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The worst selloff in emerging-market currencies in five years is beginning to reveal the extent of the fallout from the Federal Reserve’s tapering of monetary stimulus, compounded by political and financial instability.
The Turkish lira plunged to a record and South Africa’s rand fell yesterday to a level weaker than 11 per dollar for the first time since 2008. Argentine policy makers devalued the peso by reducing support in the foreign-exchange market, allowing the currency to drop the most in 12 years to an unprecedented low.
Investors are losing confidence in some of the biggest developing nations, extending the currency-market rout triggered last year when the Fed first signaled it would scale back stimulus. While Brazil, Russia, India, China and South Africa were the engines of global growth following the financial crisis in 2008, emerging markets now pose a threat to world financial stability.
That line of the Rabbit family tree died quite some time back, I'm afraid...and they may well be out of smoke and mirrors too.
Fiat currencies are fine and dandy and ours has been since Nixon truly made it one. There is just one little catch.........
Fiat currency is another way of saying value based on perception of value, and when perception crashes it is not only near impossible to get back, the currency goes right down the crapper with it.
I honestly hope this ain't it. However... Everyone SHOULD ALWAYS have 3-7 days supplies in even a small apartment, and to not have to leave for anything whatsoever for at least that long to my thinking ...and preferably 3-6 months in real terms. That's for any disaster that may come along, and nothing specific for the basics, IMO.
When math meets reality tho, I don't think there will be anything slow at the tipping point. Maybe 2-4 days tops, maybe a lot less... Just purely my opinion.
My initial reaction on hearing that emerging economies are taking a fall as QE is winding up is that the USD economy is much stronger than expected and could do with some more of the ongoing inflation of QE. But then the global economy is a complex thing and there are many things going on in this world. Turkey is right next to Syria, so just how much of an effect is the Syria conflict having on the lira with the influx of refugees and all round general chaos that wars bring? To say that things are all rosy in South Africa as well is a relative statement. While money does make people go round, it is gravity that makes this world go round.
reply to post by bobs_uruncle
This is interesting, why does the emerging Markets are having a problem with the tapering of the Fed on the US markets QEs? actually the tampering is just pennies on the dollar compare to the still on going stimulus or QEs.
Unless the corruption and Ponzi scheme call the US markets used some of that money to prop the emerging Markets since the crash of 2008, then I could see a reason for them to be afraid.
reply to post by bobs_uruncle
everything happening in our current market is a move to the amero.
its going to be the jesus currency they need to fix our economy and they are going to have us begging for it