A bounce in crude oil and other commodity prices Tuesday halted a plunge in currencies of countries linked to natural-resource exports. The respite will be short-lived, according to OppenheimerFunds Inc.
The Canadian, Australian and New Zealand dollars are off to the worst start to a year since the financial crisis. The nations are grappling with a 29 percent drop in raw-material prices amid swelling supplies and slowing demand in China that may wipe out as much as 14 percent of the Canadian dollar’s value in the next three years.
Next up, they’ll have to contend with the Federal Reserve’s plan to raise interest rates this year, which is forecast to boost the U.S. dollar.
“Compared to the U.S. talk about raising rates and tightening policy, the commodity currencies are going in the exact opposite direction,” Alessio de Longis, a money manager in the Global Multi-Asset Group at OppenheimerFunds, said from New York. “These currencies are not cheap by any means.”
De Longis, whose company manages $233 billion, projected the Canadian dollar will weaken 14 percent in the next one to three years. He estimated the Aussie will fall in the same timeframe to 60 cents per U.S. dollar and the kiwi to drop to 50 cents.
The Canadian dollar weakened 0.2 percent Thursday to an 11-year low while the kiwi lost 0.5 percent.
Even as the Reserve Bank of Australia held interest rates steady and spurred a currency bounce, de Longis said he expects central banks in the commodity-exporting nations to continue easing monetary policy, sending their currencies tumbling versus the greenback.
The Bloomberg Commodity Index fell to a 13-year low Monday after Chinese manufacturing gauges slowed, clouding the outlook for demand. In contrast, the U.S. currency has rallied against all 16 major peers in the past 12 months on signs that the Fed is getting closer to raising rates.
“Caution is still in order as today’s Aussie gains are corrective in nature,” Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co., said in a note. “It is obvious that RBA policy must remain accommodative.”
marko on Sat, 8th Aug 2015 10:55 am
I can not believe that anybody can sell physical goods for toilet paper ( dollars )it is unbelievable . Us draining the world with their printing presses
Davy on Sat, 8th Aug 2015 11:36 am
Marko, will you enlighten me to currencies and how there are good ones and bad ones. Sounds like you need to research the subject some more. I know people lack an understanding when they include toilet paper in the discussion of currencies. Marko it is all one big ponzi that we can’t get out of because we have to live. When money as we know it ends so will life as we know it. It is as simple as that.
BobInget on Sat, 8th Aug 2015 1:16 pm
Lower valued currencies are great for exporters.
Canadian oil companies get paid in USD’s.
Good.
Canadian businesses buying raw materials in the US are screwed. Better to buy goods in Australia or New Zealand, China etc.
We can joke about Canadians buying on Amazon paying 25% more. But, how does the US fair?
penury on Sat, 8th Aug 2015 1:43 pm
As with all U.S. based propaganda, there is truth contained in the writing, however reading between the lines the author is implying that the U.S. dollar will remain the dominant currency of the world and the rest of the world will continue to use the U.S. dollar for trade. Perhaps he is correct. But there is a contrarian view which holds that the ship is about to hit the sand and things could change suddenly and violently. A policy of ‘begger thy neighbor” might work, or maybe payback will be painful.
marko on Sat, 8th Aug 2015 2:42 pm
Davy I know they are all fiat money, I dont know the solution, perhaps barter , gold( i know there is nt enough).but I know one thing they are clever because they have printing presses ( all goverments)and we who work 8hpd are all stupid. I am really angry, I can not wait to see them working. It is enough.
marko on Sat, 8th Aug 2015 2:44 pm
but on the other hand we as a specie have deserved this
marko on Sat, 8th Aug 2015 2:53 pm
I don’t understand how this poncy scheme is still holding. Could you please try to explain me
apneaman on Sat, 8th Aug 2015 3:52 pm
Is Robert Reich Insane?
“Reich believes the Fed should not raise interest rates because keeping rates at the zero-bound is creating jobs and propping up wages. And in so far as inflation is non-existent, there is no reason to raise rates.
