Contagion Spreads in Emerging Markets as Crises Grow

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.

Contagion Spreads in Emerging Markets as Crises Grow

Well, could this be the beginning of the end for our financial system or will the PTB pull a fiat gold plated rabbit out of their collective posterior? It seems the PTB are making noise about emergent markets and I find it odd, that like the axis of evil - you know, the no central reserve bank rogue nation thingy, that they are targeting BRICS countries who have formed their own sideways banking systems.

You have to wonder where this is heading, but the recent drops in the stock markets and the forced propping up of same through what appears a patently fraudulent means coupled with the FED's tapering of QE looks like it spells disaster.

Now I can't see them, the PTB, being that stupid, so obviously this situation is contrived for a purpose, a "higher" agenda. I guess we just have to wait and see how this plays out.

Cheers - Dave

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.

Wrabbit2000
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.

I see it being a quick transition, should it occur and it certainly looks like it will in the near future. As far as stocking up, I have deer, bear and rabbits in the local woods of which there are about 1000-2000 acres of cut-able trees. We have a river running walking distance behind us, we're on well water (electric and manual), have a cold room, a wood stove and excellent neighbors. As well we have alternative electricity sources including a steam turbine and an 4000v@2000 joule electrified fencing system. It's one road in/out to about 150 homes on a lake with fish, the community is reasonably defensible and together I would say we have at least 150 acres of land in the community that can be used to grow food, we also have bullrushes, large frogs, ducks, geese, turkeys, etc. and on my property alone, black walnut trees that bear about 2000 walnuts a season plus two apple trees.

I've planned ahead, hope for the best but prepare for the worst ;-) Like I said though, it's a wait and see game.

Cheers - Dave

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.

kwakakev
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.

I don't know a lot about Syria, but as far as South Africa goes, I do and I still have a lot of friends there. Back in the late 80's we had two types of financial transfer instruments, the Financial Rand (R4.10 to $1USD) and the Commercial Rand (R2.6 to $1USD). There were some loopholes, but they were closed up in 1988/1989 to circumvent a currency flip I developed in 1987 that allowed companies to move millions in Rands out of country at R2.6 as royalty payments and bring them back in at R4.10 as private investment. Now, the R2.6:$1USD was the going rate if you came in on vacation and the R4.10:$1USD was applicable during investment transfers. The going rate comparable to the R2.6:$1 is now around R10:$1USD, at the worst case I think the Rand was 13.5:1 and that only occurred after the ANC /mandela came into power, after 1994. So it isn't all "rosey" in SA, I see them being under financial attack, not unlike the UN/IMF extortion of 1989 that had the result/appearance of forcing SA to capitulate to UN/IMF demands. It's just that now, the ANC government members are so corrupt and stupid, they can be bought off very easily.

Cheers - Dave

reply to post by bobs_uruncle


I did not know South Africa has two different transfer rates, I can see it's purpose in trying to bring outside investment into the country but also expect such a system to get exploited at any opportunity.

As for what the currency market has become is a strange one. For those that trade in it they are not buying or selling any goods or services or contributing to any real production. Basically you buy another currency because you think it is worth more that it is valued and sell it because you think it is worth less than it is valued. At the end hopefully you make a profit if you guess right with your new found wealth coming of the back of the nation or currency you traded in.

With the Fed making all this new money with the QE it has to start it's life somewhere. If the global currency markets are reacting even a little to changes to QE policy then it does raise an assumption that the currency market is getting at least a chunk of this new money. If this is the case and as QE stops, the currency market along with all the other markets that get this free money will all have reactions. The short term news will be all bad for those living on this free ride, longer term market sustainability has many other factors involved.

reply to post by bobs_uruncle

Just from memory: I heard a broadcast on Coast to Coast with a fellow by the name of Harry Dent. Believe it or not he (as my memory serves me) said the U.S. dollar was actually the place to be (for awhile) because the plan is to run all the other currencies into the ground and make the U.S. Dollar once again highly sought after.. Look up some of his predictions.. He called the gold market going down down.... and in 2005 he called the housing bubble bust.
Just another voice claiming to know what is going on or someone who has figured it out ? Either way his reasoning was backed up by numbers and the world financial forecast he has been doing these last 30 years... Probably the best way would be to catch the C2C broadcast on 20 January 2014.. He is big on long term cycles... Next two years it will start (already has ?) and will get worse until 2019
He did speak about gold and silver and about deflation and it's causes... 1843 and 1933 classic examples of deflation and the losers and winners. Inflation after 5 years of massive money printing is less than 5%.. Say the stock market crashes to 5000 from a high of 17000..Fiat money is destroyed..Means less money available chasing tangible assets. Harry is still big on the dollar because world wide the U.S. dollar went up in value against other currencies... Hummmm I did like some of his core reasons because he also considers demographics of a country...
Anyway catch the broadcast or look him up if interested..
He did say China will be the trigger with their greatest financial bubble in history going bust.

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.

marg6043
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.

I think the correct quip here would be, "And there lies the rub." An awful lot of money from the bailouts and the quantitative easing went into foreign banks. It gives the FED and their club members control over currency values in other countries and by extension, control of economies. To pull all the money back would be catastrophic to those economies. "He who can destroy a thing, controls a thing."

Cheers - Dave

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

onequestion
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

You're probably right re. the amero, but right now they also have a large percentage of the population begging for the rope to hang them all with. A new currency will not save us, the removal of the FED, Bank of Canada, Bank of England, BIS, IMF, World Bank, etc. along with criminalizing lobbying, might.

If politicians, bankers and lobbyists knew that they would be held accountable for their crimes and hung for treason, I believe they would think twice about their self-gratification-via-taxpayer. I think that is the direction we have to go or we are lost.

Cheers - Dave