patrick.net

jykiodfgr says

The global community no longer accept Western currencies. It's Ruble or Yuan only.

Good thing our resident clown performs for free. :D

Dammit, just had a nice vacation in Britain when it was $1.20 per pound. I guess I shouldn't complain since that was a great discount over previous level.

But why is the pound getting pounded?

My guess is because the US has raised interest rates enough that the dollar is much more attractive to foreign investors.

ZipperTits says

jykiodfgr says

The global community no longer accept Western currencies. It's Ruble or Yuan only.

Yeah, right. Not even the Chinese want yuan.

Don't spoil the act: https://patrick.net/post/1347533/2022-09-23-adopt-a-european-now?start=1#comment-1880765

jykiodfgr says

Patrick says

But why is the pound getting pounded?

Because the global community no longer treats Western currency as reserve currencies after the Russian confiscation.

See https://finviz.com/futures_charts.ashx
All Western currencies are going to 0 with the exception of the dollar.

For this particular "event" they are probably teaching the new "King" who the boss is.

This is a juicy one for the predictions thread.

Care to put an ETA on it?

China is trying to drop the Yuan because the Yen has fallen so much. They must be considering devaluing the yuan
again because something spooked the Japanese. Japan is using its valuable US treasuries to support the Yen.

In the UK, people are realizing that they run a trade deficit of about 8% of GDP currently. Added to that their government is running a deficit of about 8% of GDP. The inflation rate in the UK for CPI is forecasted at 18% in the beginning of 2023 by Citi. In the UK they ain't got 30 year fixed mortgages, they are variable rate. The sheer amounts of personal and business defaults will be immense. They are probably going to have to nationalize everything. ---- So yep 3rd world

In Euroland, the ECB is the only buyer of Italian debt. Italy will probably run a Federal deficit of at least 7%. With Germany needing to borrow huge amounts to keep its economy semi-working...the Euro could easily go the route of confetti.

The sheer amount of margin calls people are getting today must be ginormous.

I wonder what the geniuses at Credit Suisse were up to this time. They are down about 13%

Sorry folks, but until Gold can close above $2K USD per oz, consistently, I'm not buying the end of western currencies.

Instead, it's just confirming a market fundamental and that's that the Euro and the Pound were never that strong to begin with, outside of the FX trading market space. So what's happened is that all that hedging towards a basket of EUR, GBP, etc, didn't pan out as expected given the weaknesses of both sets of economies.

Patrick says

Dammit, just had a nice vacation in Britain when it was $1.20 per pound. I guess I shouldn't complain since that was a great discount over previous level.

I will claim for a refund. You were rip off.

ZipperTits says

jykiodfgr says

I don't think the Euro will exist in 2 years time.

Bump that up to ~5 years. For a buffer.

May be replaced for gold. Gold is still cheap and going down. That would be a big problem for banks with fiat money.

The moment the US flips back on the extraction of fossil fuel switch, it's all over for alt world currencies.

(Imagine what would happen if a simple rule was passed that 90% of gov spending needed to be spent on US made things from chairs to steel girders, that's more money than all of China's imports into the USA).

The British Pound is almost at is all time low set in 1985. I see this trend reversing eventually just like with any commodity or asset.

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Friday’s measures were billed by the government as heralding a new era for the U.K. focused on growth, and included a mix of tax cuts and investment incentives for businesses.

Investors also ditched U.K. bonds amid a rise in expected government debt. Paul Johnson, director of the Institute for Fiscal Studies, said markets appeared “spooked” by the scale of the “fiscal giveaway,” and said it represented the highest level of tax cuts in half a century.

"With the U.K. hitting a record debt-to-GDP ratio, the pound is vulnerable to a downward revision if foreign investors are reluctant to fund the deficit, Foley said; and “markets are clearly very doubtful of the ability of this government to manage debt.”

https://www.cnbc.com/2022/09/23/british-pound-plunges-to-fresh-37-year-low-of-1point10-.html
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jykiodfgr says

The trend is just getting started. The Russian theft killed all Western currencies, except for the dollar, for now.

OK, so how much of this is being encouraged by the Chinese Communists (Chicoms) as this strengthens their economy relative to the West ?

So the West's currencies collapses and the currency of China and Russia fare a lot better ?

I was thinking that all this drop in gas prices was a ruse cause Birdbrain Biden tapped the emergency oil reserves and they are at the lowest level since 1984.

After the midterms with our dollar dropping in value especially, I won't be surprised if gas prices go back up.

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jykiodfgr says

China hasn't even started selling their reserves yet,

China owns about $1 trillion in debt. Since their maximum holding of $1.4 trillion in 2014, they have been reducing their ownership of US debt.

It would not be that significant if China lost 50% of value of that $1 trillion over the course of 3 to 4 years.

https://www.npr.org/2022/08/23/1119126863/chinas-slice-of-the-us-debt-pie

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Misc says

The sheer amount of margin calls people are getting today must be ginormous.

I wonder what the geniuses at Credit Suisse were up to this time. They are down about 13%

People get their heads-up from Patrick.net. Nice to get info before the rest of the world.

https://www.reuters.com/business/finance/credit-suisse-executives-reassure-investors-after-cds-spike-ft-2022-10-02/

Good to know that the Europeans have an extra $2 trillion laying around. I doubt their populations are going to be feeling in the mood to help combat world hunger for the next couple of years.

$2 trillion in EXTRA electric bills forecast for just for the household sector of Europe.

https://fortune.com/2022/09/06/europe-energy-bills-soar-two-trillion-2023-goldman/

Assuming 500 million people, that means $4000 per person.

Goldman Sachs report this recently.

Sep 8, 2022 — A typical family in the EU could face energy bills of €500 per month by early next year without the introduction of price caps

there's money to be made from this economic crash, big fucking money guys...

Guys remember that housing crash that most of us gained on, but pros like eman/pkennedy made a killing? well, that time is coming again. just a lot of it is overseas I think.

@FortWayneAsNancyPelosiHaircut I agree money, serious money is to be made, but I'm not good enough, nor have I been paying enough attention to The EU to know how much more things will fall and when it may rebound. Plus currencies aren't something I've ever dabbled in. Pound Sterling at sub $1.10 sounds like a bargain, but with the energy crunch in the EU, it sounds as if it's going to get worse before it gets better. It's all about timing. Markets aren't at a bottom yet... I'd say another 10% drop before we find a true bottom, at least in the Dow Jones.

FortWayneAsNancyPelosiHaircut says

there's money to be made from this economic crash, big fucking money guys...

Guys remember that housing crash that most of us gained on, but pros like eman/pkennedy made a killing? well, that time is coming again. just a lot of it is overseas I think.

Okay, so you mean like buy Puts in housing stocks like ticker ITB ? How about buying natural gas companies ?

The S&P 500 is already down 25% from its 52 week high and about 8% above the all time high in February 2020.

Accounting for inflation (about 16% from February 2020 to now), the S&P 500 's real gain is negative, hence the Fed effectively wiped out any COVID gains.
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