BACKDOC: OF COURSE INFLATION WILL BE REDUCED WITH INCREASED PURCHASING POWER WHEN THEY LAUNCH! DOC IMO
Thunderhawk: We go up they go down. How do you like that?
GO RV GO IRAN
Inflation rate down to 12.6 pc: CBI
IRNA – Central Bank of Iran (CBI) announced that inflation rate fell to 12.6 percent in Bahman (January 21 – February 19).
The inflation rate had been 13.2 percent in month of Dey (December 22 – January 20), the CBI reported.
BACKDOC: IT LOOKS LIKE THEY PLAN ON HAVING EXCELLENT SECURITY AND WANT TO SHOW THE WORLD HOW INCLUSIVE THEY WANT TO BE! WOW! DOC IMO
Iran to replace London as venue of IPC conference
The National Iranian Oil Company (NIOC) announced that it is considering replacement of London as the venue of the seminar on Iran Petroleum Contract.
Ali Kardar, Deputy for Investment and Financing of NIOC stressed that the seminar has not been cancelled but no decision has yet been made about the next venue in Europe or in Asia.
Earlier Kardar had said that since the British Embassy did not visa services it created problems for a number of people and delay introduction of a new model for Iran oil contracts.
The second IPC seminar was due to be held in London February 22-24.
In the contracts known as IPC it is expected that different cycles of the oil industry (exploration, development and production) be transferred in an integrated form in order to encourage foreign companies to be present in the Iranian oil industry.
In these contracts the ownership of the tanks is not transferable and attraction of investment, transfer of technology, protection of the tanks, increase in the recovery coefficient, and optimum use of the capacity of domestic contractors are among the main targets of the new oil contracts.
The new model of oil and gas contracts aims to lure back international oil companies, offering more flexible terms on price fluctuations and investment risks to make the sector financially attractive to foreign investors.
The Iran Petroleum Contract puts an end to a two-decade old buyback system that prevented foreign companies from booking reserves or taking equity stakes in Iranian companies. Under some circumstances, the new model allows reserves to be booked, but foreign companies would still not own oilfields.
The National Iranian Oil Company will have exclusive ownership rights over resources.
“We do not claim that this is an ideal and flawless scheme but it can address the needs of both National Iranian Oil Company and international oil companies,” said Bijan Namdar Zangeneh, Iran’s oil minister.
BACKDOC: LIKE I'VE SAID VIETNAM WILL BENEFIT FROM BOTH THE SILK ROAD AND THE EMPIRE COUNTRIES!
IRAQ IRAN AND KUWAIT WILL HAVE THEIR HANDS FULL AS WELL! WOW! DOC IMO
Thunderhawk: EEU-Vietnam Free Trade Deal to Boost Investments – Russian Prime Minister
The introduction of the free trade zone between the Russia-led Eurasian Economic Union (EEU) and Vietnam is expected to help develop investment cooperation between Moscow and the Asia-Pacific region, Russian Prime Minister Dmitry Medvedev said Wednesday.
Vietnam became the first country to sign a free trade agreement with the EEU in May 2015.
"We expect that the removal of barriers will expand investment cooperation between Russia and the Asia-Pacific region and, above all, Vietnam," Medvedev said.
The EEU, comprising Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan, is an international organization that encourages regional economic integration through the free movements of goods, services, and people within the union.
More than 40 countries and international organizations, including China, Indonesia, Israel and Iran have expressed interest in creating a free trade area with the bloc.
http://nvs24.com/news/world/EEU-Vietnam ... 36721.html
BACKDOC: AS WE NOW KNOW DISCUSSIONS ARE GOOD BUT THE RATES OF COUNTRIES CURRENCIES WILL ULTIMATELY BE DETERMINED BY THE 50 DECISION MAKERS AS WE SHARED LAST NIGHT!
THE BIS WILL DIRECT THE IMF TO IMPLEMENT THOSE CHANGES!
THE NEW ASSET BACKED WORLD WILL BE MUCH EASIER TO CONTROL FOR ALL COUNTRIES VALUES SINCE THERE WILL ONLY BE ONE SOURCE OF MONEY CREATION, THE SDR IN THE IMF!
