De-Dollarization Continues: Russian Oligarchs Shift Cash To Hong Kong Dollars On Sanctions Concerns
Submitted by Tyler Durden on 08/04/2014 18:31 -0400
Last week we noted the very significant activity by the Hong Kong Monetary Authority as it bought USDollars in size to support its peg. It appears we have found at least one smoking gun for why they were forced to do this. In what appears to be another sanctions-blowback, Russian oligarchs are de-dollarizing their cash holdings and shifting to Hong Kong Dollars. As Bloomberg reports, various Russian entities are shifting up to 40% of their cashto HKD. “Keeping money in Hong Kong dollars is essentially equivalent to keeping it in U.S. dollars because of the currency peg," notes BofA's Vladimir Osakovskiy, adding "for Russian companies it’s still much safer from the standpoint of sanctions."
OAO MegaFon (MFON), billionaire Alisher Usmanov’s wireless operator, said it has been shifting cash holdings into Hong Kong dollars, a move people say metals producer OAO GMK Norilsk Nickel (GMKN) is also undertaking, as the U.S. and Europe ratchet up sanctions against Russia.MegaFon decided to keep about 40 percent of its cash in Hong Kong dollars given the global markets disturbances, Chief Financial Officer Gevork Vermishyan said in a phone interview. The Moscow-based carrier has traditionally kept its foreign cash in U.S. dollars and euros, according to the company.Norilsk Nickel, the world’s largest producer of nickel and palladium, is also keeping some of its cash in Hong Kong dollars now, two people with knowledge of situation said, asking not to be identified as information isn’t public.
The Hong Kong dollar has been linked to the U.S. dollar since 1983, and its fluctuation from the American currency hasn’t exceeded 1 percentage points since then...
“Keeping money in Hong Kong dollars is essentially equivalent to keeping it in U.S. dollars because of the currency peg,” said Vladimir Osakovskiy, chief economist of Bank of America Corp.’s Russian unit. “Still,for Russian companies it’s much safer from the standpoint of sanctions.”
* * *
One more chip in the US Dollar's global hegemony armor...
One more chip in the US Dollar's global hegemony armor...
India Slams US Global Hegemony By Scuttling Global Trade Deal, Puts Future Of WTO In Doubt
Submitted by Tyler Durden on 08/01/2014 15:44 -0400
Yesterday we reported that with the Russia-China axis firmly secured, the scramble was on to assure the alliance of that last, and critical, Eurasian powerhouse: India. It was here that Russia had taken the first symbolic step when earlier in the week its central bank announced it had started negotiations to use national currencies in settlements, a process which would culminate with the elimination of the US currency from bilateral settlements.
Russia was not the first nation to assess the key significance of India in concluding perhaps the most important geopolitical axis of the 21st century - we reported that Japan, scrambling to find a natural counterbalance to China with which its relations have regressed back to World War II levels, was also hot and heavy in courting India. “The Japanese are facing huge political problems in China,” said Kondapalli in a phone interview. “So Japanese companies are now looking to shift to other countries. They’re looking at India.”
Of course, for India the problem with a Japanese alliance is that it would also by implication involve the US, the country which has become insolvent and demographically imploding Japan's backer of last and only resort, and thus burn its bridges with both Russia and China. A question emerged: would India embrace the US/Japan axis while foregoing its natural Developing Market, and BRICS, allies, Russia and China.
We now have a clear answer and it is a resounding no, because in what was the latest slap on the face of now crashing on all sides US global hegemony, earlier today India refused to sign a critical global trade dea. Specifically, India's unresolved demands led to the collapse of the first major global trade reform pact in two decades. WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" in Bali, Indonesia, last December, but were unable to overcome last minute Indian objections and get it into the WTO rule book by a July 31 deadline.
WTO Director-General Roberto Azevedo told trade diplomats in Geneva, just two hours before the final deadline for a deal lapsed at midnight that "we have not been able to find a solution that would allow us to bridge that gap."
Reuters reports that most diplomats had expected the pact to be rubber-stamped this week, marking a unique success in the WTO's 19-year history which, according to some estimates, would add $1 trillion and 21 million jobs to the world economy.
