Get ready for more USD depreciation: Japan/China unload BILLIONS in USD investments

[$5 submissions]

http://www.telegraph.co.uk/money/mai...cnchina116.xml

Asian investors dumped $52bn worth of US Treasury bonds alone, led by Japan ($23bn), China ($14.2bn) and Taiwan ($5bn). It is the first time since 1998 that foreigners have, on balance, sold Treasuries.

Mr Ostwald warned that US bond yields could start to rise again unless the outflows reverse quickly. "Woe betide US Treasuries if inflation does not remain benign," he said.

The release comes a day after the IMF warned that the dollar was still overvalued and likely to face "some depreciation in the medium term".

My comment: Oh sheesh.... Any mainstream sponsors pay in EURO or GBP?

[Tempest]

It was only a matter of time... but hey.. at least they cut everyones taxes right?? Wouldn't want to balance the budget or anything like that.

[Big_Red]

Gold.....

[FredIsMe]

Originally Posted by Big_Red

Gold.....

Yet another stupid symbol of wealth.

Platinum is rarer than gold yet gold is worth more.

How is ink on paper worth anything? How is shiny yellow rock worth anything?

[Big_Red]

Originally Posted by FredIsMe

Yet another stupid symbol of wealth.

Platinum is rarer than gold yet gold is worth more.

How is ink on paper worth anything? How is shiny yellow rock worth anything?

isnt it precious.

[Big_Red]

Originally Posted by FredIsMe

Yet another stupid symbol of wealth.

Platinum is rarer than gold yet gold is worth more.

How is ink on paper worth anything? How is shiny yellow rock worth anything?

btw those wealthy people got rich, using gold. not just owning it. gold is only a stopping spot on the road to riches. if you know how to use it, it can help you tremendously when times are volitile.

[L-Pink]

All my money is in wicker and card-board futures

[GrouchyAdmin]

Originally Posted by FredIsMe

Yet another stupid symbol of wealth.

Platinum is rarer than gold yet gold is worth more.

How is ink on paper worth anything? How is shiny yellow rock worth anything?

Ron Paul supporters love to spout idiotic, if not outright ignorant catchphrases. There's not enough gold in the world to amass the US's worth alone.

Think of them like 4chan, but politically. (However there is no direct link between Ron Paul and pedophilia.. so he's got that working for him.)

[$5 submissions]

Originally Posted by FredIsMe

Yet another stupid symbol of wealth.

Platinum is rarer than gold yet gold is worth more.

How is ink on paper worth anything? How is shiny yellow rock worth anything?

A lot of the time, scarcity is not the only determinant of value. You have to consider the other side of the equation as well--demand. Sure, platinum may be rarer but gold is demanded not only as an investment but as an industrial input as well. This multiple demand sources, along with cultural reasons, might explain why it's worth more than platinum.

[ryph]

youre forgetting what gold truly is.
it isnt some shiny metal or commodity to be used in compuyer chips and teeth plating. gold, based on thousands of years of precedent, is money. true real, no obligation to any1 else, money.
theres a reason central banks horde tons of the stuff.

[VeriSexy]

weaker dollar yay

[WiredGuy]

Any sponsors paying in precious metals?
WG

[Drake]

Wow that's rough

[halfpint]

I think China is kinda pissed off with the USA at the moment over this Dalai Lama thing maybe its revenge time

[WarChild]

Since when is Gold worth more than Platnium? You guys are silly.

PLATINUM 10/17/2007 1435.00
GOLD 10/17/2007 757.00

http://www.kitco.com/market/

[Nismo]

Is this the reason why every chinese stock has been climbing?

[GreyWolf]

Originally Posted by halfpint

I think China is kinda pissed off with the USA at the moment over this Dalai Lama thing maybe its revenge time

Fussing over the Dalai Lama is kinda trivial in comparison to the economy aspect

What would you do if you were sitting on an "asset" which, by all forecasts/appearances, is going to depreciate further over the next few years? Offload as much as is prudent and cut your losses.

This is nothing new and was on the table for a few years now and only a matter of time still it started, but - still serious shit and likely to get more serious.