Walkingstick: Why a Global Currency Accord Won’t Happen
Intervention is manipulation, so U.S. will push EU and Japan toward fiscal stimulus and China to continue its economic overhaul
Updated Feb. 24, 2016 12:34 p.m. ET
Can the world have a currency agreement without any currency tools?
Back in 1985, a surging dollar was driving up the U.S. trade deficit and fueling protectionism. In response, officials of the world’s five big economies gathered at New York’s Plaza Hotel that September and agreed to it push the dollar down through coordinated market intervention.
Circumstances today aren’t so different. Central banks in the eurozone, Japan and China have turned to easier monetary policy and lower currencies to stimulate growth. With the Federal Reserve raising interest rates, the dollar has, until recently, surged, curbing U.S. exports and growth. Those divergent policies have fueled market turmoil and calls that economic officials from the Group of 20 strike a new Plaza accord at their meeting in Shanghai this week.
But if currency misalignment is similar to 1985, the tools for dealing with it are not. In 2013, the top economic powers effectively declared that currency intervention is manipulation. Central banks insist, none more loudly than the Fed, that they do the world the most good when they focus only on their own economies.
That means when U.S. Treasury Secretary Jack Lew goes to Shanghai this week, he can’t ask for a Plaza-style currency accord. Instead, he will try to extract stronger commitments from other governments to stimulate growth through other channels, taking the pressure off monetary policy and exchange rates.
“The conversation we have to have is…how do you have exchange rates naturally equilibrate because you have growth in more parts of the world?” Mr. Lew said in an interview this week. “If we could get to a place where there were sustained expectations of growth on a healthy level in the major economies around the world, that’s what would actually lead to a natural balance in exchange rates.”
There’s no secret to what the U.S. thinks would bring that about: more-stimulative (or less-restrictive) fiscal policy in Europe, in particular Germany, and Japan, and a transition in the engine of Chinese growth from exports and investment to consumers.
Mr. Lew may win verbal support for these demands from his colleagues in Shanghai. That would itself be a victory. The question then would be whether policies actually change. Germany is still committed to a balanced budget and Japan’s huge debt deters any thought of boosting spending or cutting taxes. Even if they did embrace fiscal stimulus, it’s doubtful it would be big enough to change the relative path of interest rates and thus currencies.
The one country whose reaction might matter is the meeting’s host, China, the source of much of financial markets’ anxiety. The People’s Bank of China surprised the world by devaluing the yuan against the dollar last August and again in January. Many outsiders suspected its motivation was to boost exports and growth at its trading partners’ expense, and some Chinese officials concur.
The PBOC itself insisted it was making the yuan more responsive to market forces. Because the PBOC had been lowering interest rates as the Fed prepared to tighten, those forces pointed down.
After numerous chats with his Chinese counterparts since August, Mr. Lew seems satisfied with the PBOC’s explanation, though it was poorly communicated. The upshot is that so long as China is actually overhauling its growth model, the U.S. will take any cross-currents that buffet the yuan in stride.
But a steep depreciation, which is what some analysts believe China needs to cope with capital outflows and the threat of deflation, is something else entirely.
“I do not see the basis for that kind of move,” Mr. Lew said, noting that PBOC governor Zhou Xiaochuan recently said the same. China has plenty of reserves, its economy has not slowed appreciably, and a stronger yuan “gives consumers more purchasing power. A depreciating [yuan] has the opposite effect,” Mr. Lew said.
If China seems to be devaluing purely to pursue competitive advantage, the U.S. will “make it clear that has to change,” Mr. Lew said.
Politically, President Barack Obama could not let such a devaluation go unchallenged. It would fuel protectionism in Congress and doom his signature trade initiative, the signed but unratified 12-nation Trans-Pacific Partnership, though China isn’t a signatory. Donald Trump has become the front-runner to be the Republican presidential nominee in part by accusing China of “stealing from us” and threatening to hit it with steep tariffs.
