Dollar 'world's strongest currency': Japanese minister

From: Yahoo Financial Service

TOKYO (AFP) - – Japan's finance minister said Tuesday that the dollar was still the world's strongest currency and it was natural for Tokyo to keep large stockpiles of the greenback.

"It is clear that the dollar is still the world's strongest currency," Finance Minister Hirohisa Fujii said at a press conference.

"It is a matter of course that the country keeps its foreign exchange reserves in a strong currency."

This in turn "also supports the dollar," he added.

Japan has the world's second-largest forex reserves after China. Tokyo gives no breakdown of the currencies, but most are believed to be held in dollars as a result of past intervention to sell the yen against the greenback.

Fujii said countries should not seek to artificially weaken their currencies to boost the competitiveness of their exports, but also reiterated that he was not necessarily in favour of a stronger yen.

"It would have a negative impact on the world's economic and political conditions if each nation engages in a race to devalue their currencies," he said.

Japan has not intervened in the foreign exchange market since March 2004, allowing the yen to find its own level against the dollar.

Fujii has said on several occasions since taking his post last month that in principle he opposes action to curb the strength of the yen, which hurts Japanese exporters' earnings.

But he has also said Tokyo does not rule out stepping into the market to sell the currency "in an abnormal situation."

The dollar hit an eight-month low against the Japanese currency last month, dropping below the 89 yen level, as the greenback came under broad pressure.

But it has since recovered some ground, striking a five-week high of 92.33 yen early in Tokyo trade on Tuesday.


*There is something wrong with the facts of this article, can you spot it? If you can't then you would probably want to read the older posts in this blog.

Chinese sovereign wealth fund dumping dollars for strategic investments like gold

By: Lawrence Williams

LONDON -Several reports are coming out of China that there is pressure on state-controlled organisations - notably the country's main sovereign wealth fund, China Investment Corporation (CIC) to rapidly build investment in non-Chinese enterprises. While the CIC itself, with apparent access to some $300 billion in funds - and the possibility of more from the government - may be concentrating on hedge funds and other investment entities, there is another sector for Chinese state-owned companies looking at major investment in commodities. Indeed with the funds available as China seems to be dumping its US dollars in favour of more concrete assets, virtually no minerals sector is safe from Chinese participation.

While CIC was set up only two years ago, funded with $200 billion in initial capital, a report to the U.S. Congress noted that according to top Chinese officials, it was created to improve the rate of return on China's $1.5 trillion in foreign exchange reserves and to soak up some of the nation's excess financial liquidity. Depending on its performance with the initial allotment of $200 billion, the CIC might be allocated more of China's growing stock of foreign exchange reserves - and this has already proved to be the case.

Probably the most interesting of the recent reports of what is happening with Chinese sovereign wealth fund investment outside China has come from Paul Mylchreest's Thunder Road Report where an ex-U.S. intelligence service member is quoted. He reports that he has a friend who is in the Chinese Sovereign Wealth fund sector who says - hearsay I know and it wouldn't stand up in court - indicated that the wealth fund analysts were working all hours of the day and night trying to put investment deals together - particularly in the oil and precious metals sectors. The conclusion is that China recognises that the U.S. dollar is going to tank and it wants to convert as much of its trillions of dollars of holdings into strategic assets as possible before the collapse really takes hold.

The trouble is there is too much money available chasing too few assets - and too little time available - or such is the conclusion. As a result the Chinese government seems to be doing its utmost in trying to persuade the Chinese public to buy gold and silver by relaxing the restrictions - it's now easier to buy precious metals in China than in the U.S. - and by pushing gold and silver investment on state-owned television. If this continues the likelihood is that China will permanently overtake India as the world's biggest buyer of gold and silver, while the country's store of wealth will help shield it against further western economic collapse.

**How much of your portfolio is in precious metals? Now is a good time to buy and invest.

INDIA also questioning US $ Dominance

Sunday, 05 July 2009 19:00
BLOOMBERG

Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6-billion foreign-exchange reserves and hold fewer dollars.

“The major part of Indian reserves is in dollars—that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview in Aix-en-Provence, France, where he was attending an economic conference.

Singh is preparing to join leaders from the Group of Eight industrialized nations—the United States, Japan, Germany, Britain, France, Italy, Canada and Russia—at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representative to the summit.

As the talks have neared, China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.

“There should be a system to maintain the stability of the major reserve currencies,” Former Chinese Vice Premier Zeng Peiyan said in a speech in Beijing, highlighting China’s concerns about a global financial system dominated by the dollar.

Fiscal and current-account deficits must be supervised as “your currency is likely to become my problem,” said Zeng, who is now the head of a research center under the government’s top economic planning agency. The People’s Bank of China said June 26 that the International Monetary Fund should manage more of members’ reserves.

Russian President Dmitry Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the dollar’s future as a global reserve currency. Russia’s proposals for the Group of 20 major developed and developing nations summit in London in April included the creation of a supranational currency.

