Daily Digest

Daily Digest 11/4 - G-20 To Ask IMF To Print Reserve Currency, Gold Vaults Filling Up Fast, How To Join The System D Economy

Friday, November 4, 2011, 9:47 AM
  • G-20 Will Ask IMF To Print Reserve Currency
  • China to Commit on Currency Flexibility: Brainard
  • Chart of the Day: gold vaults filling up fast
  • Gerald Celente talks to Alasdair Macleod
  • MF Bankruptcy Causes Biggest Foreign Bank Liquidity Scramble To 'Fed Safety' Ever, Harbinger Of Major Eurobank Stress
  • Out Of Work? Join The System D Economy
  • Freddie Mac reports loss, seeks $6 billion from taxpayers
  • 24 Hours at Fukushima

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Economy

G-20 Will Ask IMF To Print Reserve Currency (Ben Johnson)

World leaders may mandate the International Monetary Policy to print more of its special currency to help solve the euro zone crisis, according to several people familiar with the matter.

Asking the IMF to print more of its Special Drawing Rights, essentially an IOU that countries can exchange for cash, is one of the ways the Group of 20 industrialized and developing countries is considering supplementing European efforts to stem a debt crisis threatening to spark a global financial meltdown and another recession.

China to Commit on Currency Flexibility: Brainard (pinecarr)

Chinese President Hu Jintao called for reform of the international monetary system to be advanced “in a steady manner,” according to the text of remarks he made to French President Nicolas Sarkozy at the G-20 meeting.

Measures should include changes to “expand the use of” the special drawing rights of the International Monetary Fund, “reform the SDR currency basket and build an international reserve currency system with stable value, rule-based issuance and manageable supply,” Hu said, according to the text distributed to reporters in Cannes.

Chart of the Day: gold vaults filling up fast (ScubaRoo)

It’s to vaults owned by custodians such as HSBC that gold is taken when investors buy shares in physically backed ETFs (exchange traded funds). Bars are also removed when holdings are sold, but recently the traffic has been going decidedly in one direction – as has the value of the ETFs.

Gerald Celente talks to Alasdair Macleod (adam)

They talk about the role of fiat money in creating our economic problems. Gerald Celente explains that he has been looking at gold since the beginning of the bull market, he missed the low of 250$ per ounce by only 25$. They talk about 1987, the bubble of the 1990s and the money printing that caused it. They talk about the lowering of interest rates after 2001. Gerald calls it cheap money: ‘the more you print the cheaper it gets’. He says that digital dollars are not worth the paper that they are not printed on. They talk about the panic of 2008 and how every central bank started printing massively to “keep the Ponzi scheme going”.

MF Bankruptcy Causes Biggest Foreign Bank Liquidity Scramble To 'Fed Safety' Ever, Harbinger Of Major Eurobank Stress (pinecarr)

In the just released H.4.1 update, foreign Reverse Repos with the Fed soared from $81.3 billion to $124.5 billion, the most ever, and a weekly surge of $43.2 billion, the second largest ever, second only to the Lehman collapse.

Out Of Work? Join The System D Economy (Coley H.)

Where are the System D’ers? Turns out they’re everywhere. Next time you’re in a cab, watch your driver. Is he on his cell phone talking in his native tongue? If so, he’s probably part of the System D economy. As I wrote about here, most cabbies (especially immigrants) aren’t simply driving passengers to and fro. They are also on the phone to their contacts in Nigeria negotiating palm oil imports. They are finalizing logistics to ship containers of used clothing from the U.S. to Ethiopia. Some are running nightclubs or restaurants on the side or even negotiating lease arrangements with prospective tenants for the apartment buildings they own (No, I’m not kidding… On my last trip to the states, I talked to a cabbie from Ethiopia who owned 32 apartment units).

Freddie Mac reports loss, seeks $6 billion from taxpayers (Phil F.)

