Affichage des articles dont le libellé est crise monetaire. Afficher tous les articles
Affichage des articles dont le libellé est crise monetaire. Afficher tous les articles


Qui vend en masse des Bons du Trésor US ?

 A la suite de notre article sur l'Operation Twist Redux de la Fed, nous continuons à nous intéresser au marché des bons du Trésor US. Au delà de la valeur nominale de ces bons, il est désormais plus intéressant de suivre qui les détient, et qui les vend. Voici deux index à suivre très attentivement dans les semaines et mois à venir, qui mesurent le volume des Bons détenus par des investisseurs étrangers :

Depuis la semaine du 24 Août cet index est en chute libre, ce qui représente une baisse d'une ampleur encore jamais observée auparavant, comme en témoigne ces graphiques (cliquez pour mieux voir):

Historique de l'index sur 3 mois : 
baisse de 2.8% de sa valeur entre le 24 Août et le 17 octobre

Historique de l'index sur 1 an glissant
 (mise à jour de l'image toutes les semaines)

Historique de l'index sur 5 ans, jusqu'au 17 octobre 2011. 
Le point d'inflexion marque la faillite de Lehman Brothers le 15/09/2008.

Historique depuis 1989 (plage maximum disponible auprès de la Fed pour cette statistique), en milliards de USD

Historique depuis 1989 exprimé en milliards de USD de variation hebdomadaire

  • Par ailleurs la même baisse se retrouve dans l'index "US Marketable Securities Held in Custody for Foreign Official & Intl Accounts" (FARBTOTL:IND ou directement sur le site de la Fed), depuis exactement la même date du 24 Août :
Historique de l'index sur 1 an glissant 
(mise à jour de l'image toutes les semaines)

Historique maximum disponible auprès de la Fed pour cette statistique

Historique exprimé en milliards de USD de variation hebdomadaire

En parrallèle, on peut observer un accroissement très rapide de la valeur "(d) securities lent and on repo, Section IV" publiée par la Fed dans ses bilans hebdomadaires : U.S. International Reserve Position. On sait donc qui achète, mais qui vend ? Pour en être certain il va falloir un peu de patience et attendre la mise à jour de cet historique mensuel de la Fed : MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES. (historique 1, historique 2)

UPDATE 10/26 : 
Casey Research published today a very similar blog post, with very similar graphics and conclusions : 
Foreigners Losing Confidence in Holding US Treasury and Agency Debt


Operation Twist Redux revisited

 Fed's last operation Twist Redux is one of those events which cause immediately brutal movements on the markets (over reacting), but can only be analyzed a few days afterwards.
Some bloggers are willing to see an offensive monetary policy behind this operation, targeted towards all others majors currencies at the same time : "risk-off" strategy, reversal of carry trade, capital inflows, commodity deflation, and we can even read "king dollar is back".

Some facts are important to remember :
1) original operation Twist I (aka Operation Nudge, 21 Feb 1961-1965) was a defensive experiment for improving US balance of payments because US had to sell gold at an unsustainable rate.  
3) the Fed’s QE2 programme was comparable in size, at around 4% of total Treasury and agency-backed debt. It allows a 28% stock rally during few months, but without noticeable positive effects on Main Street, unemployment and foreclosures. Inflation was allowed to growth, too.
4) another Twist-like operation was run by the Fed... in 2009. Results are known : Wall Street rally but Main Street problems became bigger and deeper. The crisis became more and more a social one.
5) One of the most noticeable movement this time was gold and silver go down.
But if gold market was down during 2 days in a row, it only reached back to 11 August 2011 price level :

source: (clic to enlarge)

Gold price remains since 1971 a very significant trend. Operation Twist II has not changed this in any way. And you can see since 9/27 gold price is up again.

We may see a rally on Wall Street stocks. But like in 60's and in 2009, Fed's last quantitative easing programme will not produce any change in the real world, either for Main Street (commodities, unemployment, down lifestyle), and for inflation in US. Stay tuned to the gold market to verify this day after day, specially during 2012 election campaign.


How to replace the world trade reference currency ?

In order to contribute to answer this question, we have chosen to study facts in recent history, i.e. the replacement of Pound Sterling by US dollar during the XXth century. It is difficult to find accurate information about how this change occurred. Central Banks' archives are not available to the general public. But a recent work by Schenk[1] shed new light on this question.

We will introduce relevant data aggregates coming from IMF to figure out the current status and the dire anticipated future for the US dollar.