After 7 years at the zero-bound, the job market is still very weak and wages are going nowhere. If you think the unemployment rate (5.3%) is a positive indicator, check out the labor force participation rate (62.6%, a 38-year low).
If that’s not Epic Failure, I don’t know what is.
And what is Reich’s response to Epic Failure? More of the same! Because it hasn’t worked yet!”
http://www.declineoftheempire.com/2015/08/is-robert-reich-insane.html#more
BobInget on Sat, 8th Aug 2015 4:52 pm
Good pun Marko. (specie)
Apneaman, No I don’t believe Reich is nuts.
At the onset of the Obama Administration Republicans sacrificed the good of the nation by vowing to kill ANY programs Obama put forward. In almost every speech the President proposed jobs for blue-collar teachers to cops to construction workers to rebuild and repair
crumbling infrastructure.
In no particular order;
Dreamer program.. killed
Insurance company reform.. Passed
(voted 51 times to roll back ‘ObamaCare’).
Government Shutdowns
““Man, did that politics of obstruction work like a charm! … James Inhofe says that if the GOP takes back the Senate in 2014, Obama could be impeached.” “.
(Inhofe is the Climate Change hoax guy)
Newly Elected Republican Senators Sign Pledge to Eliminate Food Stamp Program in 2015
Republicans are vowing to go to war rather then
sign on to Iran nuclear deal that took four years to construct.
Republicans will try to kill any carbon control acts. Not a single one, House or Senate, will admit climate change is human caused.
Republicans and gun control. What else is there to say?
Republicans vow to kill Roe V Wade
Defund Planned Parenthood
Jam Highway bills.
Increase ‘defense’ spending
Pass voter suppression bills on every state.
Do Away with Social Security, in ten years.
I could go on. It’s unfair, IMO, to stick Obama with any slow recovery label.
apneaman on Sat, 8th Aug 2015 5:17 pm
I did not see the piece as blaming Obama. In fact, he is not even mentioned, so I don’t know where you get that from. I think Dave made his points crystal “our economic system is well and truly fucked.” and “Western economies, supposedly the biggest and best economies, have become a joke. The economic theories Reich’s views rest upon (e.g., the Fed’s dual mandate) are bankrupt. The old phrase “extend and pretend” is no longer appropriate at this late stage. I don’t know what to call what we have now, but it ain’t good.”
All I can say is that I concur. The system is fucked beyond reform and the longer it continues the greater the pain will be. What more evidence does anyone need that it’s a complete fucking joke than to see one of the highest of the high priests of Econ 101 resorting to a carton to explain it to the flock? I guess the spin Dr’s figured they better use the medium the majority are most informed by.
penury on Sat, 8th Aug 2015 5:58 pm
Cuma se Cuma sa you say potato and I say they are all alike none of them worth sh .
Davy on Sat, 8th Aug 2015 8:22 pm
Marko, Ponzi schemes are until they ain’t. They typify unstable, unsustainable, and finite growth. In our case as a global human system it is a system that has extended far beyond its stable equilibrium expanding without a foundation. It is a system that is developing as if it where rich when it is broke hence the wealth transfer, exploitation of the commons, and a decaying society. We are living as if we have a future when there is no future.
There is the mama ponzi of modern industrial man based on unsustainable global growth based economics. There are the many baby ponzis inside the mama Ponzi. These baby Ponzis resembling the movie “Alien” where healthy bodies are consumed from the inside and departed in a horrendous exit in search of new prey. https://www.youtube.com/watch?v=LsD6AL3HJtM
Makati1 on Sat, 8th Aug 2015 9:31 pm
There has been a 3% drop in the Philippine Peso value vs USD in the last year. Not bad. But then, the Ps doesn’t export many resources, just goods and services.
The end times are coming for the Charmin USD. The fed doesn’t dare raise interest rates or the last card supporting the whole mess will tumble. But, to do BAU for much longer is also going to topple the same mess, maybe a bit slower. We shall see.
