While this seems like absolute bullshit to me – I thought I would post it on Small Stocks to see what you guys think. It is true that China holds a phenomenal amount of US Currency and that the US Government has put in balance strategies to ensure that China doesn’t sell a whole stack of US Dollars at any one time – otherwise the USD would truly collapse. However, the ‘creation of a new currency’ which ‘simplies cancels out previous US debt’ – is absolutely ridiculous. 

Thinking ‘rationally’ – the world wouldn’t stand for it, it would cause outright global financial collapse and spread fear and panic – and probably war. This may have been a Bush strategy – it certainly wouldn’t be an Obama one. There is an article below on some strategies you can take  

It’s simple really to solve -

Stop spending money America, and start paying off interest expense – not to mention principal.

Check out the video – it’s pretty clear the guy is a lunatic and should probably be locked up.

P.S – I’ll give the guy one thing, he’d be a good car salesman!
P.S.S – If this is true, I’ll eat my hat.

What’s more, the USD didn’t improvement either. It ended the day lower versus most major currencies and hardly moved at all during the trading session. Part of the reason the USD didn’t move more, was that the US Treasury announced it will proceed with its “voluntary capital purchase program” as part of the Trouble Asset Relief Program (TARP) – more commonly known as the “bailout”. What’s more it will do this at “attractive rates for US Tax Payers” – whatever that means. The main restrictions under TARP include a restrictions on executive pay and gold parachutes if the firms under-perform. The hope is that by injection so much capital, firms will restablise and the investment by the Government will eventually return a profit to taxpayers. 

So why didn’t this potentially “good” news lead to an increase in the USD ? Well, the USD – like the Japanese Yen (AUDJPY) - tends to only improve during times of risk aversion and fall when traders want to take on more risk. So, this was part of the reason why the USD didn’t improve and consequently part of the reason why the AUD is weaker.

Keep on rocking up, AUD.

Main Currency Points:

• The Japanese Yen (USDJPY) is back above ‘stable’ levels of 100.00
• The UK Bank Crisis Bailout has strengthened the pound
• Euro is stroner on the back of the Europe Measures being discussed
• The expectation that the US Government is going to back Guarantees is pushing up the USD 

Update: Since the market has opened the Aussie Dollar has gained slightly, but is still under the 0.70 mark. Not sure its going to push above that until the G20 leaders release a clearer decision.

The Australian Dollar (AUDUSD) and the New Zealand Dollar (NZDUSD) continue to fall on the back of lower commodity prices and a strengthening United States Dollar.

Since gold recently broke through the USD $900 (GOLD) and is now trading between $850 and $900 an ounce – this has greatly affected local currency values. The New Zealand Reverse Bank Governor suggested that interest rates will continue to fall and because of that reason, he expects the New Zealand Dollar will fall below 70 cents.

It will be interesting to see how the Currency Trades today on the back of US Markets movements on Friday and the G7 ‘non-outcome’ over the weekend.