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BUENOS AIRES, Argentina (AP) -- A top Argentine official denied on Friday that the government plans to devalue the peso amid rumors that drastic official actions are looming. "We are not going to take any explosive measures," Deputy Economy Minister Axel Kicillof said at a news conference. Argentina's economy is under pressure from rising inflation and slowing trade, and people have been increasingly trading their pesos for U.S. dollars to shelter their earnings.

So far, during the presidency of Barack Obama, the price of a gallon of gasoline has jumped 83 percent, according to data from the Bureau of Labor Statistics. (AP Photo) During the same period, the price of ground beef has gone up 24 percent and price of bacon has gone up 22 percent. When Obama entered the White House in January 2009, the city average price for one gallon of regular unleaded gasoline was $1.79, according to the BLS. (The figures are in nominal dollars: not adjusted for inflation.) Five months later in June, unleaded gasoline was $2.26 per gallon,...

The politics of economics has again risen in the wake of the stock market's recent haircut. Economists and experts from both the right and the left are now falling all over themselves to "do something". Why the stock market is the universal signal, the hunter's bugle call to action, is not yet known. After all, the economic and financial problems of August 2011 have been largely unchanged since August 2007, and indications of these unresolved imbalances have been, and continue to be, numerous. What is troubling is this bipartisan political urge to "do something". In the space of a few...

By staff reporter Huo Kan and Washington correspondent Zhang Tao 08.01.2011 17:29 More Investors Ask, Why Not Short the Yuan? Crisis theorists and others are wagering that the Chinese currency will veer from its long appreciation path against the dollar Plenty of smart money is betting on the rise of the yuan, but some overseas foreign exchange investors are looking the other way. Contrarians range from hedge funds to wealth management firms, and they generally agree that the possibility of yuan devaluation against the U.S. dollar is at least slightly greater than market consensus. Chinese policymakers, meanwhile, are not rushing...

MINSK, Belarus (AP) — A sharp devaluation of the Belarusian ruble has spread panic across the country, with people rushing on Wednesday to buy dollars, euros, toasters and canned goods — anything that will not lose its value as quickly as the national currency. Belarusians swept store shelves and queued for entire days at currency exchange offices in a desperate attempt to protect their savings from the country's sinking fortunes. President Alexander Lukashenko promised that the national currency will remain stable following the devaluation ordered a day earlier, but experts warned it will continue its nosedive if Russia doesn't provide...

LIVING THROUGH A CURRENCY DEVALUATION By Lonerangersilver May 19,2011 In 1976 I was managing an American subsidiary of a successful large US Company in Mexico. It had been a financial turnaround for our team. Cash flow had accumulated in our bank in Mexico and corporate didn’t want the money repatriated to the US. Although we had already paid a 35% income tax to the Mexican government, we would have to pay an additional 30% exit tax to repatriate the money. In addition, we would have to pay high fees for the peso/dollar exchange, in order to make the transfer. The...

Could the long dollar slide be over? For the better part of the past decade, and particularly in the last few months, the American dollar has been the 98-pound weakling of the foreign exchange world. It has lost value against almost every other global currency — not just the euro, pound and yen but even the Romanian new leu and the Latvian lats. Driven largely by the Federal Reserve’s policy of printing dollars to help spur a healthy economic recovery that remains stubbornly elusive, the dollar, weighed against a basket of other currencies, hit a 40-year low this month. But...

As the value of the dollar continues to decline, that legendary Honolulu police detective of yesteryear, Charlie Chan, is summoned to question several persons-of-interest. With his Number Three Son, Tommy, Chan enters the plush, mahogany paneled meeting room at the Department of the Treasury where several likely suspects await.  In the center of a conference table, inside a tamper-proof glass box, is a single dollar bill that appears to be smaller than normal. We listen in on the conversation: Vice President Joe Biden: Welcome to America, Charlie. I've heard so much about your restaurant in Honolulu. I love cashew...