Boat on Sat, 8th Aug 2015 9:44 pm
apneaman,
Is Robert Reich Insane?
why are wages weak? Think immigration. It is much better to have a shortage of workers than to many. Since the crash of 2009 the US has added 12 million workers when there has been higher than average unemployment. Lots of people are supporting insane policy. The Dem’s, big business, the farmers, all those people who will do the work that other people work yet still can’t pay for healthcare of for their own children’s education. I try not to cast blame but change is needed.
apneaman on Sat, 8th Aug 2015 11:26 pm
Boat, that is a monumental over simplification. Too much immigration is a problem for the low skilled native born worker, but it’s practically orgasmic for the 1%er’s. The question is, is why are there so many unskilled native born people in the richest country in the history of the world,including millions of middle class white kids. Who we blaming that on?
https://www.youtube.com/watch?v=Z_iBOEDb7PM
apneaman on Sat, 8th Aug 2015 11:44 pm
Hey boat, never heard anyone bitching about these immigrants did ya? Even put Nazi and SS colonel, Wernher Von Braun on the cover of TIME magazine as a genuine god damn American hero.
Operation Nazification – U.S. Military Hired Sixteen Hundred Nazi Scientists and Doctors
Book Review: Annie Jacobsen – Operation Paperclip: The Secret Intelligence Program That Brought Nazi Scientists to America
“After World War II, the U.S. military hired sixteen hundred former Nazi scientists and doctors, including some of Adolf Hitler’s closest collaborators, including men responsible for murder, slavery, and human experimentation, including men convicted of war crimes, men acquitted of war crimes, and men who never stood trial. Some of the Nazis tried at Nuremberg had already been working for the U.S. in either Germany or the U.S. prior to the trials. Some were protected from their past by the U.S. government for years, as they lived and worked in Boston Harbor, Long Island, Maryland, Ohio, Texas, Alabama, and elsewhere, or were flown by the U.S. government to Argentina to protect them from prosecution. Some trial transcripts were classified in their entirety to avoid exposing the pasts of important U.S. scientists. Some of the Nazis brought over were frauds who had passed themselves off as scientists, some of whom subsequently learned their fields while working for the U.S. military.”
http://www.globalresearch.ca/operation-nazification-u-s-military-hired-sixteen-hundred-nazi-scientists-and-doctors/5369981
Boat on Sun, 9th Aug 2015 12:00 am
Apey,
Ya know the largest immigrant population in the US is german don’t you. Imagine that. Where did they settle? In some of the reddest states. And the US fed their own soldiers acid. Did you know at one time women couldn’t vote? We have so much to atone for. Not. My generation isn’t doing much better leaving the nation in debt, polluted and is still making many wrong decisions. But hey, were human, what did you expect.
marko on Sun, 9th Aug 2015 12:56 am
Davy,
Thank you on your answer . It was stupid from me to ask 1bilion $ question or better 10tons of gold hahahahah
q on Sun, 9th Aug 2015 3:01 am
Not subtle propaganda. At least ten similar articles on Bloomberg a day 🙂
Makati1 on Sun, 9th Aug 2015 3:58 am
Boat: Ancestry by nationality in the US today. Highest to the lowest. (2000 Census but if anything, Germans have moved farther down the scale, along with most of European ancestry.)
Afro-American
Aleut/Eskimo
American
American Indian
Dutch
English
Finnish
French
German
Hispanic/Spanish
Irish
Italian
Mexican
Norwegian
Puerto Rican
Other
https://en.wikipedia.org/wiki/File:Census-2000-Data-Top-US-Ancestries-by-County.svg
BTW: I’m of German origin since 1734, by way of Austria.
