Russia Stops Supporting US Dollar

[xpanda]

Central Bank stops supporting dollar

13:20 2004-10-22
The weighted average dollar exchange rate was 29 RUR/USD in the first 90 minutes of trade at a special session today. Thus, the official dollar rate for October 23-25 will decrease by RUR0.12. This is the most considerable one-day drop of the dollar against the ruble since late April. The low on the deals was even 28.95 RUR/USD at the UTS.

According to commercial bank dealers, the Central Bank has not supported the dollar despite a large selling of dollars by market participants.

Banks sold over $436m at a special session at 11:30 a.m. Moscow time. Yesterday, the trade volume was just $19m at the UTS at the same time. The average lot of dollars to be sold was $1.7m in the first 90 minutes of trading.

A Bank of Moscow expert told RBC TV that the trade volume on MICEX including a special session for today deals almost reached $1bn in the first 30 minutes of trading. The expert said that the Central Bank's activities could be attributed to the dollar's decrease on international exchanges and growth in the gold and currency reserves in Russia. However, the Central Bank's leaving the market at the end of the week was quite unexpected. The specialist thinks that the Central Bank is currently concerned about its obligations on preventing inflation.

http://newsfromrussia.com/main/2004/10/22/56751.html

Phaedrus, WildBill and any other economics-savvy individuals: how serious is this and what impact will it have on the global economy? How long will it be before other countries follow suit?

 

[eek.]

my 2cents

My own opinion is that Bush is seriously devaluing the dollar on purpose.
His economic strategy bears this out.(huge deficit, crazy tax cuts)

The currency markets will reflect this stuff, leave it to crash-land and buy when its around the bottom.


As usual, the little guys will do the heavy lifting in the shape of wage cuts/job losses.

The bit I'm not sure about is if OPEC gets pissed off and abandons the dollar for a barrel of oil, and switches to euros.

If they do that, goodness knows what happens....

 

[docmercer--banned]

EEK ..

that is a great point ... the Arab world would love to collapse this country economically and who knows what happens if Bush is put back in power

 

[GAMEFACE]

I don't see a stronger economy on the face of the earth. People are floating, flying and crawling to get to America. It will be OK if Bush wins.

 

[xpanda]

my 2cents

My own opinion is that Bush is seriously devaluing the dollar on purpose.
His economic strategy bears this out.(huge deficit, crazy tax cuts)

Why? To pull a George Soros and make a bundle in currency valuation? Or is this the uber-version of the so-called Conservative Agenda to force the elimination of most or all entitlements?

The bit I'm not sure about is if OPEC gets pissed off and abandons the dollar for a barrel of oil, and switches to euros.

I recall reading a lengthy article about a year and a half ago implying that part of the motive for the Iraq war was to prevent this very thing.

If they do that, goodness knows what happens....

I can't imagine it's been in the best economic or political interest for global trade to be based on one currency, though I don't profess to understand the issue very well. A total collapse of the US dollar would be horrifying, to say the least. Canada is reliant on the US as our major export market.

 

[charleslanger]

Currencies cycle up and down, there's standard deviation-- it's practically impossible to rise forever or to stay even without fluctuating significantly and/or for extended periods at times. And for every American industry that suffers from a falling dollar, there's a counterpart that benefits from that scenario........same happens in other countries: some are happy to see our dollar rise vs their currency, others the converse.

Anywhow, there's on the order of several times more dollars outside than inside the US-- the common man the world over loves dollars: in fact, given a choice between dollars and their local currency, guess which one wins hands down? I never exchange currency when traveling-- and have never NOT had my dollars cheerfully accepted anywhere.

And I fail to understand the part about the oil-rich Arab states(at least the less radicals ones) hoping their best / biggest customer goes bust, likely causing a tumble in prices-- oil is the only natural / exportable resource(of consequence) in most of those countries...

 

[bblight]

The value of the dollar - just like the rest of the free world is based on international fiat - in other words, the value of the dollar is supported by the international market.

If the central monetary authority in one particular country is doing something with the dollar - it is usually in relation to their own currency.

If I were you, I'd take a look at the structure of the Ruble - any move to devalue the dollar by the Russian central bank is probably to support the Russian economy and prevent a massive devaluation of the Ruble!

eek - I strongly suggest that you read a real NEWSpaper that tells the truth, and then get a non-revisionist book on the international monetary structure - and then talk. You sound very foolish making such an assinine statement about the health of the $.

Until the fiat system collapses (which is a possibility - unthinkable, but a possibilty), the world market will continue to function as the best monetary system there ever was.

As long as all of the major players "float' theior currencies in the world marketplace - that's the Euros, the US,Canada and South America, China, India, Aus/NZ, and the rest of the far East, - no one will do anything to rock the cart - lest they do irrepearable damage to their own economies.

 

[JudgeWapner]

Question. I like to keep a portion of my assets in cash. Would it be smart to keep some in Euros as well as dollars?

 

[Marco]

Judge....Wouldn't hurt to have a few Kruggerrands around.....

If there ever comes a day when gold is worthless you might as well check into a cemetary...

 

[eek.]

3cents

Question. I like to keep a portion of my assets in cash. Would it be smart to keep some in Euros as well as dollars?

I wouldn't be worried if I was spending the rest of my life in CR Judge.

If you're a rich dude, your advisors will give you the options.
I think the $$ is already pretty weak, but Shrubby isn't helping to strengthen it.

 

[JudgeWapner]

Far from rich,just trying to hold on to a little of what I have. Do plan on living out my life here. May also buy a little land either here or in Nicaragua.