What is gold really worth? In one sense, the answer is obvious. Gold is worth $1,515.10/oz, because that is what it is trading for in the market as of this writing. However, all this number means is that an ounce of gold has 1,515.1 times the market value of our current, undefined, “fiat” dollar. A deeper and more interesting question is, “What should gold be worth?” In other words, in terms of what quantity of gold would we define the dollar if we wanted to have a stable currency, a stable economy, and stable financial markets? This is not just...

A disappointment in Q1 was the relatively modest growth of US exports, confounding economists who might have assumed that the weak dollar would rectify that problem. As explained in his latest FX Focus, Citi's Steven Englander points out that the connection between a weak currency and strong exports is dicey at best. Here are the three main reasons why: 1) It may be small beer in the big picture. Productivity changes and the regulatory environment among other factors may in practice matter more than measured shifts. EM countries climbing up the quality ladder may matter more for growth in export...

If our leaders in Washington DC wanted to stop the decline of the dollar, they could. Easily. Therefore, if the dollar is falling — and it is — they want it to fall. The dollar is falling against most major currencies and this decline has been underway, with an occasional rally, for years. Also, as we have seen, the price points for oil, commodities and precious metals have been buoyed by the declining dollar.Here is a chart showing history of the dollar versus major currencies dating back to 1973: Source: Scott Grannis Scott Grannis made an excellent point in...

<p>The other day Paul O’Neill said that . . .</p> <p>Oh, wait. I suppose I ought to explain who Paul O’Neill is. A decade ago, he was President Bush’s first Treasury secretary. I have no very clear memory of him except that he toured Africa with Bono and they were photographed in matching tribal dress looking like Colonel Qaddafi’s Mini-Me twins at a Tripoli sleepover. Other than the dress-up fun, I’ve no idea why they were in Africa, but you paid for it, so I’m sure there was a good reason.</p>

Gold futures settled at a record Wednesday, getting a boost after the Federal Reserve kept its key interest rate at an historic low range and said rates will likely stay low for an “extended period.” The Federal Reserve’s Federal Open Market Committee on Wednesday left its key interest rate at an historic low range of 0% to 0.25% and said its $600 billion bond-buying program would end as scheduled on June 30. The decisions were widely expected. Read more about the Fed decision. “The continued wording of exceptionally low rates for an extended period says it all,” Keith Springer, president...

We’ve always wondered why there is so much debate about the rate of inflation. It seems like such a simple thing to track. You go in the store. You buy a box of Wheaties. You write down the price. Next month, you do the same thing. What’s so hard about that? But what if the box is smaller next month? What if the Wheaties are twice as good? What if you can get the same enjoyment from a box of Wheatie-Puffs at half the price? What’s the real rate of inflation? It depends on how you figure it. The Labor...

In case you're not paying attention, the silver market has gone nuts today, surging until near $50, before collapsing to around $46. It's the most controversial, hotly-followed asset class in the world. So what's the real story. Earlier this month, Philip Klapwijk of GFMS presented a very through, complete look at the silver market: from its demand, its production, and where the current market stands in history. It's definitely a great, complete lesson. CLICK ABOVE LINK FOR THE REST

<p>Congressman Paul Ryan, one of the least insane men in Washington, has a ten-year plan.</p> <p>President Obama, one of the most insane spenders in Washington, has a twelve-year plan.</p> <p>After hearing the president’s plan, Standard & Poor’s downgraded the U.S. sovereign-debt outlook to “negative.” Ah, the fine art of understatement. In 1940, after the fall of France and the evacuation from Dunkirk, presumably they downgraded Britain’s outlook to “spot of bother.”</p>

The greenback has been in decline for a decade, but the latest slide is setting off alarms. Still, a collapse seems unlikely given the lack of a real global alternative to the dollar's status. Housing crisis, 2007. Banking crisis, 2008. Unemployment crisis, 2009. European debt crisis, 2010. For 2011: a dollar crisis? You will probably hear more warnings to that effect soon if the U.S. currency continues on its current path. Although the dollar has mostly been falling against its major foreign rivals since 2001, the slide this spring is taking it to levels that fit conveniently with a variety...

