[R-P] Porqué está subiendo el dólar?

[Néstor Gorojovsky]

/Esto me lo envía una economista ultramonetarista, partidaria del
patrón oro y seguidora de von Mises. Pero al mismo tiempo una persona
honesta que supo ver muy bien, al menos en sus contrapartidas de la
Argentina y de Rusia, que se trataba de bandas de ladrones. Traduzco
rápidamente lo esencial/:

La aurora del dólar es falsa. El mundo está liquidando sus títulos
apalancados (leveraged), y como la mayoría están en dólares, la gente
necesita dólares para pagar sus deudas. Cuando termine el
desapalancamiento, la caída del dólar será dramática, a no ser que se
llegue a un acuerdo global, ahora o en el futuro. Pero los bancos
centrales se están ahogando en una marea de dólares (China tiene casi
dos billones!) así que llegar a un acuerdo va a ser difícil. Estén en
alerta para el momento en que empiecen a caerse la mayor parte de los
fondos compensados (hedge funds)

La gente piensa que los bonos del Tesoro son "seguros"... pero no lo
son, y con el tiempo esto se verá claro. Ya están preocupadas las
autoridades, según lo muestra este artículo del Financial Times de hoy
(solo lo reproduzco en inglés, N. G.). Si quiere ver cuál será el
destino del dólar, mire la participación extranjera en las ventas de
bonos (el Fed comprará el sobrante con dinero que el Fed va a
imprimir, y esto porque los ciudadanos de EEUU no tienen ahorros que
les permitan comprar los bonos  :-)

---------- Forwarded message ----------
From: Anne Williamson <annewilliamson en msn.com>
Date: 2008/10/28
Subject: Re: [A-List] Dollar revaluation?
To: The A-List <a-list en lists.econ.utah.edu>


It's a false dawn for the dollar.  The world is de-leveraging and since the mass

of debts are denominated in dollars, people need dollars to pay their debts.

Once the de-leveraging is concluded, the dollar will lose value
dramatically unless some global

bargain has been made, or will be made.  However, the central banks
are drowning in

dollars - China has nearly $2 trillion of them! - so that's gonna be a
hard deal to strike.

(Look out for when the majority of hedge funds start to collapse!)

With all the bailouts afoot, the US Treasury will have to sell a lot
of debt.  Who will

buy that debt?

Today, people think T-bills are "safe" - yet they are not, and that
will become clear in time -

already the authorities are worried, as evidenced by this article in
today's FT.  If you want

to track the dollar's fate, watch the foreign participation in the
bond sales (the Fed will buy

the excess, with money the Fed prints, and this is because US citizens
have no savings with

which to buy bonds :-)....one of the great shorts in due time will be
US Treasuries.



Fears for interest in US Treasury bond issue



By Michael Mackenzie in New York



Published: October 27 2008 19:45 | Last updated: October 27 2008 19:45



The cost of the recently announced bail-out and funding programmes for

the US financial system looms large over the US government bond market.

But the timing is far from ideal because issuance is about to surge just

at a time when the ranks of dealers has thinned and their capacity to

buy new debt is impaired.



Dealers face the sale of $34bn two-year notes on Tuesday and $24bn

five-year notes on Thursday, unchanged from last month's record sizes.

Then comes the US Treasury's refunding announcement next Wednesday.



Just how much new Treasury issuance enters the market depends on the

ultimate cost of bail-outs for banks, the deterioration of taxation

receipts and the rise in government spending as the economy weakens and

as the Federal Reserve's balance sheet expands.



Before the recent upheavals, the US budget deficit for the fiscal 2009

financial year starting this month was estimated between $400bn and

$450bn. Some economists now expect that figure to reach $1,000bn, which

would be a record. That will push Treasury debt sales sharply higher.



    'Investors will look at the low level of yields and determine

    whether it makes sense locking in at those rates'



"It is pretty conservative to say that the cost of the bail-out will be

$1,000bn and by the time all the programmes have been tallied, it could

be $2,500bn," says Jamie Jackson, portfolio manager at RiverSource

Investments.



This is all going to mean greater frequency of issuance and a return of

previously discontinued issues such as the three-year note and possibly

the seven. At a minimum, dealers expect the return of the three-year

note, which was suspended in May 2007. The sale of 10-year notes is

expected to move to a monthly schedule from being sold twice every

quarter at present. New sales of 30-year bonds are seen occurring every

three months.



Up to now, much of the growing debt burden has been borne by short-dated

Treasuries. Earlier this year, the one-year Treasury bill was revived

after an absence of seven years. Two-year note auction sizes have nearly

doubled from $18bn last September, while the five-year note auctions

have expanded from $13bn to $24bn.



For now, Treasury yields are relatively low, as equity markets have

fallen steeply this month, fanned by worries of a severe global

recession. Dealers also expect a rate cut from the Federal Reserve when

its meeting ends on Wednesday.