From a reserve currency to a dominant currency

First, Schenk has pointed to the need to distinguish the reference currency used for the usual international trade from the dominant currency in central banks reserves. The currency used for the international trade is a simple political choice, based on the known currency stability at this time. US dollar was chosen in Bretton Woods, 1944.

Second, the choice of world trade reference currency has only little link with the current dominant currency in central banks reserves. Read the sentence on page 4, Ref[1]: "...the dominant reserve currency shifted from sterling to the USD and back again during the inter-war period." [2]
Technically, this currency used for the international trade can be replaced in a few months with the current computing systems. After the decision is taken at an international level, we only need to modify the currency used in some few key markets including oil, commodities, gold.
The replacement of Sterling by the US dollar has occured when the US$ was less than 30% of central banks reserves. This replacement has driven a huge deflationary pressure onto the Sterling, at this time the dominant reserve currency. This is the reason why a strategic partnership was introduced between US and UK. But also, multiple monetary cooperations have been deployed by the main central banks to avoid a rapid collapse of Sterling. This transition occurred during several tens of years (see graphic below) when we saw the Sterling depreciate slowly step by step, like if we release steam pressure. If this transition has taken so long, we can be sure it was the only way to protect UK banking system (and its owners), who agreed, in return, to change UK policy into a strong ally of US on every future subjects.

(clic to zoom)

We can draw several conclusions from this historical comparison relevant for our times :
  • First, the second dominant reserve currency deserves a deep attention (see next part below). This currency does not need to become the first dominant reserve currency before becoming the world reference currency
  • Second, as soon as the world trade reference currency has officially changed, an enormous force is liberated leading to the devaluing of the previous reference currency, because it is less used hence less needed into central banks reserves. A lot of people then want to sell a lot of this currency. We can even precise that the speed of devaluing is not in the hands of its emitting country. It is fully in the hands of others central banks who own large assets in this currency. They must negotiate successfully in order to avoid a brutal currency collapse. This deal must be executed during tens of years to release the deflationary pressure step by step, using small devaluings. In our times, the big owners of US dollar reserves, apart Fed, are China, Japan, Gulf Countries, and some countries in Europe. How much of them are nowadays really willing to avoid the US dollar collapse at any price, and have the economy in good health to support this transition's weight during so long ?
  • Third, UK situation up to 1945 was very different than the US current situation, see sovereign debt and unemployment ratio, public services and industrial investments, military infrastructure to sustain. International relations were fully different : UN, IMF were created at this time, and currently UN, G20 and IMF have not succeeded in enforcing any real solution about the global systemic crisis and about the monetary disequilibrium. That's why monetary strategies used for decades to move from Sterling to US dollar and support Sterling with a long transition period cannot be used today.

The dollar, Euro and Unallocated reserves in central banks

We made some simple calculations based on last available IMF COFER data[3], to figure out the different currencies total reserves. Here we want to compare data available for all countries together, for advanced economies, for emerging and developing economies, for USA alone, and for Hong-Kong chinese special administrative region.

1) Composition and growth of official reserve assets (or total foreign exchange holdings) between 1999 and 2011

(clic to zoom)

The main facts to notice are :
  • Total foreign exchange holdings have increased much more from 2001 to 2007 than from 2007 to 2011 in any countries groups
  • This growth is always much bigger in Emerging and developing economies than in Advanced economies
  • Hong Kong and USA have fully different growth patterns compared to any countries groups : a weaker growth between 2001 and 2007, and a much stronger between 2007 and 2011 (see yellow cells)
  • The Unallocated reserves[4] are quickly becoming the dominant share of official reserve assets in the world, including China
They counted for 22% of world total foreign exchange holdings in 2001, 37% in 2007, 45% in Q4 2010. Growth of the Unallocated reserves is much stronger than growth of allocated reserves anywhere between 2001 and 2011 (see blue cells). Once again, this trend is much bigger in Emerging and developing economies. They own now 91% of all unallocated reserves in the world, when advanced economies own only 9% (see rows : "% unallocated in the world" ).
  • The Emerging and developing economies owns 2 third of the world total foreign exchange holdings. From 38% of the total in 2001, this share climbs to 59% in 2007 and 67% in 2011.
  • The Fed owns a tiny and a shrinking share of world total reserve assets
From 4.1% in 2000, this share has shrunk to 1.2% in 2007. Even with the massive QE program and Treasuries purchases by the Fed since 2008, this share is currently still only 1.5%. They are half of Hong-Kong's reserves since 2001 (see violet cells).

