Russia To Call For New World Currency At G20 Talks

Russia yesterday published its list of demands for upcoming discussions at the next G20 talks, and top of the list was a new “superreserve currency”. Angered by the dominance of the US dollar as the global reserve currency, the Kremlin said in a statement issued on its website that the IMF should look into the creation of an alternative “accepted by the whole of the international community”.

But according to ‘The Moscow Times’, the idea would receive little support outside of Russia. “This is all in the realm of fantasy,” said Sergei Perminov, chief strategist at Rye, Man and Gore. “There was a situation that resembled what they are talking about. It was called the gold standard, and it ended very badly.”

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Experts Warn Of Massive Dollar Collapse

Peter Schiff warns of imminent collapse of  the US dollar and dire days ahead for US.   Watch The Video

Bank of England policymaker Willem Buiter says Americans should prepare now.

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Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.

The long-held assumption that US assets – particularly government bonds – are a safe haven will soon be overturned as investors lose their patience with the world’s biggest economy, according to Willem Buiter.

Professor Buiter, a former Monetary Policy Committee member who is now at the London School of Economics, said this increasing disenchantment would result in an exodus of foreign cash from the US.

The warning comes despite the dollar having strengthened significantly against other major currencies, including sterling and the euro, after hitting historic lows last year. It will reignite fears about the currency’s prospects, as well as sparking fears about the sustainability of President-Elect Barack Obama’s mooted plans for a Keynesian-style increase in public spending to pull the US out of recession.

Writing on his blog , Prof Buiter said: “There will, before long (my best guess is between two and five years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury bills and bonds are still viewed as a safe haven by many. But learning takes place.”

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Dollar Spirals Downward

The world’s biggest currency-trading firms say the dollar’s appeal as a haven amid the financial crisis all but evaporated.

The U.S. currency slid to a 13-year low against the yen today and had its biggest one-day decline versus the euro after the Federal Reserve reduced its target interest rate yesterday to a range of zero to 0.25 percent, the lowest among the world’s biggest economies. CMC Markets said today the currency’s prospects appear “ominous.” State Street Global markets said the dollar’s outlook has been “undermined.”

“The dollar has been under heavy downward pressure,” said Robert Minikin, a senior currency strategist in London at Standard Chartered Bank Plc. “This move is very well-justified and has a long way to run.” Standard Chartered is preparing to cut its dollar forecasts, Minikin said.

Yesterday’s rate cut brings the Fed’s target to below the Bank of Japan’s for the first time since January 1993. U.S. policy makers repeated plans to buy agency debt and mortgage- backed securities and said they will study buying Treasuries, a policy known as quantitative easing.

The dollar fell to 87.14 yen, the lowest since July 1995, before trading at 87.45 yen as of 3:51 p.m. in New York, from 89.05 yesterday. It depreciated to $1.4437 per euro from $1.4002 and traded at $1.4366, the weakest since Sept. 30.

‘Ominous’ Outlook

The dollar is likely to decline “longer term,” analysts including New York-based Ashraf Laidi at CMC Markets wrote in a report. “Prospects ahead appear particularly ominous for the world’s reserve currency once global economic stability starts to build up.”

via Bloomberg.com: News.

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One World Financial System – One World Currency Is The End Game

Glenn Beck urges America to, “wake up now!” “There is a global meltdown coming. It is global depression. And one world currency and one world financial system is the endgame.” Glenn Beck Says, “China said last week they want one global currency. France said yesterday … they want one world order – a new world order at the end of this event. Read more

Black Friday? Stock Markets Brace For The Worse

There wasn’t much new in U.S. markets Thursday, and that was the problem. Credit markets remain mostly frozen, as wary banks still refuse to lend to one another despite the federal government’s attempts to break that logjam.

The plan for the Treasury to buy up $700 billion in bad loans from banks now is roundly viewed as too little, too late, or just wrong-headed. Critics say it won’t get the banks to lend again any time soon.

New reports from Washington on Thursday said the Treasury may try another approach: injecting capital directly into banks. Yet that revelation also failed to lift market sentiment.

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Gold and Silver Dealers Report Unprecedented Shortage

A surge for demand in gold and silver has resulted in an unprecedented shortage of the metals for retail investors in recent days, according to Gold and Silver Investments, a Dublin-based firm that allows retail investors to speculate on movements in the value of precious metals.

Gold and Silver Investments director Mark O’Byrne said the supply of gold and silver available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies.

‘‘It’s absolutely unprecedented,” said O’Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market.

‘‘This did not happen even in the 1930s and the 1970s, and will result in markedly higher prices in the coming months.”

According to O’Byrne, gold and silver were now only easily accessible in the primary market, which consisted of central banks and other major traders of the precious metals.

However, he said that minimum transaction sizes in this market were out of reach for most retail investors – at approximately $350,000 for gold and $135,000 for silver.

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US On Brink of Financial Meltdown?

Last Thursday, the top economic policymakers in the United States told congressional leaders that the financial system was only days away from a catastrophic failure — and that the only hope was an immediate, massive government bailout. Congress agreed in principle, buoying financial markets. But five days later, the specifics of the rescue legislation remain undecided. Two of yesterday’s market events — a 372-point drop in the Dow Jones industrial average and a $16-per-barrel jump in the price of oil — show just how rapidly the clock is ticking.

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From The NY Times

It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

“When you listened to him describe it you gulped,” said Senator Charles E. Schumer, Democrat of New York.

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”

Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”

When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”

“What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”

Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.

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US Economic Turmoil – Dow Drops 500 Points

The US financial system is facing its worst periods since the Great Depression brought about by the failure of two of the worlds biggest investment banks and questions about the strength of a giant insurance company.

Lehman Brothers has filed for bankruptcy and Merrill Lynch is undergoing a forced sale to dodge the same bullet. It’s all part of the financial bleeding caused by the meltdown in the housing and credit markets in the United States which has seen the contagion spread far offshore.

The news led to sharp falls in share prices around the world. Washington Correspondent Kim Landers reports.

KIM LANDERS: Some are calling it “Meltdown Monday”. It’s a stunning reshaping of the Wall Street landscape with two of its largest firms falling or tottering, delivering the biggest test to the global economy in decades.

The 158 year old investment bank Lehman Brothers has filed for bankruptcy. A white knight buyer failed to appear when it became clear that the US Treasury wasn’t going to use Government money to clinch the deal.

Lehman falls under the weight of 60 billion dollars in soured real estate holdings. And the world’s biggest brokerage Merrill Lynch has been forced to accept Bank of America’s 50 billion dollar offer to snatch up the firm with the trademark “bull logo”.

Merrill had posted net losses of more than 17 billion dollars over the last four quarters and last week its stock plunged 27 per cent. Peter Morici is a Professor of Business at the University of Maryland.

He’s playing down ramifications of the upheaval.

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