[halfpint]

Originally Posted by GreyWolf

Fussing over the Dalai Lama is kinda trivial in comparison to the economy aspect

What would you do if you were sitting on an "asset" which, by all forecasts/appearances, is going to depreciate further over the next few years? Offload as much as is prudent and cut your losses.

This is nothing new and was on the table for a few years now and only a matter of time still it started, but - still serious shit and likely to get more serious.

Yep I would sell the lot off as quick as possible, so where does this all lead to if the $ loses more value that makes imports more expensive and exports dont make as much as before, so how does the USA reverse the falling $ trend.this is really bad for the USA and a lot of other countries.

[gecko]

O snap..

[Porno Dan]

This is going to destory the US housing market, as we will be forced to raise interest yields on t bills in an effort to encourage foreign investment.

[GreyWolf]

Originally Posted by halfpint

Yep I would sell the lot off as quick as possible, so where does this all lead to if the $ loses more value that makes imports more expensive and exports dont make as much as before, so how does the USA reverse the falling $ trend.this is really bad for the USA and a lot of other countries.

And that is the challenge - first to stop the downwards spiral and then hopefully start an upwards trend. It's an enormous task and can't just rely on govt policies alone - tho whatever govt ends up managing the US for the next, probably at least 10 years, seriously needs to devote time to the economy.

Right now, it's probably damage-limitation time and likely to continue next year. Reversal of economic downturns are not going to happen overnight and there probably has to be actual evidence of postive action to give investors, both domestic and international, confidence to inject funds.

Only my , but smell the withdrawal of investment started a good few years ago... and has been slowly increasing. The "bankers" (hedge funds blah) who traditionally have been injecting short-term funding are slowly closing their doors - and can only see that increasing - bad news.

OK.. the home market is crappy, but likely to get worse and that has it's own ripple effect. But... more ripples can come from other countries - eg.. smell the overpriced UK home market is going to take a hit next - and the UK was a traditionally high investor in US markets - so can see a ripple from there. It's a vicious cycle and going to be seriously hard to stop.

I can't say what a possible solution may be - tho in simplied terms, it would probably involve substantially cutting imports and at least attempting to cut the level of oil imports (this has a massive deficit effect on the trading accout). Outsourcing may be fine, but passes out "wealth creation" to other countries - US industry "needs" to produce marketable product for export (as well as fufilling a home market). This is a long story - and will probably last many years to recover (if that is possible) what was the recent status of the dollar.

[spunkmaster]

Originally Posted by Tempest

It was only a matter of time... but hey.. at least they cut everyones taxes right?? Wouldn't want to balance the budget or anything like that.

Because of the Dollars drop in the last year the deficit has dropped 30% !

The lower the Dollar the better it is for the US exports and deficit.

The only time a low dollar isn't good is if inflation is high and right now inflation is low.

[halfpint]

Originally Posted by GreyWolf

OK.. the home market is crappy, but likely to get worse and that has it's own ripple effect. But... more ripples can come from other countries - eg.. smell the overpriced UK home market is going to take a hit next - and the UK was a traditionally high investor in US markets - so can see a ripple from there. It's a vicious cycle and going to be seriously hard to stop.

We are all ready seeing the housing market over here slow down and we also have record numbers of people having their houses repossessed, so the rippling effect is allready being felt over here.

[GreyWolf]

Originally Posted by spunkmaster

Because of the Dollars drop in the last year the deficit has dropped 30% !

The lower the Dollar the better it is for the US exports and deficit.

The only time a low dollar isn't good is if inflation is high and right now inflation is low.

You saying there is now a drop in debt of 30%???

Sure, in theory a low dollar should help exports, and it has done to a degree, but so little in comparison with the level of imports. Also, since there are far more imports than exports - it sure does not help the trading deficit where more dollars are needed to pay for imported product.

[GreyWolf]

Originally Posted by halfpint

We are all ready seeing the housing market over here slow down and we also have record numbers of people having their houses repossessed, so the rippling effect is allready being felt over here.

Yep.. can see it's not good news there halfpint and banks/mortgages companies have been playing the sub-prime market.

