Tag Archive for Global Markets

The Cyprus Bailout Exposes a World of Thieves, Cheats, and Liars – Shah Gilani

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. Let’s talk about the Cyprus bailout, the International Monetary Fund, and the European Central Bank. Let’s call what the IMF and ECB are doing what it really is. After all, it is the ultimate institutional goal. It’s thieving.…

Italian Elections: Split Vote “Worst-Case” for Eurozone – Money Morning

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. If preliminary results prove accurate, the Italian elections will result in a “hung” parliament, meaning no party will have enough seats to form a government. The lack of a definitive result could temporarily paralyze the Eurozone’s third-largest economy…

Would Turkey in the Shanghai Co-op Cause a Global Power Shift? – Money Morning

Is Turkey about to join the Shanghai Cooperation Organization (SCO)?

After years of delay on its application to join the European Union (EU) as a full member, Turkey has made overtures to the SCO as an alternative to the EU.

Turkish Prime Minister Recep Tayyip Erdogan said after a meeting with Russian Prime Minister Vladimir Putin that Turkey was seriously considering becoming a member of the SCO instead of continuing its efforts to join the EU.

“The European Union needs to stop stalling us,” Erdogan said. “We have a strong economy. I told [Putin], ‘You should include us in the Shanghai Five [the former name of the SCO] and we will say farewell to the European Union.’ The Shanghai Five is much better off economic-wise. It is much more powerful. We told them, “If you say come, we will.'”

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Eurozone Debt Crisis: Why U.S. Investors Still Can’t Relax – Money Morning

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. After nearly four years, billions in bailouts and increasingly strict austerity measures, not only is the Eurozone debt crisis no closer to resolution, but the attempts to solve it are pushing the region deeper into recession. According to…

Why Russia is Investing in Gold More Than Anyone – Money Morning

Now we know what Russia has been doing all these years with all its oil mega-profits: investing in gold.

A Bloomberg News article Monday reported that Russia’s central bank added 570 metric tons of gold in the past decade, making the country the world’s biggest gold buyer. That amount is a quarter more than the world’s second-biggest buyer, China.

The amount of gold Russia added to its stockpile is almost triple the weight of the Statue of Liberty, according to Bloomberg.

It certainly makes sense for Russia to add to its official gold reserves. Gold prices have gained about 400% over the past decade.

“The more gold a country has, the more sovereignty it will have if there’s a cataclysm with the dollar, the euro, the pound or any other reserve currency,” Evgeny Fedorov, a lawmaker for Putin’s United Russia party in the lower house of parliament, told Bloomberg in a telephone interview in Moscow.

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Best Investments 2013: What to Buy as Global “Currency Wars” Begin – Money Morning

Japanese Prime Minister Abe’s recent success in talking the yen lower against other currencies has increased fears over “currency wars.” Now investors are on the hunt for the best investments to profit from central bankers’ “race to the bottom” in 2013.

As we’ve pointed out, the Japanese have done nothing overt to weaken the yen – yet. Markets were massively long the Japanese currency and, when Prime Minister Abe called for “unlimited easing” during the election campaign last year and in the run-up to selecting a new Bank of Japan governor, that was all traders needed to hear to begin selling their yen long bets and taking out short positions.

Abe’s great success was in getting the market to do all of the heavy lifting for him.

In fact, Abe has been a little too successful. Minister of Finance Taro Aso told reporters in Tokyo on Friday that the yen had weakened too quickly, which prompted an immediate reversal in the currency markets.

Aso’s comments came after remarks by European Central Bank President Mario Draghi Thursday raising concerns that the recent strength of the euro might derail the recovery just gathering momentum in Europe now.

Looking at the interplay of comments from Draghi and Aso last week, it is tempting to think that all of this commotion in the currency markets is being coordinated at the highest level of central banking.

But, with the exception of China, which has been quietly pushing the renminbi toward the lower end of its trading range, no one has done anything. It’s all just talk.

In the financial markets, however, talk is a big industry. Talk gets people to put on trades and that is how bankers and brokers make money.

This leaves investors wondering the best currencies to invest in to profit from these fluctuating values, which is why Morgan Stanley developed a currency war basket trade.

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