2) Composition and growth of allocated reserves in Euro, dollar and SDR currencies between 1999 and 2011

(clic to zoom)

Knowing that allocated reserves represent only 55% of world total reserves assets in Q4 2010, the main facts to notice are :
  • Growth for world claims in US dollar is significantly lower than growth for world claims in euros, and continously since 2001. It is even lower than growth for claims in SDR[5] basket currencies in the same period. This trend is observed for advanced economies as well for the Emerging and developing economies (see green cells).
  • If world claims in dollar represent currently 61% (respectively 26% for Euros) of world total allocated reserves, they represent only 34% of world total foreign exchange holdings (respectively 15% for Euros). This means that the exact composition of currencies into the Unallocated Reserves have a decisive weight to determine the really dominant currency in world reserves (see rose cells). Said differently, it could be possible that today already the dominant currency in reserves would actually be Euro. At least, we can only say that dollar is currently only the supposed dominant currency in world reserves.
  • The share of claims in Euro in allocated reserves is similar in advanced economies and in Emerging economies, and same for claims in dollar. (see rows "euros / total allocated reserves" )
  • The difference between claims in dollar and claims in Euros is lower in Emerging economies (64 - 25%) than in Advanced economies (58 – 28%). Said differently, the Emerging economies are willing to report the claims in Euros (instead in dollar) more often than the Advanced economies.
These graphs[6] summarize the situation of the claims in Euros and dollar (clic to zoom) :


And the following graph summarizes the question around the currently dominant reserve currency. It is relevant because of the dominant share of Emerging economies in the world reserves :

(clic to zoom)

Let's have a look now on claims in SDR basket currencies. These shares allow us to compare a little more precisely between US and Hong-Kong reserves, because they report the claims in SDR basket currencies but not in dollar or in euros.
It is important to note that "The initial weights assigned to each currency in the SDR basket have been adjusted to take account of changes in the share of each currency in world exports of goods and services and international reserves."[7] In this respect, Euro share is 37.4% and dollar share is 41.9%.

(clic to zoom)

Knowing that allocated reserves represent only 55% of world total reserves assets in Q4 2010, the main facts to notice are :
  • The share of Yen and Sterling in reserves is tiny in any group of countries.[8] This means that trends observed using claims in Euro and dollar are still valid.
  • The Hong-Kong's central bank has started to diversify in others currencies since 2007 (it could be asian neighbors currencies, Ruble, Real…). This share currently remains small.
  • The Fed does not claim any asset in Canadian Dollar, or Mexican Peso.
  • The Fed's share of claims in SDR basket currencies in the world represent nearly half of Hong-Kong's one.
  • The growth of claims in SDR basket currencies has suddenly increased (108%) between 2007 and 2011 in US, more than in any group of countries, and even more than Hong-Kong.

People are running faster than bankers

UN and IMF has already published papers about the unavoidable move from US dollar as the world trade reference currency in the following years. Since years, the question is not about IF, but about HOW and WHEN.
From our article's perspective, we can say that the transition period for the US dollar will be fully different compared to the Sterling's one.[9a]
Currently most central banks have only one ideology : how to sustain US dollar reference currency 20 years more, to mitigate their own risks and allow a managed transition towards a (still to be internationally decided) next reference currency or basket of currencies ?
The problem is that the social situation in most countries is so bad[9] that people will never give the time to this 20 years long strategy to maturate and be executed. More and more people in the world become conscious that central banks' interests are opposite to theirs. This will also influence many central banks to not support the strategy decided by the currently leading central banks so far (US and UK).  
This is the main reason why a managed transition to replace US dollar will not take place, and therefore why US dollar will collapse.
The question of WHEN this will take place has already been discussed by LEAP[10] , Lee Adler (see also interview part 2 on ZeroHedge) , Edwin Vieira and others. The collapse is a process which will take some months to complete, not a single day. It  could start as early as in next coming months, or next few years depending on extraordinary monetary decisions (QE3 or similar massive bond purchases, first limited dollar devaluation, tentative short period of hyperinflation...), public results of audit of the Fed or US gold reserves, or massive social unrest in the US.