Always thought there are three countries with "hyped" properties which are going to be possible problem areas - and in this order: USA, UK and Canada.

US we know about and the UK is showing signs - Canada is a long way behind and having a reasonable economic outlook so maybe not a future problem.



PS Got the "aura" of problems ahead in the UK market last year and sold a house there - but, was maybe a few months too early in selling - it could have increased a bit more in value But hell - it was a very good run and that property increased many times in value - so can't moan.

[RawAlex]

The real issue is that the US could end up in a position of having to pay much higher interest rates on bonds to get these countries and large institutional investors in the game, which will lead to increased deficits, etc.

It will also make it somewhat harder to keep lowering interest rates to keep the housing market from collapsing.

My feeling is that the h8trs of the US in the world, the oil producing nations, the muslim fundamentalists, and similar are encouraging this no end. Every day that oil is expensive and the US is weakened in another day that the balance of power tips.

Forget about Europe having to learn German. You all might want to start brushing up reading from right to left.

[GreyWolf]

Originally Posted by RawAlex

The real issue is that the US could end up in a position of having to pay much higher interest rates on bonds to get these countries and large institutional investors in the game, which will lead to increased deficits, etc.

It will also make it somewhat harder to keep lowering interest rates to keep the housing market from collapsing.

My feeling is that the h8trs of the US in the world, the oil producing nations, the muslim fundamentalists, and similar are encouraging this no end. Every day that oil is expensive and the US is weakened in another day that the balance of power tips.

Forget about Europe having to learn German. You all might want to start brushing up reading from right to left.

Will throw some thoughts RA - Suspect the main underlying problem is a lack of performance in US markets over the last ... five years or so. Investment confidence normally is based on potentially good results or actual results. Short term bursts or downturns don't matter too much, but if the results are consistantly poor over a number of years - investment is going the slow.

If you look at US markets over .. eg the last five years, - they have been lower than any other western industrialized country - averaging just under 3.5% per annum. It's only my , but think this stems from actual performance (why there is a lack of performance - hell knows), - but to throw in higher interest may not be the solution and more like throwing the profits down the drain. Really suspect the issue of performance needs to be addressed and resolved. (There are probably plenty areas which can be the cause of this, but too many to throw into the pot here).

If and when the market does perform better - it's inevitable funding will be injected, but meantime, it's going to be hard to convince fund managers to throw clients money into the lowest markets in the western world. The market needs to take the initiative and start performing.

Oil and the Middle East - Don't believe OPEC have much to do with "muslim fundamentalists" or are particularly "anti". OPEC nations have a responsibility to manage their own assets for the benefit of their "shareholders" and have been taking substantial hits because of the reduced dollar value. (How this plays a role in increased oil prices - another story). It has got to be very tempting for OPEC to want to base their pricing on a currency other than peto-dollars and, so far, they have resisted. But, like China and Japan dumping dollars, there may come a time when OPEC seriously have to consider changing oil currency - especially if the dollar continues to slide. But... the effect of that would be so damaging - and possibly to a level that there would not be a recovery of the dollar in our lifetime and it sure would have a ripple effect around the globe.

Another angle on the oil issue is that the US consumes a disproprotionate volume of oil and this is has a serious effect on the US trade balance. Most of the product is not used for industry or "wealth creation" but, puffed from exhaust systems and forgotten about.

Totally agree on the effects of the Asian and Pacific rim economies - there is no doubt they are going to be the economic powerhouses of the planet - and probably to a level we have never seen before. This places a challenge on all western industrialized countries and it's obvious the economies of these countries need to be prepared to ride the challenge of upcoming economies. So far, tho this varies from one industrialized country to the other - it's clear a few nations are totally unprepared to meet this challenge and lack product to offer on the global marketplace.

[pr0]

invest in companies that make nickelbags & little coke bags & heroin stamp bags & the big alcohol stocks....& and condom companies

when the economy takes a shit...people are gonna be getting fucked up & fucking to forget the pain

[eroswebmaster]

I have a solution, let's just print more money.

[spunkmaster]

Originally Posted by GreyWolf

You saying there is now a drop in debt of 30%???

