Free Republic

If you're not familiar with the term "Bretton-Woods" and "Petrodollar", allow me to provide a brief summary. To help fund World War II, the US ratified the Bretton-Woods agreement, essentialy creating Fiat money (tying only a small fraction of Gold to the US Dollar). Since the US controlled 2/3 of the worlds gold, it placed the US Dollar as the world reserve currency and created the ability to print money on demand (then ultimately leading to a complete severing of gold and the beginning of the endless devaluation of the US Dollar) Bretton-Woods was terminated in 1971, and the Petrodollar...

There are three negative supply shocks that could trigger a global recession by 2020. All of them reflect political factors affecting international relations, two involve China, and the United States is at the center of each. Moreover, none of them is amenable to the traditional tools of countercyclical macroeconomic policy. The first potential shock stems from the Sino-American trade and currency war, which escalated earlier this month when President Donald Trump’s administration threatened additional tariffs on Chinese exports, and formally labeled China a currency manipulator. The second concerns the slow-brewing cold war between the U.S. and China over technology. In...

The president is irked by the dollar’s persistent strength, but he shouldn’t blame China or the Fed. This month the Trump administration officially declared China a currency manipulator. This declaration, the latest salvo in the ongoing U.S.–China trade war, came after the Chinese government allowed its currency, the yuan, to fall to its lowest value in a decade. It is now trading at just over 7 yuan to a dollar. The currency-manipulation designation is one of the most unwarranted charges volleyed against China by the Trump administration. The depreciation of the yuan was largely caused by market forces and, by...

Mark Carney, the Bank of England governor, has said that the world’s reliance on the US dollar “won’t hold” and needs to be replaced by a new international monetary and financial system based on many more global currencies.

The U.S. Treasury Department has incorrectly labeled China a manipulator of its currency. An important distinction exists between devaluing a currency and currency depreciation. Devaluing implies the People’s Bank of China actively manipulated the value of the Chinese renminbi to gain unfair advantage for its exports. Depreciation simply means the renminbi has lost purchasing power relative to the U.S. dollar, based on market forces. There’s no indication that China is actively devaluing its currency. However, according to the Treasury Department, China met a broad definition of manipulation laid out in the Omnibus Trade and Competitiveness Act of 1988, which says...

The Dow tumbled 875 points and global stocks were in disarray on Monday after China escalated the trade war with the United States. The Chinese government devalued the yuan to fall below its 7-to-1 ratio with the US dollar for the first time in a decade Monday. A weaker currency could soften the blow the United States has dealt China with its tariffs. The weak yuan ignited fear on Wall Street that a currency war has begun or that the United States would respond with even higher tariffs, prolonging the standoff with China and potentially weakening the global economy. Investors...

The decline of China’s yuan on Monday to its lowest level in 11 years against the US dollar could continue into 2020 amid the apparent shift in its policy stance by the Chinese authorities, who are showing increasing reluctance to provide concessions to resolve its trade war with the United States. The Chinese currency’s drop has also rattled the currency market, sending 11 regional currencies lower. The yuan slid 1.3 per cent to 7.0298 against the dollar on Monday in response to President Donald Trump’s threat to impose a new 10 per cent tariff on the US$300 billion of Chinese...

He was the only person to sign all four of America's founding documents: -Articles of Association-1774, -Declaration of Independence-1776, -Articles of Confederation-1777, -U.S. Constitution-1787. Who was he? Roger Sherman. At age 19, Roger Sherman's father died and he supported his family as a shoe cobbler, helping his two younger brothers to attend college and become clergymen. Roger Sherman was a surveyor and merchant, but when a neighbor needed legal advice, he studied to help, only to be inspired to become a lawyer. Sherman was elected a state senator, a judge and a delegate to the Continental Congress. He was on...

There are many takes on the Facebook roll out of a new cryptocurrency called Libra. Most experts in the field have mixed feelings about this new attempt to provide an alternative to fiat currency. There are some good and bad qualities of this new product. The good is that Facebook is providing yet another alternative to fiat currency. Anything that disrupts the central bank and provides alternatives for consumers to pay for products will disempower banks and the Federal ReserveÂ’s monopoly over currency. One of the great qualities of cryptocurrency is that power is being pulled away from the big...

