First time in nearly a decade BRICS set to expand


Important Takeaways:

  • BRICS Begins Major Expansion to Undermine U.S.
  • For the first time in nearly a decade, BRICS – the bloc of nations led by Brazil, Russia, India, China and South Africa – will expand, with Saudi Arabia and the United Arab Emirates (UAE) receiving formal invites, as well as Argentina, Egypt, Ethiopia, and Iran set to join in a year.
  • One of the top priorities of the BRICS nations has been to end the U.S. dollar’s global financial dominance. As the global reserve currency, the U.S. dollar is a key tool used by the United States government to maintain its global hegemonic status.

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If US Dollar loses Global Reserve Currency status there would be a complete implosion of the Global System

End of US Dollar

Revelations 18:9-11 “The kings of the earth who committed fornication and lived luxuriously with her will weep and lament for her, when they see the smoke of her burning, 10 standing at a distance for fear of her torment, saying, ‘Alas, alas, that great city Babylon, that mighty city! For in one hour your judgment has come.’ 11 “And the merchants of the earth will weep and mourn over her, for no one buys their merchandise anymore

Important Takeaways:

  • Former Treasury Official Warns of Complete Economic Implosion if US Dollar Loses Global Reserve Currency Status
  • Former Assistant Secretary for Public Affairs for the U.S. Department of the Treasury Monica Crowley has warned of “catastrophic” consequences if the U.S. dollar loses its status as the world’s reserve currency. “That would mean the end of the U.S. dollar,” she said, predicting that “there would be a complete implosion of the global economic system.”
  • Crowley explained that since the end of World War II, the dollar has been considered a safe haven. Initially, it was backed by gold, but after President Nixon took the U.S. off the gold standard, there has been no hard asset backing the dollar for the last 50 years. Instead, it has been backed by “the strength and economic power” of the U.S., she said.
  • The former Treasury official added that another important factor is “the fact that oil has always been traded in dollars,” warning:
  • If that were to end, that would mean the end of the U.S. dollar.
  • Crowley continued: “On top of that, now you do have this perfect storm of Biden’s weakness, his war on American domestic energy production, the Ukraine war … Because of all of these things, we’ve got America’s enemies, led by China, forming a new economic bloc.”

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Russia goes to Gold Standard to avoid Sanctions

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Russia sets fixed gold price as it restarts official bullion purchases
  • Starting this week, the Russian central bank will pay a fixed price of 5,000 rubles ($52) per gram between March 28 and June 30, the bank said on Friday. This is below the current market value of around $68.
  • Gainesville Coins precious metals expert Everett Millman told Kitco News “Setting a fixed price for rubles per gram of gold seems to be the intention. That’s pretty important when it comes to how Russia could seek funding and manage its central bank financing outside of the U.S. dollar system.”
  • Gold is one of the most logical international currencies to use when you are trying to get around sanctions, Millman added.
  • Last week, the U.S. Treasury banned all gold transactions with Russia’s central bank.

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Trump, Powell met Monday at White House to discuss economy

By Howard Schneider

WASHINGTON (Reuters) – U.S. President Donald Trump and Federal Reserve Chair Jerome Powell met at the White House on Monday morning, their second meeting since Powell started the job in February 2017 and soon after became the target of frequent criticism from the president who had appointed him.

The Fed announced the meeting in a morning press release, noting they met “to discuss the economy, growth, employment and inflation.”

“Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.,” Trump tweeted soon after, calling the session “good & cordial.”

The Fed’s wording closely followed its description of Powell’s first meeting with Trump, this past February, over a dinner that also included Vice Chair Richard Clarida.

Trump’s tweet marked a change in tone. The president in recent months derided Powell and colleagues as “pathetic” and “boneheads” for not cutting interest rates, and in August labeled Powell personally as an enemy of the United States on a par with China leader Xi Jinping.

The Fed in its statement was careful to note what wasn’t discussed: Powell’s expectations for future monetary policy. Trump has for more than a year charged the Fed with undermining his economic policies by, in his view, keeping interest rates too high, and depriving the United States of what Trump feels are the benefits of the negative rates of interest set by the European and Japanese central banks.