Sure, in theory a low dollar should help exports, and it has done to a degree, but so little in comparison with the level of imports. Also, since there are far more imports than exports - it sure does not help the trading deficit where more dollars are needed to pay for imported product.

Trade deficit has gone down 10% for the first time in many years.

US Manufacturing has increased in record numbers:

http://query.nytimes.com/gst/fullpag...C0A96E9482 60

[Tempest]

Originally Posted by spunkmaster

Because of the Dollars drop in the last year the deficit has dropped 30% !

The lower the Dollar the better it is for the US exports and deficit.

The only time a low dollar isn't good is if inflation is high and right now inflation is low.

The dollar started dropping the day Bush announced war with Iraq... Not just this last year.

You made me laugh though... Thanks... Can you let me know where you get such a big pair of rose colored glasses?

[GreyWolf]

Originally Posted by spunkmaster

Trade deficit has gone down 10% for the first time in many years.

US Manufacturing has increased in record numbers:

http://query.nytimes.com/gst/fullpag...C0A96E9482 60

In that case, what's the problem? Everything in the garden is obviously rosy

Do you realize how irrelevant (it's not really irrelevant, does matter and is some benefit) that $30 billion export increase actually is?? It's peanuts.

To try and put it in perspective - the Fed dumped almost $72 billion of fake money into the banking system in one week recently to retain solvency and liquidity. In less than week other nations have dumped more than $30billion in dollar assets. Each day the government borrows a further $30billion (give or take a few billion) from other nations - around 30% of that from the Central Bank of China alone.

Sure, it is correct that a weaker dollar is good for exports, but this is nowhere near the level which would indicate a stable or balanced economy. It's nice to see manufacturers patting each other on the back, but there are clearly not enough manufacturers. They have probably been exported to Asian countries.

Seriously - if that article was supposed to be reflection of a rosy economy and terminology like "record successes" - it failed. The evidence lies with the weak, and getting weaker, dollar.

[artman]

Originally Posted by FredIsMe

Yet another stupid symbol of wealth.

Platinum is rarer than gold yet gold is worth more.

How is ink on paper worth anything? How is shiny yellow rock worth anything?

hippys are gay

[Paul]

Originally Posted by GreyWolf

OK.. the home market is crappy, but likely to get worse and that has it's own ripple effect. But... more ripples can come from other countries - eg.. smell the overpriced UK home market is going to take a hit next - and the UK was a traditionally high investor in US markets - so can see a ripple from there. It's a vicious cycle and going to be seriously hard to stop.

The golden question is, how bad will it get?

The UK market is certainly starting to see the effects, I've been following the UK property market very closely because I'm about to buy a place.

In Northern Ireland property prices are down 8% from Jan 07 - June 07

The Bank of England have announced that loans will now be harder to get. Much higher interest rates.

Yesterday the IMF warns that UK house prices are at risk of falling.

The UK buy to let market is in trouble, rising costs (interest rates specifically) are lowering profits and in a lot of cases rent is no longer paying the mortages.

Most first time buyers in the UK completely priced off the market, average property prices costing anywhere from 5 - 10 times their yearly income.

Reposessions are up around 30% from last year, this will only get a lot worse once the next batch of fixed rate mortages end in 07 and these people see massive hikes in their interest rates.

Some analyists are predicting house prices may drop by 15% in 2008.

This all paints a rather gloom picture in my opinion. It also makes me wonder if I should wait and see what happens in the next few months before buying a place

[StuartD]

Originally Posted by eroswebmaster

I have a solution, let's just print more money.

Actually, that makes it worth even less

My concern is whether or not that was a one time more or only the start?

[Vendot]

Originally Posted by Coatsy

This all paints a rather gloom picture in my opinion. It also makes me wonder if I should wait and see what happens in the next few months before buying a place

Hmmmm I think you would be very smart to do that.... keep any money in a high interest account and wait.

[Snake Doctor]

Why can't I find anything about this from any other news source?

[V_RocKs]

I have to puke.

[$5 submissions]

Originally Posted by eroswebmaster

I have a solution, let's just print more money.