But many Treasury market watchers doubt yields can remain so resilient.



William O'Donnell, strategist at UBS, says: "I don't think people are

going to like the Treasury refunding statement and, at some point,

supply is going to leave a real mark on rates."



He says the total issuance of Treasury debt could range from $1,500bn to

$1,750bn over the fiscal financial year.



Mr Jackson says Treasury yields have not fallen as much as they normally

would from weak economic data due to supply concerns. "At some point,

investors will look at the low level of yields and determine whether it

makes sense locking in at those rates."



From a logistical standpoint, the quarterly sale of debt in November and

this week's sales are a major test for the thinning ranks of primary

dealers. These are the banks and securities broker-dealers that

participate in Treasury auctions.



From 20 primary dealers at the end of 2007, Bear Stearns, Lehman

Brothers and Countrywide have fallen by the wayside this year. The list

will shrink to 16 once Merrill Lynch is absorbed by Bank of America.



Fewer dealers at a time when banks are preserving their balance sheets

before the end of the year has contributed to an erosion in liquidity

for buying and selling current and older Treasury securities. That

backdrop could lead to poorly received auction sales, with yields for

new notes being awarded at much higher levels, driving up the cost for

the Treasury and taxpayers.



"The refunding will be challenging due in part to its likely size and

the reduced liquidity within the Treasury market," says Rick Klingman,

head of Treasury trading at BNP Paribas.



Tom di Galoma, head of trading at Jefferies & Co says: "No one has any

balance sheet room and supply is a concern for the rest of the quarter."



There is also a big question mark over whether foreign buyers will

continue buying Treasuries as the global economy and markets are being

challenged. Foreign investors currently hold more than half of the

$4,800bn in outstanding Treasuries and their participation in auctions

often determines how well the sales and the broad market subsequently

fares.



"The biggest incremental buyers of Treasuries have been central banks

and they are now facing the same problems as the US," says Mr Jackson.

> Date: Tue, 28 Oct 2008 16:50:34 +0200
> From: rainy en tellas.gr
> To: a-list en lists.econ.utah.edu
> Subject: [A-List] Dollar revaluation?
>
> Over the last few months we have seen the strengthening of the dollar
> across the board. This new trend can be explained by the tendency
> of capital to return to the core of the capitalistic markets as the crisis
> deepens. Periphery gets it bad as the capital flights from the developing
> countries to the "safe heaven" of USA. What puzzles me is that: Is this
> dollar strengthening trend just an interlude in this crisis, or will it
> be a main
> and persisting event?
>
> I older times I wouldnt argue. Dollar, in times of global crisis would be a
> "safe heaven", and capital would flow back to the center (where it came
> from).
> But the last few decades, I have to argue that this isnt the whole
> story, at least
> not for all countries. Lets take Russia for example. The old story goes
> that as
> credit tightens and as FDI (foreign direct investment) flies away, the
> developing country's economy will suffer. BUT Russia has some 500bn dollars
> of reserves (down from 600bn dollars in August), only about 100-120bn of FDI
> (just a rough calculation), and another 100bn of refinancing needs for
> its banks
> and businesses. That leaves us with at least a 500-120-100=280bn of
> pillow.Yet
> the 5yr CDS (credit default swap) premium was over 1100points.
>
> I wouldnt dare to call the CDS a rational or accurate tool after all
> this mess, but
> it is usefull as it reflects even the misconceptions of the participants
> in the market.
> As Russia spends all these foreign currency reserves in order to balance
> its market
> selling euros and buying rubles to strengthen the local economy wouldnt
> that mean
> trouble for the euro?
>
> As most foreign reserves are in dollars, my question and argument goes
> like this. As
> the developing countries consume their reserves in order to help their
> domestic markets,
> wouldnt this mean trouble for the dollar? USA is a net borrower and that
> becomes
> much more intensive as the 700bn paulson plan gets underway. So as the
> developing
> countries are hit from the crisis and try to help their economies by
> selling part of their
> dollar reserves, who will finance USA?
>
> And what will become of the shiploads of dollars coming back to the USA.
> How will
> this wont create inflation as more dollars chase even less available goods?
> And the dollar hegemony will become less potent as the developing
> countries will try
> to help their local markets and not US treasury bonds.
>
> If my reasoning is flawed please say it so, Im quite perplexed about
> this sitation.
> My guess is that dollar will strenghten , but as the crisis hits the
> developing economies of
> countries with big dollar reserves, the dollar will fall as a result of
> the consuming foreign
> reserves. Furthermore a depressed and debt ridden american consumer will
> not be an
> attractive choice for the developing countries in order to force their
> currencies cheap
> in dollar terms.
>
>
>



-- 

Néstor Gorojovsky
El texto principal de este correo puede no ser de mi autoría