The U.S. central bank has cut rates three times this year – in part to offset what it views as damage done by the Trump administration’s trade war with China. But after their last meeting, in October, policymakers signaled they would lower rates no further unless the economy takes a serious turn for the worse.

Less than 24 hours after that decision, Trump laid into Powell again, saying people are “VERY disappointed” in him and the Fed. And only last week, Trump lobbed another dig in a tweet that noted inflation was low: “(do you hear that Powell?)”


Powell “did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming information that bears on the outlook for the economy,” the Fed said in its statement.

Powell appeared before congressional committees twice last week, and the Fed said his comments to Trump were “consistent” with his statements to lawmakers.

“Chair Powell said that he and his colleagues on the Federal Open Market Committee will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis.”

The meeting included Treasury Secretary Steven Mnuchin.

Powell met with Trump in February, and in each of the three following months the two had a brief phone conversation. That compares with the three times his predecessor, Janet Yellen, met President Barack Obama at the White House; Yellen also met with Trump during her final year as Fed chair.

Powell’s has made much more extensive and deliberate efforts to court members of the House and Senate, even as Trump expressed regret for appointing Powell and reportedly explored whether he could remove him.

Fed chairs are appointed to four-year terms by the president, but once confirmed by the Senate are intended to be insulated from White House political pressure over how to manage monetary policy. They can only be removed “for cause,” not over a disagreement over policy.

Meetings between Fed chairs and presidents are not unprecedented but they are infrequent, as opposed to the nearly weekly sessions that central bankers have with the head of the Treasury.

(Reporting by Howard Schneider and Ann Saphir; Editing by Andrea Ricci)

Erdogan vows action against ‘economic terrorists’ over lira plunge

Turkey's President Tayyip Erdogan addresses Turkish Ambassadors during a meeting in Ankara, Turkey August 13, 2018. Kayhan Ozer/Presidential Palace/Handout via REUTERS

By Tuvan Gumrukcu

ANKARA (Reuters) – President Tayyip Erdogan on Monday accused “economic terrorists” of plotting to harm Turkey by spreading false reports and said they would face the full force of the law, as authorities launched investigations of those suspected of involvement.

The lira currency, which has lost more than 40 percent against the U.S. dollar this year, pulled back from a record low of 7.24 earlier on Monday after the central bank pledged to provide liquidity, but it remained under selling pressure and its meltdown continued to rattle global markets.

“There are economic terrorists on social media,” Erdogan told a gathering of Turkish ambassadors at the presidential palace in Ankara, adding that the judiciary and financial authorities were taking action in response.

“They are truly a network of treason,” he added. “We will not give them the time of day… We will make those spreading speculations pay the necessary price”.

Erdogan, who gained sweeping new powers following his re-election in June, said rumors had been spread that authorities might impose capital controls in response to the slump in the currency, which tumbled as much as 18 percent on Friday alone.

The interior ministry said it had so far identified 346 social media accounts carrying posts about the exchange rate that it said created a negative perception of the economy. It said it would take legal measures against them but did not say what these would be.

Separately, the Istanbul and Ankara prosecutor’s offices launched investigations into individuals suspected of being involved in actions that threaten Turkey’s economic security, broadcaster CNN Turk and state news agency Anadolu reported.

Turkey’s Capital Markets Board (SPK) and financial crime board have also said they would take legal steps against those who spread misinformation about financial institutions and firms, or reports that the government would seize foreign-currency deposits.

Earlier on Monday, Finance Minister Berat Albayrak, who is also Erdogan’s son-in-law, said Turkey would start rolling out an economic action plan on Monday.

Albayrak stressed the importance of budget discipline and ruled out any seizure or conversion of dollar-denominated bank deposits into lira.

Economists say the lira’s fall is due to worries about Erdogan’s influence over the economy, his repeated calls for lower interest rates, and worsening ties with the United States over the detention of a Christian pastor and other disputes.

Erdogan reiterated on Monday his view that the currency’s crash had no economic basis, saying that U.S. sanctions imposed on Turkey over the terrorism trial of the pastor, Andrew Brunson, represented a “stab in the back” by a NATO ally.