Weakness in the US dollar, which is causing everything to go up—including gas prices, food and stocks—is unlikely to go away soon as a selling frenzy hits the currency market. The greenback is approaching pre-financial crisis lows and threatening to smash through its all-time low when measured against the world's predominant national currencies. A combination of factors accounts for the weakness, with the Federal Reserve's easy-money policies, huge national debts and deficits and the consequential possibility of a debt downgrade because of the financial mess in Washington leading the way. In short, as trader Dennis Gartman noted Thursday, "the rout...

Members of the International Monetary Fund emerged from their huddle in Washington last weekend resolved to keep every option open to slow the flood of dollars pouring into their countries, including capital controls. That's a dangerous game, given the need for investment to drive economic development. But it's also increasingly typical of the world's reaction to America's mismanagement of the dollar and its eroding financial leadership. The dollar is the world's reserve currency, and as such the Federal Reserve is the closest thing we have to a global central bank. Yet for at least a decade, and especially since late...

Back around 2005 when housing was booming, far from a sign of economic vitality, the proverbial "rush to the real" signaled a growing economic downturn. Thanks to a dollar in freefall as evidenced by a spike in the price of gold, always limited capital was migrating toward the hard, unproductive assets least vulnerable to currency devaluation. To put it simply, the real recession was the housing boom. Since the dollar's lurches in either direction tend to set the tone for global currencies, our monetary error was something shared by everyone as a run on paper currencies around the world fostered...

Gold futures rallied above $1,500 an ounce on Wednesday, as the U.S. dollar fell sharply and investors bought the precious metal as a hedge against inflation and economic uncertainty. Gold for June delivery /quotes/comstock/21e!f:gc\m11 GCM11 +0.47% rose $10.70 to $1,505.80 an ounce in electronic trading on Globex. The weaker dollar, European sovereign-debt worries and Standard & Poor’s move Monday to cut its outlook on the U.S. sovereign rating have all spurred appetite for gold. In the currency markets on Wednesday, the greenback posted steep losses as the euro /quotes/comstock/21o!x:seurusd EURUSD +1.25% rallied 1.1% to $1.4498. The dollar index /quotes/comstock/11j!i:dxy0 DXY...

Gold extended gains to a record in New York as a drop in the dollar buoyed demand for the metal as an alternative investment. Futures surged yesterday after Standard & Poor’s revised its U.S. credit outlook to negative. Gold has jumped 5.3 percent this year as the dollar dropped 4.8 percent against a basket of six other currencies including the euro and British pound. Gold prices may keep rising for “some years into the future,” Blackrock Inc. fund manager Evy Hambro said in an interview with Mark Barton on Bloomberg TV’s “On the Move.” Gold for June delivery rose $1.60,...

The most astounding feature of the political fray as the 2012 election comes into view is that not a single Republican other than Congressman Ron Paul is stepping forward to brand as his or her own the issue of honest money. The whole party is into the negotiation with the president over the budget, and the underlying issue--the failure of our fiat currency--is up for grabs. It is true that there's plenty of blame to go around on the dollar. It had a value of 265th of an ounce of gold on the day that George W. Bush acceded to...

This week the dollar has had the classic opportunity to rally aggressively. Global risk appetite has subsided, commodity currencies have fallen and investors were willing to take profit. Instead, we have witnessed only a feeble attempt to rise. The dollar is more than sick, it’s terminal. With the Fed expected to now trail all other Cbanks when it comes to tightening, is putting the dollar near the bottom of the G10 carry trade league and up there with the classic funding currencies. Even the hawks are unable to save their currency from the abyss. Expect the fears of a...

In the United States, the media's interest has been focused on who won the game that was the potential government shutdown.  As usual the reporting is based on a sporting event and not the importance of the change of direction the shutdown represents.  At the moment there is no winner or loser; that will be decided if and only if spending is dramatically reduced and government begins to shrink appreciably.   Many of us have repeatedly called attention to the financial markets and international uncertainty precipitated by American monetary, fiscal and foreign policies by focusing on bell-weather commodity prices, particularly...

