seriously damaged the kingdom’s economy. Currently, Riyadh needs oil prices to be around $80 a barrel to balance its budget. This year, its fiscal deficit is expected to reach 19 percent of GDP. Last year, the kingdom saw a current account deficit of 8.2 percent of GDP. All of the above has forced Saudi authorities to begin liquidating reserves to cover financial shortfalls.
Saudi Arabia is the third-largest holder of US dollar reserves and a significant owner of dollar-denominated assets.
The author outlined several reasons why a possible sell-off by Saudi Arabia is highly unlikely to affect the US economy or global financial markets.
First of all, selling hundreds of billions of US dollars in American assets over a short period of time would be technically very difficult to execute, the article read.
But even if assuming the Saudis could, the move would result in the depreciation of the US dollar, which would result in capital losses for their remaining dollar reserves.
"With their sovereign credit rating having recently been downgraded, this scenario would hardly be appealing to the Saudi authorities," the analyst pointed out.
Second, given that all dollar-denominated transactions pass through US transaction systems, after selling their dollar assets, Riyadh would then have to sell all or most of their dollar holdings.
However, switching to other currencies involves increased financial risks.
"The US dollar is still easily considered the greatest safe haven in the world compared to alternatives, such as the euro, that currently look very unappealing," Wilson underscored.
Third, the foreign exchange market is liquid enough to handle a significant surge in foreign exchange transactions. Currently, global foreign exchange-rate markets are averaging $5 trillion in trading a day, 80 percent of it in dollars.
Furthermore, the figure of $750 billion looks like an overstatement. The Saudi Arabia’s sovereign wealth fund was valued at $750 in 2014, but has decreased to $685 billion in 2016. In addition, not all of their holdings are dollar-denominated.
Finally, in the event of a significant market shock where US Treasuries prices were to drop and domestic interest rates rise, the Federal Reserve could accommodate the movement by buying Treasuries through open-market conditions, according to the article.
"Dumping US bonds is not really an option for any country holding major positions. To the extent that the number of bonds the United States sells is a problem — and it is a problem — it is not because it gives others leverage over America. It is because it is reflective of decades of out-of-control spending, which must be addressed for the sake of the country’s long-term economic health," the analyst concluded.
http://ift.tt/1WNUSg8
S.A. NEEDS PURCHASING POWER SIMILAR TO ITS NEIGHBORS!
THEY HAVE EXPRESSED THEIR DESIRE TO DEPART FROM IT.
THIS WEEK WE SEE ARTICLES FROM THE UK PUTTING MILITARY SHIPMENTS ON HOLD. THE U.S. SEEMS TO BE DOING THE SAME. SOMETHING IS DEFINITELY DEVELOPING!
WE MAY NOT KNOW HOW THIS PLAYS OUT BUT WE KNOW WHY IT WILL PLAY OUT, DON'T WE? HEE HEE DOC IMO
Mountainman: Looks Like The SAUDI'S are Caught between A Rock and A hard Place On One Hand......On the Other This is ALL about the Transition of OIL from the Current Petro Dollar to the SDR Accounts as Well.....The Hands are being Played and COORDINATION of this OIL CONVERGENCE is A Reality NO/{ONE} will be Able to Run From.......IMO
Blessings,Mountainman (8)=New Beginnings......for Old Pains for New GAINS......
Thunderhawk: Why Riyadh 'Dumping' Dollar-Denominated Bonds Will not Derail US Economy
In recent weeks, rumors have circulated that Saudi Arabia may sell $750 billion in US dollar-denominated bonds if 28 pages of the redacted 9/11 report are released. The information contained is said to show Saudi Arabia’s complicity in the deadliest terrorist attacks on American soil.
However, such rumors are "much ado about nothing," William T. Wilson, a senior research fellow in the Davis Institute for National Security and Foreign Policy, wrote in an article for The National Interest.
The drop in global oil prices has seriously damaged the kingdom’s economy. Currently, Riyadh needs oil prices to be around $80 a barrel to balance its budget. This year, its fiscal deficit is expected to reach 19 percent of GDP. Last year, the kingdom saw a current account deficit of 8.2 percent of GDP. All of the above has forced Saudi authorities to begin liquidating reserves to cover financial shortfalls.
Saudi Arabia is the third-largest holder of US dollar reserves and a significant owner of dollar-denominated assets.
The author outlined several reasons why a possible sell-off by Saudi Arabia is highly unlikely to affect the US economy or global financial markets.
First of all, selling hundreds of billions of US dollars in American assets over a short period of time would be technically very difficult to execute, the article read.
But even if assuming the Saudis could, the move would result in the depreciation of the US dollar, which would result in capital losses for their remaining dollar reserves.
"With their sovereign credit rating having recently been downgraded, this scenario would hardly be appealing to the Saudi authorities," the analyst pointed out.
Second, given that all dollar-denominated transactions pass through US transaction systems, after selling their dollar assets, Riyadh would then have to sell all or most of their dollar holdings.
However, switching to other currencies involves increased financial risks.
"The US dollar is still easily considered the greatest safe haven in the world compared to alternatives, such as the euro, that currently look very unappealing," Wilson underscored.
Third, the foreign exchange market is liquid enough to handle a significant surge in foreign exchange transactions. Currently, global foreign exchange-rate markets are averaging $5 trillion in trading a day, 80 percent of it in dollars.
Furthermore, the figure of $750 billion looks like an overstatement. The Saudi Arabia’s sovereign wealth fund was valued at $750 in 2014, but has decreased to $685 billion in 2016. In addition, not all of their holdings are dollar-denominated.
Finally, in the event of a significant market shock where US Treasuries prices were to drop and domestic interest rates rise, the Federal Reserve could accommodate the movement by buying Treasuries through open-market conditions, according to the article.
"Dumping US bonds is not really an option for any country holding major positions. To the extent that the number of bonds the United States sells is a problem — and it is a problem — it is not because it gives others leverage over America. It is because it is reflective of decades of out-of-control spending, which must be addressed for the sake of the country’s long-term economic health," the analyst concluded.
http://ift.tt/1WNUSg8
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