The lira stood at 6.89 against the U.S. dollar at 1511 GMT – after Erdogan’s comments – up from a record low of 7.24 to the dollar reached in early Monday trade.

(Additional reporting by Ali Kucukgocmen; Editing by Dominic Evans and Gareth Jones)

U.S. inflation pressures rise in July; Fed on track to lift rates

FILE PHOTO: A woman shops with her daughter at a Walmart Supercenter in Rogers, Arkansas, U.S., June 6, 2013. REUTERS/Rick Wilking/File Phot

By Lindsay Dunsmuir

WASHINGTON (Reuters) – U.S. consumer prices rose in July and the underlying trend continued to strengthen, pointing to a steady increase in inflation pressures that keeps the Federal Reserve on track to gradually raise interest rates.

The Labor Department said on Friday its Consumer Price Index advanced 0.2 percent, the bulk of which was due to a rise in the cost of shelter, driven by higher rents. The CPI rose 0.1 percent in June.

In the 12 months through July, the CPI increased 2.9 percent, matching the increase in June.

Excluding the volatile food and energy components, the CPI rose 0.2 percent, the same gain as in May and June. The annual increase in the so-called core CPI was 2.4 percent, the largest rise since September 2008, from 2.3 percent in June.

Economists polled by Reuters had forecast both the CPI and core CPI rising 0.2 percent in July.

U.S. Treasury yields held near three-week lows and U.S. stocks fell on anxiety about Turkey’s financial woes and its deepening rift with the United States. The U.S. dollar was trading higher against a basket of currencies.

“As the July CPI figures make clear, underlying price pressures are still mounting,” said Michael Pearce, senior U.S. economist at Capital Economics in New York.

The Fed more closely tracks a different inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, which increased 1.9 percent in June.

That gauge hit the U.S. central bank’s 2 percent target in March for the first time in more than six years and Fed policymakers have said they will not be unduly concerned if it overshoots its target in the coming months.

The U.S. central bank has raised rates twice this year, in March and June, and financial markets overwhelmingly expect a hike at the next policy meeting in September.

The Fed currently forecasts a total of four rate rises in 2018, with investors expecting a final nudge upwards of the year in the benchmark overnight lending rate in December.

Inflation pressures are seen continuing to build amid low unemployment and increasing difficulty reported by employers in filling positions. Rising raw material costs are also expected to push up inflation as manufacturers pay more, in part because of tariffs imposed by the Trump administration on lumber, aluminum and steel imports.

Last month, gasoline prices fell 0.6 percent after increasing 0.5 percent in June. Food prices edged up 0.1 percent after rising 0.2 percent in June.

Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, advanced 0.3 percent last month after increasing by the same margin in June. Overall, the so-called shelter index rose 3.5 percent in the 12 months through July.

Healthcare costs fell 0.2 percent after gaining 0.4 percent in June. Prices for new motor vehicles rose 0.3 percent in July following a 0.4 percent increase in the prior month. Apparel prices were down 0.3 percent after a 0.9 percent drop in June.

(Reporting by Lindsay Dunsmuir; Editing by Paul Simao)

Dollar down vs. sterling, euro on bets Britain votes ‘Remain’

British Pound Sterling banknotes

By Dion Rabouin

NEW YORK (Reuters) – Sterling hit its highest level of the year against the dollar on Thursday after opinion polls in recent days favored Britain staying in the European Union and bookmakers’ odds indicated a further shift toward the “Remain” camp.

The British pound and the euro were off their highs in late trading, but held onto gains against the greenback and Japanese yen as voters in the United Kingdom took to the polls to decide whether they would exit the EU.

An Ipsos MORI poll for the Evening Standard carried out on Tuesday and Wednesday, as well as an online Populus poll, showed over 50 percent support for staying in the EU.

Earlier polls by ComRes and by YouGov also showed a last-minute rise in support for remaining.

In addition to the murder of pro-EU British lawmaker Jo Cox last week, the increasing likelihood of a “Remain” vote was largely the result of campaigns by British and international politicians, including U.S. President Barack Obama, who lobbied Britons to stay, said Juan Perez, currency strategist at Tempus Inc in Washington.