“We will resume” talks on the supranational currency proposal at the G-8 summit in L’Aquila on July 8-10, Medvedev aide Sergei Prikhodko told reporters in Moscow. Bloomberg

Singh adviser Tendulkar said that big dollar holders face a “prisoner’s dilemma” in terms of managing their holdings. “That’s why I’m telling them to do this,” he said.

He also said that world currencies need to adjust to help unwind trade imbalances that have contributed to the global financial crisis.

“The major imbalances which led to the current situation, the current account surpluses and deficits, have to be addressed,” he said. “Currency adjustment is one thing that suggests itself.”

For all the complaints about the dollar, emerging markets such as India remain dependent on the currency of the United States, the world’s largest economy and a $2.5-trillion export market. The International Monetary Fund said June 30 that the share of dollars in global foreign-exchange reserves increased to 65 percent in the first three months of this year, the highest since 2007.

Tendulkar said that the matter needs to be taken up in international talks, and that it emphasizes the need for those talks to go beyond the traditional G-8.

“They can meet if they want to,” he said. “The G-20 has a wider role, has representation of the countries that are likely to lead the recovery process.” (Bloomberg)

*And the dollar goes tumbling down as nations call the rethinking of the global currency reserve.

What are the BIG BOYS up to?

for GoldSilver.com (April 07, 2009)

“The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the VALUE OF EVERYTHING PRODUCED in the country last year.”

- Bloomberg

Again - that’s $12.8 TRILLION – in only a half year’s time.

So, where are we headed? How about $25 trillion - perhaps that amount will solve the crisis?

Unfortunately the worldwide problem of debt cannot be solved by creating more debt.

Meanwhile last week The G20 met in London. The political leaders from the 20 major nations blasted images and press releases across the globe assuring everyone that they and their central banks have answers for the crisis they helped create.

Any documented proposals to a solution?

No, just more money pledged for the IMF ($750 billion additional) and a picture of 20 politicians with a globe behind them.

Look and you will find vague promises of joint action while on the sidelines countries are covertly making plans to assure that they are not left holding the dollar bag.

"The People's Bank of China has agreed to provide 650 billion Yuan ($95 billion) to Argentina, Belarus, Hong Kong, Indonesia, Malaysia, and South Korea through so-called currency swaps. More such arrangements are being planned so importers can avoid paying for Chinese goods with dollars, the central bank said."

- Bloomberg



Countries are looking for less exposure to the dollar. The above nations are publicly taking the necessary steps to insure their wealth against a very possible dollar collapse.

This makes us wonder, are there other countries doing this behind the scenes as well?

Who else doesn’t want to be left holding greenbacks when the dollar crumbles?

Well ---> WE DON’T!

Here at GoldSilver.com every dollar we make is converted into precious metals. We refuse to allow bailouts, The G20, or debased currencies to dilute our wealth.

It used to be that governments backed their currency by gold and/or silver. This gave the currency real legitimacy as it could be exchanged for something of true scarcity (it was a TRUE store of value). Governments and central banks consequently could not be print their currencies into extinction.

Well, the U.S.A. cut its final link to gold in 1971 and no other currency is backed by anything tangible either.

All are paper.

This has been tried many times before by governments around the world throughout history and it has ALWAYS led to the same disastrous result for the currency.

There however is a very bright side and an opportunity for those who understand what is going on today and take the appropriate actions.

We hope to lead by example and we encourage everyone to become YOUR OWN CENTRAL BANK and hold true wealth during this crisis period.

Weaker U.S. Dollar Boosts Gold and Silver

(CEP News) - Gold prices are extending their gains Thursday as the U.S. dollar continues to tumble lower.

Gold, along with all commodities, appears to be benefiting from the FOMC decision to implement major quantitative easing measures on Wednesday. The Fed announced that it would expand its balance sheet by almost $1.2 trillion, which includes purchasing $300 billion in longer-term Treasuries.
Thu Mar 19, 2009 12:05pm

Gold prices sold off modestly in overnight trading, but prices held around $930 an ounce and sharply recovered just ahead of the North American trading session. Renewed pressure on the U.S. dollar at 8 a.m. EDT helped to push gold prices to session highs. Gold is trading just below $960.

In the last two days, CBOT spot prices have climbed over $75 dollars and commodity strategists are looking for further gains, as investors move into gold as a hedge against inflation.

Along with gold prices, silver has also done extremely well. Although the precious metal didn't receive much of a boost following the FOMC announcement and ended the day around $12 an ounce, it has outperformed gold on Thursday. CBOT silver futures started rallying during the European session and have been on a steady rise, jumping over 8% during the trading day.

Mike Glaser, futures broker at LaSalle Futures, said he is expecting all commodities to be underpriced as the U.S. dollar index eventually falls close to 70.0.

"I think with all this money the U.S. government is printing, inflation is going to be the main concern going forward," he said.

*The US is robbing the currencies by printing more Dollars. Each currency that gets out of the printing press robs the value of each dollar and peso that is in our bank accounts and payrolls. Indeed, they are letting the world pay for the financial errors of their people, this 'robin hoodlum' scheme will not last as other countries will slowly dump their dollars and replace it with something more stable.