Archive for March, 2009

27
Mar
09

Southpark on bailouts

funny stuff

27
Mar
09

obama on univision

obama continues to campaign to all those living in estados unidos.

26
Mar
09

lebron’s 60 minutes trailer

great shot!

25
Mar
09

britain’s PM gordon brown slammed by his parliament

24
Mar
09

great horsey cartoon

horsey_323

http://www.seattlepi.com/horsey/viewbydate.asp?ID=1920

23
Mar
09

this drum keeps getting louder…

China calls for new reserve currency to replace dollar

By Jamil Anderlini in Beijing

Published: March 23 2009 12:16 | Last updated: March 23 2009 14:22

China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

The goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies,” Zhou Xiaochuan, governor of the People’s Bank of China, said in an essay posted in Chinese and English on the central bank’s website.

Although Mr Zhou did not mention the US dollar, the essay gave a pointed critique of the current dollar-dominated monetary system.

“The outbreak of the [current] crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system,” Mr Zhou wrote.

Analysts said the proposal was a clear indication of Beijing’s fears that actions being taken to save the domestic US economy would have a negative impact on China.

“This is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money,” said Qu Hongbin, chief China economist for HSBC.

For now, China has little choice but to hold the bulk of its $2,000bn of foreign exchange reserves in US dollars and this is unlikely to change in the near future.

To replace the current system, Mr Zhou suggested expanding the role of Special Drawing Rights, which were introduced by the IMF in 1969 to support the Bretton Woods fixed exchange rate regime but became less relevant once that system collapsed in the 1970s.

Today, the value of SDRs is based on a basket of four currencies – US$, Yen, Euro and Pound Sterling – and they are used largely as a unit of account by the IMF and some other international organizations.

“The US dollar is still the most important currency for settling international trade, pricing and payment in the current international monetary system,” Hu Xiaolian, director of the State Administration of Foreign Exchange, which manages the country’s foreign exchange reserves, said at a press conference earlier in the day. “Investing in US Treasury bonds is an important element in China’s forex reserve investment and we will continue this practice.”

China’s proposal would expand the basket of currencies forming the basis of SDR valuation to all major economies and set up a settlement system between SDRs and other currencies so they could be widely used in international trade and financial transactions.

Countries would entrust a portion of their SDR reserves to the IMF to manage collectively on their behalf and SDRs would gradually replace existing reserve currencies.

Mr Zhou said the proposal would require “extraordinary political vision and courage” and explicitly acknowledged a debt to the theories of John Maynard Keynes, who made a similar suggestion in the 1940s.

More recently, US economist and Nobel prize winner Joseph Stiglitz, who is visiting China this week, has suggested expanding the role of SDRs to lay the foundation for the creation of a world currency.

In the short term, China expects the IMF to “at least recognize and face up to the risks resulting from the existing system, conduct regular monitoring and assessment and issue timely early warnings,” Mr Zhou’s essay said.

22
Mar
09

allonzo trier

just read about this kid in nytimes magazine…he’s like the lil wayne version of a child phenom…

21
Mar
09

matt taibbi rips into aig and the fiasco that is american banking

excerpt: The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That’s $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG’s 2008 losses).

excerpt 2:

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.

http://www.rollingstone.com/politics/story/26793903/the_big_takeover

20
Mar
09

best/funniest dunk EVER!

thanks for sharing kurt!

19
Mar
09

oil finally rallying…

excerpt from article:

NEW YORK (AP) — Oil prices hit news highs for the year Thursday after a decision by the Federal Reserve to spend billions snapping up U.S. bonds sent the dollar tumbling.

Oil is priced in dollars and when the U.S. currency weakens, it essentially makes crude cheaper.

finally….our inflationary monetary policy is pushing my USO oil etf investment back into the black.

here’s my original post about oil back in january

http://culturalcapitalism.com/2009/01/06/im-betting-on-oil-in-2009/




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