Dan Bell's weekly currencies outlook

Currencies

Double Shot Interview: HiFX's Dan Bell reviews the week's currencies turmoil; including European money markets turmoil; NZ$'s drop; weak US growth

19th Aug 11, 7:48pm by Bernard Hickey

Bernard Hickey talks with HiFX Senior Dealer Dan Bell about the week's currencies and markets turmoil, including the growing fears about the European money markets freezing up and the resulting volatility on currency markets.

Bell talks about the problems in the European interbank markets after the failure of a summit in Europe this week.

He looks at the disappointed prospects for a common European bond and ebbing confidence in political leadership in America and Europe.

Bell looks ahead to the August 26 meeting of central bank governors at Jackson Hole in Wyoming on August 26. He talks through the prospects for a fresh round of QE III and looks at very weak Philly Fed figures showing a slump in Mid-Western factory output. Stock markets closed down again on Friday night. The Dow closed down 1.6%.

Dan Bell is the Senior Dealer at HiFX, a UK-headquartered foreign exchange dealer with significant operations in Australia and New Zealand. It has a dealing room in Auckland. See more detail here.

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9 Comments

by Kunst | 19th Aug 11, 11:21pm 1313752883

A national secret or what ?

Again, I like to ask the question, why does our government (RB) not trade with gold – since months (years) a lucrative business to balance our account deficit ?

What are the real gold reserves of New Zealand ? http://en.wikipedia.org/wiki/Gold_reserve

I think we will all remember - Friday the 19^th of August 2011 – the crash of global markets and the beginning of a new period of time for all of us.

by Kunst | 20th Aug 11, 3:36pm 1313811410

A worldwide occurrence: The way the financial markets are troubling and crippling the real economy is frightening. I wouldn’t be surprised countries sliding from recession straight into a depression scenario by 2012.

We need prisons for white collar criminals - at least one/ two here in NZ.

by OMG | 20th Aug 11, 3:50pm 1313812214

Nothing to worry about folks, we're all doomed any way according to the latest "warmie" research. This is where research money is going and its a great comfort to us all!!!

A team of American researchers have produced a range of scenarios in which aliens could attack the earth, and curiously, one revolves around climate change.

They speculate that extraterrestrial environmentalists could be so appalled by our planet-polluting ways that they view us as a threat to the intergalactic ecosystem and decide to destroy us.

The thought-provoking scenario is one of many envisaged in a joint study by Penn State and the NASA Planetary Science Division, entitled "Would Contact with Extraterrestrials Benefit or Harm Humanity? A Scenario Analysis."

It divides projected close encounters into "neutral," those that cause mankind "unintentional harm" and, more worryingly, those in which aliens do us "intentional harm."

Extraterrestrial intelligence (ETI) "could attack and kill us, enslave us, or potentially even eat us. ETI could attack us out of selfishness or out of a more altruistic desire to protect the galaxy from us. We might be a threat to the galaxy just as we are a threat to our home planet," it warns.

One such scenario is the stuff of many a Hollywood blockbuster, a "standard fight-to-win conflict: a war of the worlds." But another might resonate more with fans of Al Gore's documentary film "An Inconvenient truth."

It speculates that aliens, worried we might inflict the damage done to our own planet on others, might "seek to preemptively destroy our civilization in order to protect other civilizations from us."

"Humanity may just now be entering the period in which its rapid civilizational expansion could be detected by an ETI because our expansion is changing the composition of Earth's atmosphere (e.g. via greenhouse gas emissions), which therefore changes the spectral signature of Earth," the study says.

"While it is difficult to estimate the likelihood of this scenario, it should at a minimum give us pause as we evaluate our expansive tendencies."

But before we brace ourselves for alien annihilation, the report suggests things could turn in humanity's favor.

"As we continue the search for extraterrestrials into the future, perhaps our thinking about the different modes of contact will help human civilization to avoid collapse and achieve long-term survival," it suggests.

Nope it ain't just Fox News - this is all over the web.

by Kunst | 20th Aug 11, 4:19pm 1313813954

OMG - that “tittle- tattle cannot be the result from an early “Saturday booze” only.

by OMG | 20th Aug 11, 4:50pm 1313815835

Nope, not tittle tattle, straight off the google news home page, with 68 very sober links. BTW I don't drink, if that's what you're implying.

by Kunst | 20th Aug 11, 8:50pm 1313830257

Sorry not you - but some of the the 68 links drink.

by Gummy Bear Hero | 20th Aug 11, 4:55pm 1313816102

OMG : Of course those scenarios assume that the extra-terrestrials meet our emissions legislation and targets . All aliens will be border checked prior to entry to the stratosphere by an officious little man with a clip-board , an emissions safety legislation handbook , and an emission testing device .

..... only those war-mongering extra-terrestrials who respect our need to control global warming will be allowed to actually land on planet earth , and to exterminate mankind .

[ .. it's the good folk over at NASA who appear to be imbibing more than their fair share of mind-altering ethanol alcohol fluids .. ]

by OMG | 20th Aug 11, 8:06pm 1313827612

GBH, that is very funny. But not funny for those who bought into the lemonade stand franchise hoping to cash in on the the hoards - 50 million strong - of climate change refugees predicted by the UN in 2005, who would be staggering along, aflame with thirst, 18 months ago in 2010.

PDK and K****T ( I do have trouble with that screen name and fear a freudian or dyslexic lapse ) are no doubt demanding their money back. Has Steven been shooting them as they come grunting and itching up our beaches???

http://asiancorrespondent.com/52189/what-happened-to-the-climate-refugees/

by Nicholas Arrand | 20th Aug 11, 5:30pm 1313818254

"The Deflationary M2 Explosion" ..."So contrary to monetarist theory, the M2 explosion seems more closely related to a deflation/recession risk.....The recent growth of M2 surpasses even the explosive safe-haven demand for money that accompanied 9/11 and the financial crisis of late 2008. Something big is going on, and it can only be the financial panic that is sweeping Europe as money flees a banking system that is loaded to the gills with .... debt."

"In the past 5 years these are the loss numbers for financials, as taken at noon, August 19 2011:

Bank of America -87%; Citibank -95%; Societe Generale -84%; Barclays Bank -77%. the Dow and the S&P in the same time period ~ 4% & 13%."