I get your joke That's exactly what the Fed's been doing and the M3 money supply keeps swelling further driving down the value of the dollar and increasing treasury bond yields. If INFLATION rears its head (corn/grains prices and oil prices, HELLO!) the party might head towards meltdown.

[JFK]

Originally Posted by WarChild

Since when is Gold worth more than Platnium? You guys are silly.

PLATINUM 10/17/2007 1435.00
GOLD 10/17/2007 757.00

http://www.kitco.com/market/

THANKS, reading the post above, I was going to reply with the same thing

[GreyWolf]

Originally Posted by Coatsy

The golden question is, how bad will it get?

The UK market is certainly starting to see the effects, I've been following the UK property market very closely because I'm about to buy a place.

In Northern Ireland property prices are down 8% from Jan 07 - June 07

The Bank of England have announced that loans will now be harder to get. Much higher interest rates.

Yesterday the IMF warns that UK house prices are at risk of falling.

The UK buy to let market is in trouble, rising costs (interest rates specifically) are lowering profits and in a lot of cases rent is no longer paying the mortages.

Most first time buyers in the UK completely priced off the market, average property prices costing anywhere from 5 - 10 times their yearly income.

Reposessions are up around 30% from last year, this will only get a lot worse once the next batch of fixed rate mortages end in 07 and these people see massive hikes in their interest rates.

Some analyists are predicting house prices may drop by 15% in 2008.

This all paints a rather gloom picture in my opinion. It also makes me wonder if I should wait and see what happens in the next few months before buying a place

Definitely a waiting time before investing Coatsy

Noticed banks etc are up to the same old scams with their mortgage lending and have been offering up to five times income (used to be 2 or 3?) and throwing out loans to the sub-prime market, much the same as happened in the US.

Yea... can see the Bank of England tightening up - they have little option but to slam a lid on this market. That is one area where the background is totally different to the US scenario - they actually have an effective fiscal policy and this was managed by Brown as the tight-assed Exchequer Chancellor, so basically the economy is fairly good. But.. any home market hits can affect that, sometimes seriously.

Who knows how bad it can get?? Sure.. can see a 15% drop being possible next year - and possibly further drops the following year. It's fairly easy to have an overall drop of 30% over a few years when a downturn happens. Suspect the US home market will drop further within that range (tho partly because there are a number of other background problems).

Seriously - I'd sit on your capital and have it earning securely and look forward to a better buying price when it does hit the actual bottom. A 20-30% drop on a property sure is a lump less to pay or commit to



PS Kinda related - got some possible biz with a US builder for a number of homes (homes are not going to be in the US - would not dream of doing that right now with two sets of rubber gloves on) and one of our people is in the US now. We reached a stopping point in contracts because it just hit us that the construction company may not exist in the time they have given guarantees. That would leave us with all their potential problems - so, volatile time right now!!

[Paul]

Originally Posted by vendot

Hmmmm I think you would be very smart to do that.... keep any money in a high interest account and wait.

Yep it seems like the wise choice for the next few months, I'm keen to see if interest rates will be cut (I doubt it)

Originally Posted by GreyWolf

Definitely a waiting time before investing Coatsy

Yep it certainly looks that way

At least the interest rates are decent at the moment

Originally Posted by GreyWolf

Noticed banks etc are up to the same old scams with their mortgage lending and have been offering up to five times income (used to be 2 or 3?) and throwing out loans to the sub-prime market, much the same as happened in the US.

300,000 subprime mortages in the UK, that's another factor that probably won't come into play until 2008. How many of those will default!

And now the mortage companies are withdrawing a lot of different mortages

http://news.bbc.co.uk/1/hi/business/7048592.stm

UK lenders have withdrawn 40% of their mortgage deals in the past three months, according to the financial information company Moneyfacts.

Originally Posted by GreyWolf

Yea... can see the Bank of England tightening up - they have little option but to slam a lid on this market. That is one area where the background is totally different to the US scenario - they actually have an effective fiscal policy and this was managed by Brown as the tight-assed Exchequer Chancellor, so basically the economy is fairly good. But.. any home market hits can affect that, sometimes seriously.

