Game over for the dollar and euro?

[3rdRock]

The central banks of China and Russia have signed a 3-year ruble-yuan currency swap deal up to $25 billion, in order to boost trade using national currencies and lessen dependence on the dollar and euro.

On Monday, China’s Central Bank announced the 150 billion yuan (815 billion ruble) currency swap between the Russian ruble and Chinese yuan. In terms of the Chinese currency that is $24.5 billion, and in Russian rubles, $20.1 billion.

http://rt.com/business/195556-russia-ch ... ency-swap/

[3rdRock]

Share prices across Europe tumbled on Thursday amid fears of a global economic slowdown and the impact of the Ebola crisis.

http://www.bbc.co.uk/news/business-29644214

Michael Hewson, chief market analyst at CMC Markets, said that one of the big concerns among investors was the ending of the Fed's monetary stimulus in the US.

"As the monetary morphine has started to wear off the patient has come to realise that a lot of the old problems still remain, and yesterday's poor US data helped trigger a rather extreme reaction in not only the stock markets but bond markets too, as complacent investors rushed to hedge themselves.

"In essence, investors are asking the question with respect to the recent recovery about whether this is as good as it gets, which rather explains the slump in the oil price, bond yields and stock markets," Mr Hewson said.

'Monetary Morphine' ............. I love it!

[UndercoverElephant]

And yet everything keeps bumbling onwards. They've avoided the fast monetary/economic crash, so instead we're stuck in a sort of economic no-man's-land. The system can't be fixed, but it can't be put out of its misery from inside either. So we just keep going.

[BritDownUnder]

The central banks of China and Russia have signed a 3-year ruble-yuan currency swap deal up to $25 billion, in order to boost trade using national currencies and lessen dependence on the dollar and euro.

On Monday, China’s Central Bank announced the 150 billion yuan (815 billion ruble) currency swap between the Russian ruble and Chinese yuan. In terms of the Chinese currency that is $24.5 billion, and in Russian rubles, $20.1 billion.

http://rt.com/business/195556-russia-ch ... ency-swap/

I can't help but thinking that if someone swapped $20bn of their currency for $24bn of another currency then someone got stiffed. These kind of things baffle me probably along with 99% of the population and I can't work out who wins out of this. Maybe they both are hoping the US loses.

[emordnilap]

Another nail

The central banks of China and Switzerland are planning to establish a yuan trading center in Zurich. The deal is expected to increase the number of European transactions in yuan.

[PS_RalphW]

EU to QE 60B Euro a month for nearly 2 years.

Oil market underwhelmed.

[emordnilap]

EU to QE 60B Euro a month for nearly 2 years.

Madness. Didn't work in the US, didn't work in the UK, simply more socialism for the extremely rich.

[UndercoverElephant]

BBC Headline: "Massive boost for Eurozone unveiled".

It's amazing. At what point did the economic rulebook get so completely re-written that printing money was viewed as a "boost"? I mean...if printing money really any sort of real solution to economic problems then why the hell hasn't it been used throughout the whole of the history of civilisation?

The answer, of course, is that the reason it wasn't used in the past was because people feared that it would lead to an inflationary spiral. Which just leads to the rather obvious question: "how can it be possible to print vast amounts of fiat currency without inflation getting out of control?" And the answer is this: the QE money isn't ending up in circulation, or at least most of it isn't. It is ending up in the bank accounts of people who are already rich, and there it either stays or is used to inflate the nominal value of assets like shares and property.

[emordnilap]

BBC Headline: "Massive boost for Eurozone unveiled".

It's amazing. At what point did the economic rulebook get so completely re-written that printing money was viewed as a "boost"? I mean...if printing money really any sort of real solution to economic problems then why the hell hasn't it been used throughout the whole of the history of civilisation?

The answer, of course, is that the reason it wasn't used in the past was because people feared that it would lead to an inflationary spiral. Which just leads to the rather obvious question: "how can it be possible to print vast amounts of fiat currency without inflation getting out of control?" And the answer is this: the QE money isn't ending up in circulation, or at least most of it isn't. It is ending up in the bank accounts of people who are already rich, and there it either stays or is used to inflate the nominal value of assets like shares and property.

Exactly.

Prior to WWII, printing money was used during wars - and those were the only times inflation occurred. Deflation, back to normal levels, then took place once the war was over as excess money was taxed out and destroyed.

Call it a simpleton's policy, but injecting money into a state for a reason - to have a war, build a bridge, dam a river, whatever - is sensible, (well, not the war, obviously) so long as it's taxed back out again.

[kenneal - lagger]

Printing money for capital projects is not generally inflationary and long as it is done within reason and the profits from the capital project are eventually taxed back out of the system at some point it is not. It was done for years before the *ankers got in on the act and decided that government should borrow money that they had printed so that they should profit. Thieving bastards!!

[biffvernon]

[

Madness. Didn't work in the US.

They spent their free money of the fracking industry.... oil price crash...
What will the Euro-zone spend theirs on?

[kenneal - lagger]

What will the Euro-zone spend theirs on?

On creating bubbles in the property and stock markets and on derivatives like most *ankers have done!