Despite income of $4.6 billion, the company registered a net worth deficit of $6.0 billion, which was partly attributed to a $1.6 billion quarterly dividend payment to the Treasury.

“The weak labor market and fragile economy continue to weigh heavily on the single-family market, causing many potential buyers to sit on the sidelines or opt to rent despite high affordability and record low mortgage rates,” Chief Executive Officer Charles E. Haldeman said in a statement.

Environment

24 Hours at Fukushima (JRB)

A blow-by-blow account of the worst nuclear accident since Chernobyl.

Article suggestions for the Daily Digest can be sent to dd@PeakProsperity.com. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

5 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2813
rjs's picture
rjs
Status: Gold Member (Online)
Joined: Aug 8 2009
Posts: 377
Dept. of Energy Analysis Seriously Flawed
TheOilDrum: New Dept. of Energy Priority-Setting Analysis Seriously Flawed - The US Department of Energy (DOE) recently issued a report called Report on the first Quadrennial Technology Review (QTR), which has as its purpose helping the DOE choose among conflicting priorities. The new report sets priories based on a distorted view of the future. One issue is that it is trying to set priorities based on an overly optimistic view of energy supply presented in the EIA's International Energy Outlook 2011 (IEO 2011). Another issue is that it overlooks the way the US and world economy can be expected to change as a result of lower oil and natural gas supply. A third issue is that its view of climate change mitigations is based on a view of fossil fuel supply that is far greater than is likely to be the case. The DOE needs to re-think its priorities for an entirely different kind of world--a world of energy scarcity. In a world of energy scarcity, citizens are poorer and less able to pay for basic services, much less higher-priced services. Maintaining basic transportation and electrical services for as much of the population as possible needs to be a top priority. Some government agency, presumably the DOE, will need to make certain that rationing systems are set up so that essential industries get the fuel they need and essential workers are able to obtain transportation to work. This change in approach in priority-setting requires a very different mind-set than is currently being promulgated through the press. Let me start by explaining where we are today.

 

mobius's picture
mobius
Status: Silver Member (Offline)
Joined: May 18 2009
Posts: 153
From 0-hedge: CME Goes To Collateral DefCon 1: ....

Hi Folks,

Picked up this Headline from Zero Hedge this morning:

It is critical, because not only is this announcement a direct consequence of what happened with MF Global several days ago, but because also it confirms one of our biggest concerns: systemic liquidity is non-existanet. We confirmed interbank liquidity in Europe was at an all time low earlier today, and can only assume the same is true for US banks. But what is very disturbing is that this is just as true at the exchange level, where it appears the aftermath of the MF collapse is just now being felt. What exactly was the announcement. Unless we are completely reading it incorrectly, it is nothing short of a margin call for tens if not hundreds of billions worth of product. Because as of close of business on November 4, today, the CME just made the maintenance margin, traditionally about 26% lower than the initial margin for specs, equal. For everything. Which means that by close of business Monday, millions of options and futures holders will be forced to deposit billions in additional capital to the CME just so they are not found to be margin deficient, and thus receive a margin call.

www.zerohedge.com/news/cme-goes-margin-defcon-1-makes-maintenance-margin-equal-initial-everything

Yikes. 

nickbert's picture
nickbert
Status: Diamond Member (Offline)
Joined: Jan 14 2009
Posts: 1125
Re: System 'D' economy

The System 'D' article is very descriptive of the environment here in Mongolia's capital city.  And it's not limited to people without conventional jobs either.... most of my wife's family and friends here who have regular jobs (some with professional jobs no less, like geologists and professors/teachers) also have ventures on the side they pursue.  Many people here see the 'regular job' as an intermediate step to success and other things, not an end unto itself.  There is a lot of motivated and independent people here... it's a bit humbling, and I suspect I'm learning more from watching them than they will ever learn from me.  Right now we've got three different projects/plans going on, and while for me it's taking some getting used to switching gears back and forth from one project to another in a given day, for my in-laws it's merely business as usual  .

- Nickbert

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