Yet whether China can resist such a devaluation depends not just on its own actions. Much of the downward pressure on the yuan, euro and yen can be traced to the Fed’s preparation to raise rates last December. As doubts about further rate hikes have mounted this year, the dollar stopped rising.
Ultimately, the person with the greatest say over where currencies go is Fed Chairwoman Janet Yellen. Her decision won’t depend on the opinions of her foreign counterparts in Shanghai, but her American colleagues in Washington.
http://www.wsj.com/articles/why-a-globa ... 1456335109
BACKDOC: WOW! POWERFUL ARTICLE BROTHER!
WILL CHINA'S SOFT PEG BE ENOUGH TO KEEP IT FROM DEVALUATION PRESSURE?
WELL, THEIR ARE SERIOUS DEBT ISSUES THERE FOR SURE BUT IF WE GET A "SAUDI FLIP FLOP" WE COULD SEE A SERIOUS POSITIVE TURN OF EVENTS FOR THE SADI RIAL! MMMMM
Walkingstick: When Currency Pegs Break, Global Dominoes Fall
Feb. 24, 2016 1:01 AM ET
When a currency peg breaks, it unleashes shock waves of uncertainty and repricing that hit the global financial system like a tsunami.
The U.S. dollar has risen by more than 35% against other major trading currencies since mid-2014:
If all currencies floated freely on the global foreign exchange (FX) market, this dramatic rise would have easily predictable consequences: everything other nations import that is priced in dollars (USD) costs 35% more, and everything the U.S. imports from other major trading nations costs 35% less.
But some currencies don't float freely on the global FX markets: they're pegged to the U.S. dollar by their central governments. When a currency is pegged, its value is arbitrarily set by the issuing government/central bank.
For example, in the mid-1990s, the government/central bank of Thailand pegged the Thai currency (the baht) to the USD at the rate of 25 baht to the dollar.
Pegs can be adjusted up or down, depending on a variety of forces. But the main point is the market is only an indirect influence on the peg, not the direct price discovery mechanism as it is with free-floating currencies.
If central states/banks feel their currency is becoming too strong via a vis the USD, they can adjust the peg accordingly.
Why do states peg their currency to the U.S. dollar? There are several potential reasons, but the primary one is to piggyback on the stability of the dollar without having to convince the market independently of one's stability.
Another reason to peg one's currency to the USD is to keep your currency weaker than the market might allow. This weakness helps make your exports to the U.S. cheap/ competitive with other nations that have weak currencies.
Nations defend their peg by selling dollars and buying their own currency. The way to understand this is supply and demand: if nobody wants the currency, the demand is low and the price falls. If there is strong demand for a currency, it rises in purchasing power if the supply is limited.
By selling USD and buying their own currency, nations put downward pressure on the dollar and put a floor under their own currency.
The problem is you need a big stash of dollars to sell when you want to defend your peg. If you run out of dollars (usually held in U.S. Treasury bonds), you can't defend your peg, and the peg breaks.
This is why China amassed a $4 trillion stash of U.S. Treasuries. Now that the USD has soared, China's yuan (RMB) has also soared against other currencies because it's pegged to the USD. This has made Chinese goods more expensive in other currencies.
Currently, the government/central bank of China is attempting to adjust its currency peg to weaken the yuan vis a vis the dollar. To avoid showing signs of losing control, the country is attempting to defend the yuan against a break in the peg, and it has burned over $700 billion of its stash of USD in the past few months defending the yuan peg.
Here is a chart of the yuan in USD. Note that China moved the peg from 8.3 to 6.8 to the dollar to strengthen the yuan when the U.S. complained that it was undervalued. The yuan rose to 6 to 1 USD in early 2014, and has since started to weaken as the dollar has soared.
When a currency peg breaks, it unleashes shock waves of uncertainty and repricing that hit the global financial system like a tsunami. When Thailand's 25-to-1 peg to the USD broke in 1997, it triggered the Asian Contagion that nearly pushed the world economy into recession.
Now that China's peg to the dollar is under assault, what happens to the global economy when a weakening China finds it can't stop a rapid devaluation of its currency?
http://seekingalpha.com/article/3922956 ... all?page=2