Turns out India was happy to disappoint the globalists: the diplomats were shocked when India unveiled its veto and the eleventh-hour failure drew strong criticism, as well as rumblings about the future of the organisation and the multilateral system it underpins.
"Australia is deeply disappointed that it has not been possible to meet the deadline. This failure is a great blow to the confidence revived in Bali that the WTO can deliver negotiated outcomes," Australian Trade Minister Andrew Robb said on Friday. "There are no winners from this outcome – least of all those in developing countries which would see the biggest gains."
Shockingly, and without any warning, India's stubborn refusal to comply with US demands, may have crushed the WTO as a conduit for international trade, and landed a knockout punch when it comes to future relentless globallization which as is well known over the past 50 or so years, has benefited the US first and foremost.
Broke, debt-monetizing Japan, which as noted previously, was eager to become BFFs with India was amazed by the rebuttal: "A Japanese official familiar with the situation said that while Tokyo reaffirmed its commitment to maintaining and strengthening the multilateral trade system, it was frustrated that such a small group of countries had stymied the overwhelming consensus. "The future of the Doha Round including the Bali package is unclear at this stage," he said."
Others went as far as suggesting the expulsion of India:
Some nations, including the United States, the European Union, Australia, Japan and Norway, have already discussed a plan to exclude India from the agreement and push ahead, officials involved in the talks said.
However, such a move would clearly be an indication that the great globalization experiment is coming to an end: "New Zealand Minister of Overseas Trade, Tim Groser, told Reuters there had been "too much drama" surrounding the negotiations and added that any talk of excluding India was "naive" and counterproductive. "India is the second biggest country by population, a vital part of the world economy and will become even more important. The idea of excluding India is ridiculous." ... "I don't want to be too critical of the Indians. We have to try and pull this together and at the end of the day putting India into a box would not be productive," he added.
And yes, the death of the WTO is already being casually tossed around as a distinct possibility:
Still, the failure of the agreement should signal a move away from monolithic single undertaking agreements that have defined the body for decades, Peter Gallagher, an expert on free trade and the WTO at the University of Adelaide, told Reuters."I think it's certainly premature to speak about the death of the WTO. I hope we've got to the point where a little bit more realism is going to enter into the negotiating procedures," he said.
But the one country that was most traumatized, was the one that has never before been used to getting a no answer by some "dingy developing world backwater": the United States, and the person most humiliated, who else but John Kerry.
"U.S. Secretary of State John Kerry told Prime Minister Narendra Modi on Friday that India's refusal to sign a global trade dealsent the wrong signal, and he urged New Delhi to work to resolve the row as soon as possible." "Failure to sign the Trade Facilitation Agreement sent a confusing signal and undermined the very image Prime Minister Modi is trying to send about India," a U.S. State Department official told reporters after Kerry's meeting with Modi.
Wrong signal for John Kerry perhaps, who is now beyond the world's "diplomatic" laughing stock and the man who together with Hillary Clinton (and the US president) has made a complete mockery of US global influence in the past 5 years. But just the right signal for China and of course, Russia.
De-Dollarization Spreads: Swiss & Chinese Central Banks Enter Swap Agreement
Submitted by Tyler Durden on 07/25/2014 19:15 -0400
Submitted by Martin Armstrong via Armstrong Economics,
The Swiss National Bank and the People’s Bank of China reached a currency swap agreement this week. While this is not a huge trend changer in the near-term, it demonstrates that our forecast for China to become the largest economy and to be the next financial capital of the world when Europe and the USA blow themselves apart with defaulting socialism is on track. This agreement will allow the two central banks to buy and sell their currencies up to a limit of 150 billion renminbi, or 21 billion Swiss francs ($23.4 billion).
The deal will also allow the Swiss central bank to invest some of its huge accumulation of foreign exchange reserves in the Chinese bond market.
The Zurich-based SNB said the agreement will further strengthen collaboration between it and its Chinese counterpart and is a “key requisite for the development of a renminbi market in Switzerland.” It could also facilitate trade and investment between the two countries, the PBOC said. This demonstrates that China is moving in the correct direction.