Frustrated by "the suffering of real families," President Obama's former top economic adviser recently called for action: "If I have a complaint about policy these days, it's that we're not doing enough," Christina Romer said in a speech last month at Vanderbilt University. "I think there are tools we have tools we have that we can use, and I think it's shameful that we're not using them." With unemployment still near 9% and the "real" unemployment rate at 15.7%, "we can't afford not to do more," Romer tells me in the accompanying video. "For heaven's sake with this many people...

Let the word go forth: On Friday, March 25, 2011, Warren Buffett predicted the decline of the U.S. dollar. In a speech given in New Delhi (where he's hunting up some cheap Indian stocks), the chairman of Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) warned investors to avoid "long-term fixed-dollar investments" such as 10-year U.S. Treasury bonds. Buffett worries that the $2.3 trillion in new money our government has pumped into the economy, when combined with interest rates so low they're practically giving money away, are combining to dilute the value of the dollar. As a result, Buffett warns:...

Believe it or not Ripley! The People’s Bank of China(PBOC) recommended yesterday that 1 billion Chinese consider buying gold as a hedge against inflation and to preserve values in a world where currencies can fall. The PBOC Financial Markets Review came out just as several major currencies were indeed declining in value against gold; the dollar,1%, the Swiss franc,2.5%, t he British pound, 2%, and the Japanese yen, 2%. Wow! Be like the Fed telling you to buy oil stocks or crude oil futures due to expectation higher gasoline prices this summer. So, add the PBOC to other secular influences...

Here is a thought experiment concerning two men who have issued money. One issued gold and silver coins that will today bring more in dollars than he charged for them. The other issued paper notes that are today worth but fraction the gold or silver they were worth at the time they were issued. One man is facing the possibility of years in prison after a federal jury found his issuing of money to have been a crime. The other man is walking around free and being treated by the authorities with great deference. Which is which? It turns out...

The front page of Section R of the March 14 edition of The Wall Street Journal was devoted to the pros and cons of investing in gold. The section posed the question, “Is gold a good investment?” It then, of course, presented two different points of view. One writer, a certified financial planner, answered, “Yes.” The other author, a chief investment officer, said, “No.” A better answer to the WSJ’s question would be, “Gold had better not be a good investment, because if it is, we are in for a dismal economy.” Of course, by the time that the WSJ...

The following is adapted from a speech delivered on February 16, 2011, at a Hillsdale College National Leadership Seminar in Phoenix, Arizona. TO BEGIN, consider one of the most important measures of property, the kilogram. It’s a measure of mass or, for non-scientific purposes, weight. According to the papers last week, a global scramble is under way to define this most basic unit after it was discovered that the standard kilogram—a cylinder of platinum and iridium that is maintained by the International Bureau of Weights and Measures—has been losing mass. You may think that this is impossible. Of all the...

Spending power erodes, and Fed may do more damage Guess what? Your pocket has been picked. I don’t mean your wallet, or even its contents. What I am referring to is the buying power of the money it contains. The consumer price index (CPI) tells the story. As you know, it measures the change in prices of a fixed basket of goods and services that the typical household supposedly purchases every month. The recent trend of the CPI does not reveal much to worry about. In 2010, consumer prices rose a relatively benign 1.5%. However, there is more to this...

US Treasuries last week suffered their biggest two-day sell-off since the collapse of Lehman Brothers in September 2008. The borrowing costs of the government of the world’s largest economy have now risen by a quarter over the past four weeks. Such a sharp rise in US benchmark market interest rates matters a lot – and it matters way beyond America. The US government is now servicing $13.8 trillion (£8.7 trilion) in declared liabilities – making it, by a long way, the world’s largest debtor. Around $414bn of US taxpayers’ money went on sovereign interest payments last year – around 4.5...