“Even though 9-10 percent of those surveyed are undecided and that’s where things are hanging in the balance, it seems like there is a majority for remain,” Perez said.

Sterling <GBP=> rose to $1.4946, its highest against the dollar since Dec. 31, in early trading. The pound was last up 1.05 percent at $1.4852.

The euro <EUR=> touched a six-week high of $1.1421 against the dollar, also on the back of increased odds that Britain will remain in the 28-member European bloc. The currency was last up 0.5 percent at $1.1349.

Both the euro and pound also rose against the safe-haven yen, which took a beating as traders favored riskier assets. The euro <EURJPY=> was last up 1.8 percent against the Japanese currency, moving to 120.01 yen. Sterling <GBPJPY=> added 2.2 percent to 156.91 yen.

Analysts said the big moves in sterling and the euro were the result of bets from large institutions that had hired top polling firms to measure sentiment ahead of Thursday’s referendum.

The dollar hit its highest level against the yen <JPY=> in more than a week on Thursday. It was last up 1.4 percent at 105.80 yen.

Voting in the British referendum will end at 5:00 p.m. EST, with results expected early on Friday.

(Reporting by Dion Rabouin; Editing by Lisa Von Ahn and Andrew Hay)

Yen falls vs dollar for second day to near two-week low

Japanese Yen Notes

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – The yen slid to a nearly two-week low against the dollar on Tuesday as risk appetite improved for a second straight session, undermining traditional safe havens such as the Japanese currency.

Repeated verbal warnings from Japan over the weekend and on Tuesday saying it was prepared to step in to weaken the currency has also held off investors seeking to buy the yen at the expense of the dollar. The greenback has struggled recently as the Federal Reserve is on track to raise U.S. interest rates gradually.

“Risk appetite is naturally tied to the belief that we’re in an ultra-low-yield environment and investment managers can’t simply sit here,” said Jeremy Cook, chief economist at payments company World First in London.

“We have to see a move any time we see the slightest bit of positivity, by grabbing yield in emerging markets currencies, for instance.”

Global stock markets were on the upswing overall led by European and Wall Street shares, adding to the positive risk sentiment. [MKTS/GLOB]

In late morning trading, the dollar rose 0.7 percent to 109.11 yen, after hitting a roughly two-week peak of 109.27 <JPY=>. The U.S. currency tumbled to an 18-month low of 105.55 yen last week after the Bank of Japan stood pat on monetary policy.

Finance Minister Taro Aso said on Monday Tokyo was ready to intervene to weaken the currency if moves were volatile enough to hurt the country’s trade and economy. He reiterated that message on Tuesday.

A key economic adviser to Prime Minister Shinzo Abe, Koichi Hamada, also said on Tuesday Japan would intervene in currency markets if the yen rose to between 90 and 95 per dollar.

“There’s definitely the possibility of intervention,” said World First’s Cook. “But I don’t think this will turn the market around. It will be more of a stop-gap measure.”

He added that the only thing that could reverse the yen’s recent strength is fiscal and monetary policy action and any change could happen as early as June.

Meanwhile, speculators were cutting favorable bets on the yen, having piled into the currency in the past few weeks. [IMM/FX]

In other currencies, the euro rose 0.8 percent to a near two-week high of 124.38 yen <EURJPY=>, pulling away from a three-year trough of 121.48 plumbed late last week.

The euro was flat against the dollar at $1.1388 <EUR=>. The dollar index <.DXY> was at 94.171, having hit its highest in nearly two weeks earlier and extending its rise from a 15-month trough struck on May 3.

(Reporting by Gertrude Chavez-Dreyfuss in New York; Additional reporting by Anirban Nag in London; Editing by James Dalgleish)

Dollar drops to eight-month low as commodity currencies climb

Dollar Bills

By Jemima Kelly

LONDON (Reuters) – The dollar fell to its weakest since late August against a basket of currencies on Tuesday, while commodity-linked currencies climbed, as a rise in oil prices whetted investors’ appetite for riskier assets across financial markets.

The greenback has been subject to a heavy sell-off over the past month, losing 5 percent <.DXY> as investors have pushed back their expectations for when the Federal Reserve will raise U.S. interest rates after Chair Janet Yellen threw into doubt the view there could be two hikes this year.