Turkish PM Cuts Ties With US, Mulls De-Dollarization With Russia
Submitted by Tyler Durden on 07/22/2014 16:27 -0400
"De-Dollarization" Continues - China Starts Direct Trade With UK
90% Of Gazprom Clients Have "De-Dollarized", Will Transact In Euro & Renminbi
Russia Holds "De-Dollarization Meeting": China, Iran Willing To Drop USD From Bilateral Trade
China Halts US Dollar Transactions With Afghan Banks
As Turkey's graft probe continues (which the Prime Minister believes is a conspiracy - fact or not - created by The West), AP reports that Recep Tayyip Erdogan has said he no longer holds "direct" telephone conversations with U.S. President Barack Obama, suggesting a rift between the leaders who were once close. What is perhaps even more concerning is Turkey's recent de-dollarization discussions with Russia to move to settlement in local currencies. It appears 'allies' are falling by the way-side quicker than many thought...
Turkey shuns Obama... (via AP)
Turkish Prime Minister Recep Tayyip Erdogan has said he no longer holds "direct" telephone conversations with U.S. President Barack Obama, suggesting a rift between the leaders who were once close.In an interview with Turkey's ATV television late Monday, Erdogan said that "in the past, I used to call him directly. Because I was not able to get direct results on Syria, now our foreign ministers talk to each other."Erdogan did not elaborate. But the Turkish leader is known to have been frustrated by U.S. reluctance for a military involvement in Syria to end the violence there.Erdogan told ATV he speaks with Vice President Joe Biden to discuss Iraq.In the past, Obama cast Turkey as a model democracy and the two would frequently talk by telephone.
Turkey prepares to De-Dollarize with local currency settlement with Russia... (via Google Translate)
In Sydney, the Minister of Economic Development of the Russian Federation Alexei Ulyukayev "on the margins" of the meeting of trade ministers of the "Group of Twenty" met with the Minister of Economy of the Republic of Turkey Nihat Zeybekchi.In 2013, the volume of trade between the countries amounted to 32.7 billion dollars. Russia is the second (after the EU) among foreign trade partners of Turkey, and Turkey - the eighth largest trade partner of Russia.As one of the measures to stimulate the development of trade and economic relations between Russia and Turkey, the Turkish side proposes to proceed in mutual national currencies. The question now being discussed at the site of the bilateral Working Group on banking and financial cooperation.Minister of Economy of the Republic of Turkey Nihat Zeybekchi noted that the Turkish side is interested in building on the territory of Russian transport and logistics center for the provision of warehousing, customs clearance, loading and unloading, packing of goods, etc., which is connected with the sea ports, airports and railways and highways.Discussion of all issues Ministers agreed to continue an ad hoc working group in late September in Istanbul.
* * *
Making friends and influencing people the world over...
Making friends and influencing people the world over...
Following the initial de-dollarization meeting , there has been a slew of anti-dollar moves around the world (including Gazprom's shift of 90% of its clients to non-dollar payments ). However, ... de-dollarization meeting, there has been a slew of anti-dollar moves around the world (including Gazprom's shift of ...
Story - Tyler Durden - 06/19/2014 - 22:27 - 125 comments - 0 attachments
something akin to "this is not over yet." With "De-Dollarization ... stampede go next? My wallet has become My wallet has become de-dollarized. Happens waaaaay to often. I hardly get out of the Dollar Store withoutde-dollarization happening. Nah, they can ...
Story - Tyler Durden - 06/07/2014 - 23:03 - 217 comments - 0 attachments
in Russia, a "de-dollarized" world. Voice of Russia reports citing Russian press sources ... it is about to get it. The "de-dollarization meeting” was chaired by ... "De-Dollarization Meeting", "De-Dollarization Meeting", is that like a Tupperware party, except financial ...
Story - Tyler Durden - 05/14/2014 - 10:47 - 579 comments - 0 attachments
The de-dollarization escalates. As Reuters reports , Chinese banks have halted dollar ... The impact on business had been felt immediately , he said. De-Dollarization or Anti-Terrorist ... meet gold. DE-DOLLARIZATION pickin'up DE-DOLLARIZATION pickin'up momentum bitchez! ...
Story - Tyler Durden - 05/22/2014 - 10:35 - 137 comments - 0 attachments