Those nagging whispers warning that the United States is heading for an Argentina-like currency crisis are getting louder. The prospect of a prolonged devaluation of the US dollar is just one more challenge in what has already been a difficult period for savers and investors. Have we really reached the point where the greenback is in danger of becoming an “also ran” currency? (Snip) This correction has already started as millions of unemployed Americans can attest. The Federal Reserve has conceded that unemployment will remain elevated through 2011.

The dollar disaster is not exactly new news. In fact, it has been going down and down for a long time as this chart illustrates. The chart tracks the dollar versus major currencies back to the year 2000. The Federal Reserve had begun raising short-term interest rates in 1999 to beat back the roaring economy. In 2001, the economy fell into recession and then suffered the severe blow of the September 11 attacks. At that point, the Fed dropped interest rates to stimulate the economy. Reducing short-term interest rates also generally weakens the dollar. The blue line shows short-term fluctuations...

U.S. Treasury Secretary Timothy Geithner vowed on Monday that the United States would not devalue the dollar for export advantage, saying no country could weaken its currency to gain economic health. "It is not going to happen in this country." Geithner told Silicon Valley business leaders of devaluing the dollar. Geithner broke his silence on the dollar's protracted slide ahead of this weekend's meeting of finance leaders from the Group of 20 wealthy and emerging nations in South Korea, where rising tensions over Chinese and U.S. currency valuations are expected to take center stage. "It is very important for people...

In certain circles, it has become fashionable to argue that monetary policy is a superior instrument to fiscal policy – more predictable, faster, without the adverse long-term consequences brought on by greater indebtedness. Indeed, some advocates wax so enthusiastic that they support recent drives for austerity in many European countries, arguing that if there are untoward effects they can be undone by monetary policy. Whatever the merits of this position in general, it is nonsense in current economic circumstances. A quarter-century ago proponents of monetary policy argued, with equal fervour, in favour of monetarism: the most reliable intervention in the...

As measured by the price of the forward December contract on COMEX, the value of gold is up nearly 30% -- over $300 per troy ounce -- since last October, and it recently closed at a record high (in nominal terms) of $1,374 per ounce. Hardly unique among commodities, gold has had lots of company in the trading pits. Silver is up by 32%, and even the price of coffee is on the rise -- not only on the exchanges, but at Starbucks too. Gold's unflinching rise has caught many traditional equity investors off-guard, and some are even angry about...

Some OPEC members want oil prices to rise to $100 a barrel to offset the decline in the dollar. The value of the dollar, which has slipped 13% since June against major world currencies, means that the "real price" of oil is about $20 less than current levels, Venezuela's Energy and Oil Minister Rafael Ramirez said after Thursday's OPEC meeting in Vienna. OPEC, which accounts for 40% of global crude output, left targets unchanged and called for stronger adherence to production quotas, Bloomberg News said. "They're concerned about the dollar because as the dollar weakens, prices go up," Nordine Ait-Laoussine,...

While You Were Sleeping, The Dollar Continued To Get Crushed Joe Weisenthal Oct. 1, 2010, 5:36 AM Or to put it another way, the US gained ground in the global competitive currency devaluation war.[snip]

As gold hovers just below the $1,300 mark it broke last week, consensus expects the metal keep rising in the coming week. The bull is back: Bloomberg: Sixteen of 23 traders, investors and analysts surveyed by Bloomberg, or 70 percent, said the metal will rise next week. Six forecast lower prices and one was neutral. Gold for December delivery was up 1.3 percent for this week at $1,293.60 an ounce at 11 a.m. yesterday on the Comex in New York. Futures climbed to a record $1,298 on Sept. 22. ... The weekly gold survey that started six years ago has...

Adam Fisher: Big Chance Euro Zone Will Devalue or Dissolve Thursday, 13 May 2010 01:01 PM By: Forrest Jones There is a 65 percent chance euro zone countries will allow their currency to devalue or dissolve and everyone does their own thing, says Adam Fisher, Co-founder, CommonWealth Opportunity Capital, a Los Angeles Hedge Fund. Europe spent $140 billion aiding Greece, a figure that could have been a lot smaller had the rescue come months ago. Plus, other countries such as Spain and Portugal are going to come asking for help as well, Fisher says. “We're horribly bearish about the options...