[1] "The Retirement of Sterling as a Reserve Currency after 1945: Lessons for the US Dollar ?", Catherine R. Schenk, Canadian Network for Economic History conference, 10/2009.
[2] followed by a reference : B. Eichengreen and M. Flandreau, ‘The rise and fall of the dollar, or when did the dollar replace sterling as the leading international currency?’, NBER Working Paper 14154, 2008.
[3] IMF, March 2011 ; At the present, 33 advanced economies and 105 emerging or developing economies report most of their allocations to COFER. Because COFER full data for China mainland are not available, we choose to compare also with Hong-Kong chinese special administrative region data. The "All IMF reporting countries" rows include China mainland figures.
[4] Unallocated reserves represent the total reserves of non reporting countries to COFER, and any discrepancy between countries’ data on total reserves as reported to COFER and to IFS. This covers more than 180 countries.
[5] The SDR was redefined as a basket of currencies, today consisting of the euro, Japanese yen, pound sterling, and U.S. dollar. In the tables, "claims in SDR basket currencies" means the sum of the claims in dollar, euro, Yen, Sterling.
[6], 06/2011.
[7] IMF, 12/30/2010.
[8] It can be estimated as the difference between claims in SDR basket currencies and claims in euros, minus claims in dollar.
[9a] For another graphical view of this transition, we can refer to the US debt to GDP ratio since 1900, and UK debt to GDP since 1692.
[10] "Last warning before the Autumn 2011 shock, when $15 trillion of financial assets go up in smoke” G.E.A.B number 56, Laboratoire Européen d’Anticipation Politique, june 2011.

Update 18th of July 2011 :
This article has already been read by many persons from 46 countries !
Here is a summary of the main readers location :

(clic to enlarge)
Update 20th, 22nd, 25th of July :
added  new countries and significant towns : Bangkok (Thailand), New Delhi (India), Warsaw (Poland), Tunis (Tunisia), Hanoi (Vietnam), Geneva (Switzerland), Ljubljana (Slovenia) for a total of 51 different countries ;  31 states and 114 different towns in the United States.

Update 21st of August :
new total of 55 different countries.

Update 07/26/2013 :
updated data can be found on these pages :

Excerpts from The Gold Basis 

Excerpts from The Federal Reserves's Dashboard

Update 05/19/2014 :
Because of this original article, IMF has finally decided to communicate more transparently about these unallocated reserves (see also here). No, IMF: you do not need to thank me.

World: shares of unallocated reserves

 World and EM countries: shares of unallocated reserves


Le nerf de la guerre monétaire

Voici quelques statistiques sur les réserves officielles en or de certaines banques centrales. J'insiste sur le caractère officiel sachant qu'aucun stock n'est publiquement audité depuis des décennies, et que certaines banques centrales diffusent des informations du style "tiens j'ai recompté mon or et il faut désormais rajouter 180 tonnes à mon total", sans qu'il y ait de mouvement correspondant d'achat ou de vente répertorié : citons par exemple l'Arabie Saoudite en juin 2010, ou l'annonce de l'achat de 454 tonnes d'or par la Chine en avril 2009, qui s'est en fait déroulé de 2003 à 2009.

(clic to enlarge)
Note 5 : Signatories to the third Central Bank Gold Agreement (CGBA) which started in September 2009. The signatories include: ECB, Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland.  Estonia became a signatory upon joining the Euro in January 2011.
La partie droite donne la proportion de la valeur des réserves en or (au cours de l'once à fin avril 2011) dans les réserves totales des banques centrales.
Une rapide synthèse peut en être tirée :

(clic to enlarge)

Au delà de la stratégie propre à chaque banque centrale, on remarque que les banques centrales de la zone euro comptent encore actuellement un bon tiers des réserves mondiales en or, largement devant les réserves officielles US, et très loin devant celles de la zone Chine+Taïwan+Hong-Kong. Dans ces temps de tempête monétaire, il est bon de s'en souvenir.

Sources : World Gold Council, FMI, BCE ; données publiées en avril 2011 à propos des déclarations pour Q4 2010.
This table was updated on March 15, 2011 and reports data available on that date. Data are taken from the International Monetary Fund's International Financial Statistics (IFS) and other sources where applicable. Data are for the end of the period, so data for Q4 2010 represent reserve holdings as at the end of December 2010.
Les données principales sont disponibles dans le fichier "Quarterly_Gold_and_FX_Reserves_Q4_2010.xls" du WGC.


