money

And how would you like to pay, sir – cash, credit card, or Bitcoin?

"In Iceland, people liked to build their own houses at the time, but they couldn't put the money they were saving to build their homes into the bank, because it disappeared. Somebody had the idea to buy certificates in building materials in advance, and those certificates were denominated in cubic metres of concrete. It became very popular on payday, and our company would issue the certificates. One day the company got a call from the inland revenue asking if we had issued these vouchers. We confirmed it, but asked why they wanted to know. The official said somebody was trying to use the vouchers to pay his taxes." Continue reading →

Continue ReadingAnd how would you like to pay, sir – cash, credit card, or Bitcoin?

Marc Faber: This Will End In Disaster

"With gold and silver plunging, the US dollar strengthening, and oil still above $100 a barrel, today Marc Faber told King World News this will 'end in disaster.' This is part I of a series of written interviews that will be released today on KWN in which Faber discusses the end game, government theft, how investors can protect themselves, gold, silver, bail-ins, central planner actions, global markets, and much more." Continue reading →

Continue ReadingMarc Faber: This Will End In Disaster

Credit card transactions for gold purchases curtailed in India

"Buying gold in India has got a little more difficult for consumers used to using plastic money to buy large jewellery sets or heavy gold ornaments. India's apex bank has asked banks not to convert gold purchases done through credit cards into equated monthly installments. Continuing its fight against gold consumption, the Reserve Bank of India is leaving no stone unturned to discourage gold buyers in India. The ban on conversion of gold purchases at jewellery stores into equated monthly instalments for credit card purchases has already triggered a slump in sales." Continue reading →

Continue ReadingCredit card transactions for gold purchases curtailed in India

Can the Fed Become Insolvent?

"In light of my recent posts on Morgan Stanley’s analysis of this question–which show that a rise of less than a percentage point across the yield curve would render the Fed 'bankrupt'–let me direct you to my original Mises.org essay on this question. I walk through various hypothetical Fed balance sheets to show what we mean by saying it could become insolvent. Then, in this article I walk through the January 2011 change in accounting rules that was instituted so that technically, the Fed can’t have negative equity from a fall in its asset prices. It would, however, drive home to more people around the world just how screwy our 'modern' monetary system really is." Continue reading →

Continue ReadingCan the Fed Become Insolvent?

Switzerland Will Join Race to Be Trading Hub for China’s Yuan

"Switzerland plans to bid to become an offshore yuan trading center in Europe, competing with Frankfurt and London to corner trade in the Chinese currency. 'It is in Swiss interest to have a renminbi hub in the center of Europe,' Economy Minister Johann Schneider-Ammann said in Beijing yesterday after signing a free trade agreement with Chinese Commerce Minister Gao Hucheng. While no official talks have taken place, Schneider-Ammann said he hopes the idea will become 'more serious' in the coming weeks or months." Continue reading →

Continue ReadingSwitzerland Will Join Race to Be Trading Hub for China’s Yuan

Toronto Reviews Bid to Become Yuan Currency Trading Hub

"Canada’s banks are considering a plan to make Toronto the first North American trading hub for China’s yuan, joining a global race for a share of trading in the currency of the world’s second-largest economy. The moves to set up a trading hub in Canada come as an organization representing Frankfurt’s financial industry predicts the European Central Bank is nearing a deal with China that will help the German financial center become a European yuan trading hub. The Bank of England signed a similar but smaller agreement last month, joining other recent additions like Australia, Turkey, Brazil and South Korea as China pushes for greater use of its currency outside the mainland." Continue reading →

Continue ReadingToronto Reviews Bid to Become Yuan Currency Trading Hub

China signals will cut off credit to rebalance economy

"China said on Friday it would cut off credit to force consolidation in industries plagued by overcapacity as it seeks to end the economy's dependence on extravagant investment funded by cheap debt. The State Council said it would ensure credit kept flowing to businesses that it thought had competitive products, but it would work with banks to oversee a gradual winding down of other businesses. Friday's announcement was the latest sign that China's policymakers are determined to bring debt-fuelled expansion under control, after the central bank allowed a cash crunch last month that sent short-term lending rates to record highs." Continue reading →

Continue ReadingChina signals will cut off credit to rebalance economy

More trade payments settled in yuan

"Changes such as a pilot quota scheme announced in March that allowed a handful of foreign companies operating in China to move funds freely across borders is boosting trade volumes and encouraging other foreign firms to settle trade in yuan. A cash squeeze in the mainland in recent weeks may have made some firms reluctant to use yuan to settle payments, but that appears to have been a temporary impediment as money market rates have come back down. Redenominating Chinese trade in the yuan versus U.S. dollars has always been the primary goal for Beijing and analysts expect the recent wave of reforms to boost yuan trade settlement." Continue reading →

Continue ReadingMore trade payments settled in yuan

Selling in Chinese Yuan: A Tool for U.S. Exporters

"China's 'internationalization' of the RMB shouldn't be confused with liberalization; its borders are still far from porous when it comes to moving money, and the process comes with a lot of paperwork and bureaucracy, said Kok-Chi Tsim, managing director for international banking at J.P. Morgan Chase Bank N.A. in Chicago. Still, it could be worth it for many exporters as a means of cutting costs and attracting new customers, Mr. Tsim said at a breakfast seminar organized by the Georgia China Alliance and attended by more than 40 people.On average Chinese exporters charge about a 5 percent premium to settle transactions in U.S. dollars versus RMB." Continue reading →

Continue ReadingSelling in Chinese Yuan: A Tool for U.S. Exporters

Chinese RMB likely to replace dollar in global trade

"Globally, the use of RMB has been increasing since 2009, when China launched a pilot programme to internationalise its currency by allowing the RMB to be used to settle cross-border trade. Since then, China’s trading partners have increasingly been able to use the RMB when paying for imports or receiving payments for exports. In 2012, 12 percent of China’s total trade was paid for in RMB, up from three percent in 2010. By 2015, HSBC expects that around 30 percent of China’s total trade — equivalent to around $2 trillion — will be settled in RMB. There are more than 30 markets worldwide conducting over 10 percent of their business with China in RMB." Continue reading →

Continue ReadingChinese RMB likely to replace dollar in global trade