Rarely are currency exchange rates as good for the American dollar as that of Asian countries. In Asia, the American dollar carries a lot of clout and with the recent devaluation of the USD; it is a good thing that these countries offer an excellent trip for so little cost to Americans.

(Reuters) - With economic policy stimuli already at full tilt, no government wants an overvalued exchange rate to slay recovery, and the rival "soft currency" needs are producing some elaborate rhetorical jousting. The problem is that major exchange rates -- at least those between the developed G4 economies of the United States, euro zone, Japan and Britain -- are largely market determined and difficult to control. There's no magic wand to conjure up devaluation and the monetary and fiscal levers that could possibly engineer a free-floating depreciation are near exhausted. G4 interest rates remain near zero. New money and liquidity...

NEW YORK/WASHINGTON (Reuters) - The only time the U.S. dollar ever took a serious shellacking in the marketplace, the wounds were almost entirely self-inflicted. Facing mounting inflation and the escalating cost of the Vietnam War, President Richard Nixon, on August 15, 1971, took the United States off the gold standard, which had been in place since 1944 and required that the Federal Reserve back all dollars in circulation with gold. The move amounted to a made-in-America double-digit devaluation, shocking the country's foreign creditors. Deep inside the New York Federal Reserve Bank's fortress in lower Manhattan, Scott Pardee, then 34, was...

The government said Tuesday that foreign demand for U.S. Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion. The reductions in holdings, if they continue, could force the government to make higher interest payments at a time that it is running record federal deficits. The Treasury Department reported that foreign holdings of U.S. Treasury securities fell by $53 billion in December, surpassing the previous record of a $44.5 billion drop in April 2009.

Vietnamese Hoarding U.S. Dollars As Dong Crashes Post-Emergency Devaluation Vincent Fernando Feb. 11, 2010, 12:01 AM Vietnam's currency, the dong, is crashing after the government was forced to devalue it by 3.4% against the U.S. dollar for the second time in under three months. The new fixed rate for the currency is 18,544 dong per dollar, versus 17,941 previously. The central bank also imposed a 1% ceiling on interest rates for dollar deposits at banks in a bid to disincentive the hoarding of dollars. Yet the black market thinks that the government will have to slash the dong's exchange rate...

Nervous Venezuelans panic buy TVs after devaluation Sat, Jan 9 2010 * Shoppers fear sharp price rises for imported goods * Opposition fuels shopping spree with warnings By Eyanir Chinea CARACAS, Jan 9 (Reuters) - Shouting "buy, buy, the world is going to die," Venezuelans went on a frantic shopping spree on Saturday following a sharp currency devaluation that is expected to drive up prices. President Hugo Chavez announced a dual system for the fixed rate bolivar on Friday night while much of the country was watching a baseball game. But on Saturday, word spread quickly as people read the...

CARACAS, Venezuela – Venezuelan President Hugo Chavez on Friday announced a currency devaluation for the first time since 2005. Chavez said Venezuela's currency, the bolivar, will now have two government-set rates depending on the use, either 2.60 to the dollar for transactions deemed priorities by the government or 4.30 to the dollar for other transactions. The devaluation dropped the currency's value by 17 percent or 50 percent, depending on the tier. The currency's official exchange rate has been held steady by the government at 2.15 bolivars to the dollar since 2005.

N. Korea's Currency Reform Could End in Chaos The North Korean military is on alert for a possible civil uprising following last week's sudden currency reform, according to a Russian business newspaper citing foreign diplomats in the communist country. The currency reform involved the exchange of only limited amounts of old bills at a rate of 100:1, with the state confiscating the remainder. People who are afraid of exposing the size of their wealth have no choice but to hide their old bills. It is difficult to ascertain the actual circumstances, but it is apparent the North Korean regime is...