Davy on Sun, 9th Aug 2015 6:31 am
Mak, does poor homework as usual. You don’t get get good numbers from asking people what their ancestory is. You do it from historical research on immigration. Try again Mak.
peakyeast on Sun, 9th Aug 2015 7:39 am
@Davy: Hey – toilet paper has its own corporate power and is possibly more powerful than many nations given the popularity and acceptance of their product(s).
Fiat money is only backed by the promise of violence today.. Toiletpaper is backed by… toilet paper (physical assert) – and probably also the promise of violence if someone tries to stop the sale of toilet paper that be nation or worldwide…
😀
Davy on Sun, 9th Aug 2015 10:07 am
Peaky, if you are sophisticated like me you opt for wet ones. Toilet paper is for the masses. I have been know to use oak leafs in a pinch if I am out on the farm so it isn’t like I am not flexible.
Peaky, your description of the economics of currencies and toilet paper is spot on.
Boat on Sun, 9th Aug 2015 1:07 pm
Davy, Lol
Only you could think of something you wipe with as sophisticated. Language distortion at it’s finest.
Davy on Sun, 9th Aug 2015 1:35 pm
Caught you Boat. You couldn’t resist my bait. Poop must turn you on. Anyway I wipe with what is available and usually that is standard issue t-paper.
MrNoItAll on Sun, 9th Aug 2015 2:15 pm
China, the great hope for all mankind (and the excessive consumption economic model that mankind’s fate currently depends on):
“The number of labor protests and strikes tracked on the mainland by China Labour Bulletin, a Hong Kong-based watchdog, more than doubled in the April-June quarter from a year earlier, partly fueled by factory closures and wage arrears in the manufacturing sector. The group logged 568 strikes and worker protests in the second quarter, raising this year’s tally to 1,218 incidents as of June, compared with 1,379 incidents recorded for all of last year.”
China has been doing a great job of keeping the lid on the bubbling pot of discontent and anger that has been brewing. All TPTB combined have their hands interlocked, chanting in unison to the gods of capitalistic overconsumption, praying fervently in one fevered pitch to deliver them from the wrath of the “little people” upon which they have feasted for all these many years. But it won’t help. The gig is just about up. When China blows, and it will, the shock waves will blast away the grand illusion of all is well. We are on the brink.
http://wolfstreet.com/2015/08/09/chinas-hard-landing-gets-rougher/
Davy on Sun, 9th Aug 2015 4:05 pm
AND Mak thinks it’s bad in the U.S. Thanks MR! nothing like some balance.
apneaman on Sun, 9th Aug 2015 7:00 pm
Plummeting Oil Price: the near- prophetic words of Sheikh Yamani
http://www.asiantribune.com/node/87610
shortonoil on Sun, 9th Aug 2015 7:53 pm
The world is now in a deflationary spiral from which there is no escape:
http://www.thehillsgroup.org/depletion2_022.htm
The richest nation will be the last man standing! The rest will have fallen into chaos.
Davy on Sun, 9th Aug 2015 8:05 pm
Short, China was the trigger event. It is down hill here on out. There is no way China can recover. We know the U.S. & Europe never really recovered. Who else is there. EM countries will have to sit on their commodities and debt. Russia is a basket case. The rest of the Brics are a mess.
Once the momentum is down no amount of financial games will stop it. The system itself will be cycling down along with the human nature element. Once the human confidence variable is lost it adios. My big wonder is how long and how hard will this descent be.
Tom S on Sun, 9th Aug 2015 9:30 pm
Mak:
“Ancestry by nationality in the US today. Highest to the lowest… Afro-American… Aleut/Eskimo…”
You misread that graph. Those entries are in alphabetical order.
-Tom S
Rodster on Mon, 10th Aug 2015 11:29 am
“China, the great hope for all mankind (and the excessive consumption economic model that mankind’s fate currently depends on):”
China is no different than the Western Banksters. In fact their actions prove they are much worse. Trust China at your own peril.
Davy on Mon, 10th Aug 2015 11:34 am
Rod, we are all tied up in this together. The China project was a global project of greedy hairless apes that has gone horribly wrong.