| Teesus | Date: Tuesday, 2013/08/20, 10:49 PM | Message # 1 | DMCA |
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A chill has fallen over US/Russia relations in recent weeks; a chill noticed around the world. As the South China Morning Post has put it,
Putin has discovered he can score political points at home “with his
apparent tough stance with an old adversary.”
By the time Edward Snowden was living in the Moscow airport like a Tom
Hanks character, the White House decided that it had to show its own
toughness, and it cancelled a bilateral summit that had been planned to
coincide with the G20 Sherpas’ meeting in St Petersburg in September.
That’ll show those Russkies!
At the same time, though, the White House made it very clear that the
U.S. will still participate in the St Petersburg G20 talks themselves,
September 5-6.
Meanwhile, when I (speaking just for myself now) look at the Big Picture
in the world today, I see the final unraveling of the non-systemic
monetary system with which the world has coped, unsteadily, ever since
Nixon closed the U.S. gold window. Every currency in principle floats
against every other, and since gold is regarded as just a useful raw
material for jewelry, there is no underlying asset.
Yet every nation and its central bankers have figured out that there are
advantages to having your currency be cheaper than the other guys’: and
since it is logically impossible for all currencies to be cheaper than
the others, there is an awakening understanding that this can’t go on.
The post-war relations among China, the U.S., and Russia all have to be
defined in the context of this logical/monetary quandary.
Learning More
To learn more about the interaction of central bankers, shiny metal, and
world markets, I spoke recently to James G. Rickards, the author of
Currency Wars, and a Senior Managing Director of Tangent Capital in New
York.
Rickards has been intimately involved in financial markets for decades.
Among much else, he was general counsel for Long-Term Capital Management
and, in September 1998, principal negotiator of the deal sponsored by
the Federal Reserve Bank of New York for LTCM’s orderly dissolution. I
started with a question about gold. Its price had fallen off a cliff in
April, going from 1550 to below 1400 in a heartbeat. Then it seemed to
stabilize, only to have another sharp fall in June, taking it almost to
1200. Since then there has been some rebound, and it was at 1340 when we
spoke. So I asked in general terms: why?
Read Full Story
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| inbluevt | Date: Thursday, 2013/08/22, 12:11 PM | Message # 2 | DMCA |
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Thanks Tee! I like Rickard a great deal. 
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