George Bush should heed Asia's central bankers by Chris Giles
Remember these names. Toshihiko Fukui. Zhou Xiaochuan. Perng Fai-Nan. Park Seung. Joseph
Yam. And Yaga Venugopal Reddy. They are the central bank governors of Japan, China, Taiwan, South Korea, Hong Kong and India
respectively. They are also arguably more important for US monetary policy than Alan Greenspan, the Federal Reserve chairman,
or his successor who will take on the role next year.
Think Again: Alan Greenspan by Stephen S. Roach
U.S. Federal Reserve Board Chairman Alan Greenspan is credited with simultaneously achieving
record-low inflation, spawning the largest economic boom in U.S. history, and saving the world from financial collapse. But,
when Greenspan steps down next year, he will leave behind a record foreign deficit and a generation of Americans with little
savings and mountains of debt. Has the world’s most revered central banker unwittingly set up the global economy for disaster?
Daily Forex Commentary by Jack Crooks
These "scraps of news" are then perpetuated and given weight by a crowd of so-called traders
who chat with each other all day long - each proving their point because they have a Holy Grail technical analysis package
on their desk top to pinpoint, you guessed it, cause and effect. And gee, "the story came from a 'reputable' news organization,
so it has to be true'. And look, prices are surging, it must be true”. And on and on it goes.
This is a crowd that is ripe for manipulation!
Reserve diversification fears hit dollar by Lisa Twaronite
South Korean officials have indicated for more than a year that the nation's central bank
would mull ways of reducing the proportion of U.S. Treasurys in its reserves. On Wednesday, the bank said that it won't sell
existing dollar assets to diversify but will buy bonds in other currencies with new funds.
Dollar Declines as Bank of Korea Plans to Diversify Reserves
The dollar fell the most in more than four months against the yen and dropped versus the euro, Korean
won and the Canadian and Australian currencies after the Bank of Korea said it plans to diversify its reserves.
Dollar sinks to 22-year low versus kiwi by Jennifer Hughes
The kiwi also rose to a seven-year high against the yen at Y76.82 suggesting that a lot
of the buying was related to carry trades where investors borrow in low-yielding currencies such as the yen or, to some extent,
the dollar.
Demising US dollar gives way to euro cash in Russia
The dollar's behavior against the ruble makes a lot of Russian people turn to the euro.
The Central Bank has recently published the statistics of last-year currency operations. As one can see from the information,
authorized banks sold the euro cash in the sum of $1 billion 105.54 million to Russian natural persons in December of 2004.
It became the all-time high record of euro sales since the introduction of the euro cash in 2002. On the one hand, December
is a month that precedes the long period of New Year holidays. Wealthy Russians prefer to spend them somewhere in Europe having
quite an amount of the euro cash in their pockets. On the other hand, there are not many such people in Russia, who can afford
spending their holidays abroad. They could not spend such a huge amount of money on holiday tours. For the time being it is
not clear if the increased demand on euros was only a seasonal factor, or one could already view it as a change of Russian
people's traditional fondness to the US dollar.
How US suffers when the dollar falls by David R. Francis
When the euro began circulating at the start of 2002, Kenneth Rogoff figured it would take 50 years
for the new 12-nation currency to rival the importance of the United States dollar in world financial markets. Today, the
former chief economist of the International Monetary Fund says parity could come in five to 10 years.
Is the Dollar on the Verge of Another Breakdown? by Clif Droke
This is the question being asked in the financial community. At odds are the dollar bears,
who see an imminent resumption of the decline in the U.S. dollar index followed by lower lows. On the other side of the fence
are the bulls, who see near-term strength in the dollar and a much-needed recovery rally lasting longer than the mere six
weeks it lasted from late December until early February.
It's Not a Good Time for New Greenspan MacGuffin by Caroline Baum
It's not uncommon for a MacGuffin to debut at the semi-annual monetary policy testimony,
previously known as the Humphrey-Hawkins testimony. Just think about it: Greenspan has a captive audience, and he holds all
the cards. What better time to spring a surprise?