Facebook has secured the backing of over a dozen companies for its upcoming Libra cryptocurrency set to be announced next week, The Wall Street Journal reports. These companies include major financial organizations like Visa and Mastercard, and internet darlings like PayPal, Uber, Stripe, and Booking.com. Each will invest around $10 million to fund development of the currency, and will become part of the Libra Association, an independent consortium that will govern the digital coin independently of Facebook.

The Supreme Court rejected a case Monday brought by an atheist who wanted to scrub “In God We Trust,” the U.S. motto, from the nation’s currency, claiming it was an entanglement of state and religion. Michael Newdow, an activist who previous challenged reciting the Pledge of Allegiance in schools, had set his sights on money, but lost at the district, circuit and now Supreme Court levels. On behalf of a group of atheists, Mr. Newdow argued America’s money lacked an reference to God until 1864, when it was added in. He said that amounted to an endorsement of religion.

US Treasury Secretary Steven Mnuchin on Saturday accused China of allowing the value of its currency to slide in a bid to offset the impact of Washington’s trade tariffs on the cost of its goods to American consumers. “It’s not coincidental in my mind that the currency has moved from approximately 6.30 [yuan to the US dollar] to 6.90,” the official said on the sidelines of the G20 finance leaders’ meeting in Japan. (Please see link for full article)

Anti-slavery activist Harriet Tubman won’t appear on US currency for nearly a decade, Treasury Secretary Steven Mnuchin said Wednesday. An image of Tubman, a former slave who helped others escape to freedom through the Underground Railroad, was supposed to replace President Andrew Jackson on the $20 bill next year. “The primary reason we’ve looked at redesigning the $20 bill is for counterfeiting issues,” Mnuchin said in front of Congress on Wednesday. “Based upon this, the new $20 bill will now not come out until 2028,” he added. President Trump criticized the plan to replace Jackson on the note during the...

Look at the dollar bills in your wallet. They say they are "legal tender for all debts."But are they? What makes them valuable? What makes them worth anything?Each bill says, "In God We Trust." But God won't guarantee their value.The $20 bill depicts the White House. Congress is on $50s. But neither guarantees the value of our dollars.I wouldn't trust them if they did. I don't trust politicians, generally, but I especially don't trust them with money. Since President Richard Nixon took the U.S. off the gold standard, the dollar has lost 80 percent of its value.So what makes money...

The yuan’s recent slide risks re-igniting one of U.S. President Donald Trump’s favorite criticisms of China: that Beijing weakens its currency to aid exporters. While analysts say the exchange rate is being driven by souring market sentiment as China’s economy slows and the U.S. ramps up tariffs, the slide towards 7 against the dollar comes during crunch trade negotiations. The offshore yuan has fallen almost 3% this month, making it the worst performing currency in Asia, and the onshore yuan broke the 6.9 level on Friday for the first time this year.

China’s currency has been an important barometer for progress in U.S.-Chinese trade talks, and right now it’s signaling that things aren’t going well. The question is whether that signal is intentional, and whether Chinese officials will step in to prevent the yuan from reaching a key psychological low of 7 to the dollar. That level has become a line in the sand for markets around the world, and if broken, it could trigger a negative reaction in risk markets globally, as investors move to price in a bigger economic impact from a longer, more contentious trade war. The yuan has...

Facebook Inc. is recruiting dozens of financial firms and online merchants to help launch a cryptocurrency-based payments system on the back of its gigantic social network.

Global capital is flooding into U.S. markets as many traders return from a long holiday weekend. Traders woke up to news that China may be reeling in its stimulus measures and that President Trump is vowing to reciprocate EU tariffs. Despite these potentially ominous headlines, the U.S. economy remains one of the few seeing steady growth, and traders are piling into U.S. assets. 1) US Dollar Index Tests 10-Month Highs As we noted last week, the U.S. Dollar index has formed “a large ‘ascending triangle’ pattern, which could foreshadow an explosive rally if the 97.70 barrier is eclipsed.” Rates peeked...

An instantly recognizable artwork—Katsushika Hokusai’s woodblock print The Great Wave off Kanagawa—is set to appear on Japan’s 1,000-yen banknote. Just one of several new designs announced—others including images of industrialist, Eiichi Shibusawa; educational reformist, Tsuda Umeko; and more—the Hokusai note will depict Nobel Prize-nominated bacteriologist Shibasaburo Kitasato on the other side. The new designs will be circulating by 2024.