Fed funds futures <0#FF:> imply barely one quarter point increase for the whole of 2016, with only about a 20 percent chance of a hike in June priced in.

The dollar index <.DXY>, which measures the greenback against a basket of six major currencies, fell to as low as 93.627.

With a rise in commodity prices and rallying global stocks boosting investors’ assets for riskier assets, commodity-linked currencies such as the Australian dollar <AUD=D4> and Norwegian crown <NOK=> gained strongly against their U.S. counterpart, further bruising the greenback.

“It appears that for now, markets are turning their noses up at the prospect that more gloomy earnings that might trigger some more negative risk sentiment,” said Rabobank currency strategist Jane Foley in London, adding that the dollar’s sell-off looked a little “overdone”.

Against the safe-haven yen, though, the dollar strengthened 0.3 percent, having hit a 1-1/2-year low of 107.63 yen <JPY=D4> on Monday. The yen had its strongest start to a year since 2008 in the first quarter <JPY=> as shaky global markets boosted demand for the traditional safe-haven currency.

Those gains prompted Japanese officials to warn on Monday that the yen moves were “one-sided and speculative” and that the government stood ready to intervene to weaken the currency.

But with oil prices hitting a 2016 high above $43 per barrel on Tuesday and risk appetite on the rise, the yen needed no such intervention to drive it lower. [O/R]

“(Higher) oil prices … have got the dollar on the back foot, more than anything else, so we have the yen and the dollar at the bottom, and everything else at the top,” said Kit Juckes, macro strategist at Societe Generale in London.

“I think dollar/yen will get back to 120 at some point – we might want to sell it again there, but I think this move is way overdone,” he added.

As the dollar sold off, the euro touched a six-month high of $1.1465 <EUR=>.

(Additional reporting by Ian Chua in Sydney and Hideyuki Sano in Tokyo; Editing by Andrew Heavens)

U.S. Dollar Hits 17 Month Low

A U.S. one-hundred dollar bill (C) and Japanese 10,000 yen notes are spread in Tokyo

By Sam Forgione

NEW YORK (Reuters) – The U.S. dollar hit a 17-month low against the safe-haven yen on Tuesday on investor concerns about global economic growth, while the euro was set to post its first daily loss against the dollar in more than a week on soft European economic data.

The dollar extended its losses against the yen to 8.2 percent for the year, with a downturn in stocks and commodity prices fueling the latest rally in the Japanese currency. The dollar hit 110.27 yen, its lowest level since late October 2014.

The dollar was last down 0.71 percent against the yen &lt;JPY=&gt; at 110.52 yen in late morning U.S. trading. The dollar had weakened against the yen in recent sessions in the aftermath of Federal Reserve Chair Janet Yellen’s dovish comments last week.

“The market is maybe giving up a little bit on the global growth story,” said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Limited in New York.

Traders cited huge options barriers at 110 yen, however, that could slow the greenback’s drop in the short term.

Investors were cautious about driving the yen much higher given the risk of intervention by Tokyo, with many wondering how much appreciation Japanese officials will tolerate before they are forced to act and weaken the currency.

The euro &lt;EUR=&gt; hit a session low against the dollar at $1.1337, down from a 5-1/2 month peak of $1.1437 touched on Friday.

German factory orders and a subdued start to the euro zone’s business activity in the first quarter weighed on the euro, while the currency briefly touched its session low against the dollar after Institute for Supply Management data showed a stronger-than-expected gain in the U.S. non-manufacturing sector in March.

“The concern is that going forward we will continue to see a loss of momentum in the euro zone,” said Sireen Harajli, currency strategist at Mizuho Corporate Bank in New York.

The Australian dollar hit a one-week low against the greenback of $0.7511 as oil prices fell for a third straight session. Lower commodity prices tend to reduce inflationary pressures, causing a worry for policymakers in the developed world, who want to head off the threat of deflation.

The dollar index &lt;.DXY&gt;, which measures the greenback against a basket of six major currencies, was last up 0.28 percent at 94.774.

(Reporting by Sam Forgione; Additional reporting by Anirban Nag in London; Editing by Dan Grebler)