Radical Changes In Savings, Death Tax by PAUL KATZEFF
President Bush's proposed federal budget has as many proposals to change personal finance
programs as batting practice has home runs.
But three ideas stand out. They would impact the most people, and that impact would be
big:
• Elimination of the estate tax.
• Creation of retirement savings accounts (RSAs).
• Creation of lifetime savings accounts (LSAs).
Thrift and the trade deficit by Gary North
Basically, the trade deficit is a product of Americans who are looking for bargains and
foreigners who are looking to buy assets owned by Americans: bargains. Americans buy consumer goods. Foreigners buy producer
goods and debt instruments. For this arrangement to change, it would take a transformation of thinking on both sides: by foreigners,
who would decide to invest less money here, and Americans, who would decide to invest abroad or in the U.S., thereby raising
the price of American capital assets. Americans would outbid foreign investors.
The times are out of whack by Richard Russell
The latest count from Investor's Intelligence shows bulls at 54.4% and bears
at 25.3%. Those are hardly gloomy statistics (the problem, of course, is that we read these statistics on a contrary opinion
basis).
Nevertheless, I get this feeling that almost everything is up and "over the top." The nation's wild optimism
is almost exhausted. Suddenly, reality is starting to slap America's consumers in the face. "Hey, wake up Buddy, there's a
crack in the punch bowl and the juice is running out."
Greenspan Not Really Optimistic on Account Gap by John M. Berry
Perhaps the Fed chairman was wary about triggering another sell-off of the dollar similar
to that which followed his speech last November. His statements then were interpreted by some market participants as an effort
to talk down the dollar to aid in reducing the current account deficit.
THE G-7 EFFECT: Selling into Dollar-Strength by Alex Wallenwein
The financial press sees the 2005 London G-7 statement essentially as a non-event and
reports "no change"in China's Yuan policy. All of this is widely seen as "dollar-supportive."
Nothing could be further from the truth.
Deflation is On Its Way! by Jay Taylor
Most people believe Ben Bernanke, who said that with today's ability to create digital money and
to throw money from helicopters, the Fed will always be able to generate inflation. Most people, especially my fellow gold
bugs, have a hard time not believing Bernanke's promise that deflation can always be overcome by printing more money. Please
note that Bernanke is now heading up the Council of Economic Advisors to President Bush and he may also be positioning himself
to succeed Alan Greenspan as Chairman at the Fed. If ever there will be a test of the notion that deflation can always be
inflated away, it looks like we will get it in spades!
IMF looks at gold sale options for debt relief by Andrew Balls, Chris Giles and Scheherazade Daneshkhu
The International Monetary Fund is preparing a report on the potential sale of a portion of its gold
reserves in a move that would help fund debt relief for poor countries but could unsettle the markets by threatening a drop
in the price of gold.
Forget the Euro. 2005 Is the Year of the Yen by William Pesek Jr.
The U.S. Treasury has yet to scrap its strong-dollar policy; it doesn't want to trigger
a crash or appear to pursue a beggar- thy-neighbor policy. Yet here in Asia, Treasury Secretary John Snow's campaign to force
countries to let their currencies trade freely is often seen as a veiled attempt to devalue the dollar.
Blame America by Michael Freeman
American leadership was also found lacking in a slew of economic and political issues.
The shrinking dollar, a source of great difficulty for European and Canadian businesses, is the result of a vanishingly-low
U.S. personal-savings rate, as well as the government's seeming inability to reduce the enormous federal budget.
Gates, Buffett and China Gang Up on Dollar by William Pesek Jr.
Until now, the U.S. has been able to dazzle currency traders with its deficits-don't-matter
poker face. Yet it's clearly losing its ability to keep investors -- and central banks -- in check. Once central banks here
in Asia turn on the dollar, the U.S. is in for some very turbulent times as bond yields surge.
More Difficult Task in Greenspan's Final Year
From 1983 through 1994, there were an average of eight dissents a year on policy votes,
according to a study by Daniel Thornton of the St. Louis Fed bank. There have been only six in the last five years, and Governor
Edward Gramlich is the only one of those dissenters who still has a vote on the committee.