Well at least it's not all bad

Originally Posted by GreyWolf

Who knows how bad it can get?? Sure.. can see a 15% drop being possible next year - and possibly further drops the following year. It's fairly easy to have an overall drop of 30% over a few years when a downturn happens. Suspect the US home market will drop further within that range (tho partly because there are a number of other background problems).

I've thought about putting a few bids in at around 20% under the asking price during the start of 08 to see if anyone needs to sell. I'm not really sure if that's a great idea.

Personally I feel that UK house prices will not drop more than 20%. Like you have said above, the UK economy is in a better state than the US economy, we don't have anywhere near as serious a subprime problem as the US has plus as things stand we have a massive shortage of housing which may well help stop the prices from declining too sharply.

So I feel the prices will drop around 10% - 20% in total over the next 2 years and then they will stay the same price for quite some time but it's all an educated guessing game

Originally Posted by GreyWolf

Seriously - I'd sit on your capital and have it earning securely and look forward to a better buying price when it does hit the actual bottom. A 20-30% drop on a property sure is a lump less to pay or commit to

You're not wrong

Originally Posted by GreyWolf

PS Kinda related - got some possible biz with a US builder for a number of homes (homes are not going to be in the US - would not dream of doing that right now with two sets of rubber gloves on) and one of our people is in the US now. We reached a stopping point in contracts because it just hit us that the construction company may not exist in the time they have given guarantees. That would leave us with all their potential problems - so, volatile time right now!!

Uncertain times

[Furious_Male]

Originally Posted by eroswebmaster

I have a solution, let's just print more money.

Thats exactly how Big Ben thinks. Hes been propping the equities market up at the expense of the dollar. Pigs saving Pigs.

Now there is talk of another rate cut. This entire house of cards will collapse soon enough. I am short 85% of my portfolio (home builders and mtg companies have been easy shorts). If you can take the lumps short term there is money to be made when the equities market rolls over. Of course the question is what will the profits be worth if the dollar is in the toilet.

If your sick of how our govt is handling things take a close look at this petition. http://financialpetition.org/ The owner of the site runs a financial blog and is faxing all the petitions to the appropriate parties on his dime.

[GreyWolf]

Originally Posted by Coatsy

as things stand we have a massive shortage of housing which may well help stop the prices from declining too sharply.

Damn - forgot about that bit! Yep - sounds right - there is not enough housing on the market (tho a blip will have an ripple) and a long way to go before that market saturates with actual home stock.

This is again different to the US where there is an increasing excess stock of homes available for sale - something like 4-5 months worth in a normal sales environment.

Always been amazed at the level UK homes have risen over the past 20 years - really silly money. Also amazing how little you get for the money. A fairly modest semi in eg Brighton seems to cost about 350K+ ish ($700K) - a normal detached home can cost anything from 450K ($900K) up into the millions. Then there's the maintenace costs and property taxes

The differences in other counties can also hit you in the face - like (forgetting any current home problems) - you can get a fairly good home in the US for $400K - that's only 200K GBP. Here, you can get almost get an estate for the cost of the semi in Brighton - tho that has been changing for a few years, but still buys a lump of home. The other absurdity about here is property taxes are around $100-150/year - they would not even move your garbage for that money in the UK

YUCK is about the only word I can say to sum this up.

[axelez]

Originally Posted by WiredGuy

Any sponsors paying in precious metals?
WG

what he said .......

[Pornwolf]

Countdown to a "One World" currency: T-50 years...

[sweetpurple04]

buy sobegirl videos.. they were once sold for 10 dollars each.. now they are 40 dollars. Next 5 years they will be worth 100 dollars each. Invest in SoBeGirl Video

[$5 submissions]

Originally Posted by sweetpurple04

buy sobegirl videos.. they were once sold for 10 dollars each.. now they are 40 dollars. Next 5 years they will be worth 100 dollars each. Invest in SoBeGirl Video

DAYUM!!!!!!!!! QUICK SOMEBODY MAKE A CONFERENCE CALL TO ALL THE HEDGEFUND MANAGERS!!!! BLING BLING!!!!

[wyldblyss]

I never thought I would see this happen so quickly. I mean, lately it is like the $'s is jumping off a bridge it is dropping so fast.