Mise à jour 05/08/2014 :
Il est très significatif que les stocks d'or pour la Libye soient passés de 143,8 t en Q3 2010 à "n.a." pour Q4 2010. C'est pourquoi ce pays n'apparaît pas dans notre tableau ci-dessus. Cet or a disparu des statistiques, pour être effectivement pillé par l'OTAN quelques mois plus tard avec d'autres trésors en or [1234], puis dispersé et revendu sur les marchés de Londres ou NY. On nous annonce aussi que le peuple libyen, dans tous les cas, n'en conservera pas une miette. En août 2011, le Venezuela demande le rapatriement de son or national, avec les conséquences que l'on a suivi depuis lors.
Après le pillage de l'or iraquien, celui de l'or libyen et leurs arrivées brusques sur les marchés apparaissent très clairement sur les taux GOFO.

Update the 22th of July 2011 :
* This article has already been read by many persons from 55 different countries. An amazing audience for a short blog entry written in french !
* 59 countries the 26th of july
* 62 countries the 21st of August

Mise à jour 07/2011 :
ajout du 2ème petit tableau récapitulatif

Mise à jour 05/2011 :
La chine continentale posséderait 1260 tonnes d'or en décembre 2010 d'après un expert cité par MoneyWeek et repris par Chronique Agora. Ça ne modifie pas nos ordres de grandeur pour Q4 2010.


Traitement du signal du 22 mai : hyperinflation

Le traitement du signal, c’est dans notre univers technique la suite d’opérations mathématiques pour extraire de l’information pertinente d’une foule d’observations et de données. L’opérateur donne ensuite un sens, une signification à cette information décantée.

Notre cerveau réalise chaque seconde du traitement du signal pour extraire les informations essentielles de notre environnement. Ce traitement n’est plus seulement mathématique, on en conviendra.
Quand on cherche sur internet, on dit que l’on cherche une information. C’est assez peu souvent le cas, on devrait dire : “j’analyse les données que je trouve, et j’espère en déduire une information”. C’est encore plus vrai quand on se place en position de veille attentive, à l’affût d’un signal. Il est clair que le signal n’est pas une alerte, un ordre ou un commandement que nous recevons et qui porte en lui-même tout son sens, mais qu’il est bien issu de notre propre analyse, de notre réflexion plus ou moins instantanée, qui exploite des repères sémantiques, qui associés entre eux constituent des trames explicatives. Il ne s’agit pas ici de discuter du bien-fondé ou de la réalité de l’existence de cette trame explicative, mais d’en donner un exemple. A défaut, on pourra se contenter du fait que la notion de validité de cette trame correspond à une accroche cognitive préalable et particulière à chacun, qui agit un peu à l’image d’une longue-vue : le périmètre de vision est restreint mais l’acuité y est fortement augmentée. Si vous avez à peu près la même longue-vue, vous pouvez accepter la validité du signal (le sens donné à l’observation), et dans le cas contraire le signal vous paraîtra vide d’intérêt.

Dans le flot de données d’aujourd’hui qui me parviennent, voici sur quoi je me suis arrêté : hyperinflation. Ce terme depuis quelques semaines apparait de plus en plus fréquemment, bien sur à la place de la déflation. Et aujourd’hui sont apparus dans le champ de vision les éléments détaillés de ce qui constitue un scénario économique :
D’abord le cadre technique et historique : “The Weimar Hyperinflation? Could it Happen Again?” qui a servi d’ancrage à ma propre longue-vue, et notamment la phrase “What actually drove the wartime inflation into hyperinflation, said Schacht, was speculation by foreign investors, who would bet on the mark’s decreasing value by selling it short.”;
Puis les différents faits :
L’hyperinflation n’est pas une conséquence d’une évolution mathématique de l’économie, c’est l’issue visible d’une crise de confiance des acteurs financiers qui finit par s’auto-entretenir et s’auto-justifier par l’intervention de la spéculation.
L’issue de cette phase d’hyperinflation me donne à penser à deux autres tendances, qui servent eux aussi d’ancrages :


bourses et devises : petit bilan sur 3 mois

Le Wall Street Journal nous propose une belle carte pour comparer les évolutions des marchés et des devises de certains pays au cours des 3 derniers mois. A voir vite, la carte risque de ne pas être à jour très longtemps à propos des codes couleurs.
Je suis régulièrement les index boursiers d’autres pays (Maghreb, Israel, Luxembourg…). J’en profiterai pour vous ajouter quelques screenshots complémentaires ce soir lors d’une mise à jour de ce billet.
Mise à jour :
Irlande :
image image
Luxembourg :
Suisse :
Belgique :
Hollande :
Danemark :
Malaisie :
Singapour :
Hong-Kong :
Taïwan (sur 1 an) :
Maroc :
Egypte :
Tunisie :
Israël :