Goldilocks' Comments and Global Economic News Tuesday Evening 2-6-24
Goldilocks' Comments and Global Economic News Tuesday Evening 2-6-24
Good Evening Dinar Recaps,
“Chinese authorities told state-owned banks to step up intervention in the currency market this week, in a push to prevent a surge in yuan volatility, according to people familiar with the matter.”
In 2023 until now, The People's Bank of China has been manipulating their currency exchange rate more than usual. As the dollar has become more unstable, their State Banks have stepped up to the plate to buy some of their assets from the markets themselves to stabilize the Yuan.
Several tools have been utilized to control their currency fluctuations as of late, and the Exchange Stabilization Fund has been called in to assess the situation and give them supportive direction. "China academic calls for US $1.4 trillion stock stabilisation fund."
As the global wars continue to expand, the volatility of all the Global Markets are beginning to create havoc in the foreign currency exchange markets. Currency interventions like these are common during wartime efforts.
This is why old play books no longer apply when distortions in the market begin to affect economic stability and job creation opportunities.
The BRICS Nations, of which China belongs, sets them apart through a backing of gold to support their local currencies. These efforts adds to the net worth of a country's revenue holdings.
The use of gold to stabilize currency exchange rates and demand bring in greater value in exchange processes between countries.
As Global wars continue to expand, you can expect a rise in volatility inside the Markets and Forex. Old contracts between nations may no longer hold accurate trade values going forward. Look for gold and other Exchange Stabilization Fund interventions to come into play.
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CFR NCUA TheEdgeMalaysia
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There is a good reason why stablecoins were left until last to be regulated. One, you have to have tokenized assets to pay for in using them. And two, you have to provide liquidity for these digital currencies that represent paper currencies inside a country's banking system.
When you back stablecoins by a real world asset such as gold and other commodities, these real values create standardized behaviors in the marketplace the banking system can correlate with economic tools designed to grow them in their liquidity i.e. staking. (See Article Below)
Restaking is a process where you commit your cryptos to aid in the development of a blockchain network. In return, you get a reward for staking and holding this asset in the network. CryptoSlate
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Stablecoin expansion is bringing liquidity to crypto, but JPMorgan warns of challenges ahead
The stablecoin market cap is growing again, which is a good sign for crypto market liquidity, but it hasn't fully recovered and could face regulatory challenges this year, according to JPMorgan. Stablecoins expanded by $60 billion between their May 2022 peak and their October 2023 low of $122 billion.
The top came just before the collapse of the Terra network, which created the contagion that spread to other stablecoins and crypto lenders that year. But as investors anticipated the Securities and Exchange Commission's approval of spot bitcoin ETFs in the U.S., the market expanded by $9 billion between October 2023 and January 2024.
This is generally a "positive sign" for crypto, according to JPMorgan analyst Nikolaos Panigirtzoglou. "Stablecoins link the traditional financial system to the crypto ecosystem and by being the equivalent of 'cash' in the crypto ecosystem are both the 'lubricant' and major source of collateral," Panigirtzoglou said in note Thursday. Stablecoins are cryptocurrencies that have prices pegged to an underlying asset Knowledia News
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What have we been talking about this morning? 😉
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Yellen urges Congress to pass stablecoin regulation in Senate Banking testimony | https://youtu.be/QoLSwJcFAwQ?feature=shared
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LIVE: Treasury Secretary Yellen testifies before the House Financial Services Committee — 2/6/24 | https://www.youtube.com/live/gZ0tziMRaK4?feature=shared
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Vietnam is pushing the US to grant it 'market economy' status.
"A market economy is a type of economic system where supply and demand regulate the economy, rather than government intervention."
A market economy would allow supply and demand to determine the value of the following criteria in their economy:
* degree of currency convertibility
* degree of salary determination by negotiation between employers and employees
* degree of freedom for foreign companies’ investment
* degree of ownership or production methods of enterprises controlled
As you can see, this change would open up a path for new exchange rates in Vietnam. Vietnam has a strong indication that these changes will be made before the next election in the US.
© Goldilocks
Taiwan News World Scientific Hickman Mills
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Stabilization funds do not necessarily have to revolve around large commodity revenue. Such national funds might instead seek to influence currency exchange rates without affecting domestic money supply. Wikipedia
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LONDON (Reuters) - A new report has called for a radical global effort this year to help vulnerable countries fend off financial meltdown and climate change, including widespread debt relief and even a China-led version of the Brady Bond plan.
The report by the Boston University Global Development Policy Center warned that 62 developing economies, including most of Africa and Oceania, are already in a full-blown debt crisis or in immediate need of restructurings.
Last year's surge in world interest rates combined with underwhelming post-pandemic economic recoveries and the costs of climate change mean a near record number of countries now spend at least 20% of their government revenues servicing their debt.
That is widely regarded as unsustainable. US News
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Venezuela: Sanctions Actions and Supporting Democracy - United States Department of State
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One of the most touted benefits of distributed ledger technology (DLT) for securities is atomic settlement. This is the blockchain equivalent of delivery versus payment (DvP) – the securities and cash are exchanged simultaneously, preventing either of the parties from being out of pocket if the other side defaults.
However, it’s also known to impose higher cash or liquidity requirements on the counterparties, eliminating the benefit. A new research paper argues that if settlement is delayed for as little as ten minutes to an hour, with netting it’s possible to achieve most of the benefits of a one or two day settlement window. Ledger Insights
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Today, the Chairman of the House Financial Services Committee, Patrick McHenry (NC-10), and the Chairman of the Financial Institutions and Monetary Policy Subcommittee, Andy Barr (KY-06), sent letters to Federal Reserve Bank of San Francisco President Mary Daly and Federal Reserve Bank of New York President John Williams regarding their banks’ ongoing relationships with opaque and unaccountable global governance organizations, including the Network for Greening the Financial System (NGFS) and Bank of International Settlements (BIS).
The lawmakers are requesting information related to the Federal Reserve (Fed) regional banks’ past work and written agreements with these organizations, which cede authority over U.S. financial regulation while putting our financial system at a competitive disadvantage. Financial Services
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Divergence is when the asset price moves in the direction opposite to what a technical indicator indicates. When a stock is diverging, it signals weaker price trends and the beginning of a reversal. The two types of divergence are: Positive: A positive divergence is a sign of higher price movement in the asset. Corporate Finance Institute Zerohedge Twitter
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👆This happened today. The markets went up, but the technical readings or actual values went down.
© Goldilocks
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More on this tomorrow. I want to see if more warning signals are flashing in the morning.
© Goldilocks
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