Posted on 08/31/2018 5:37:21 AM PDT by Texas Fossil
Stock markets dropped Thursday on profit-taking after a recent run higher on optimism on trade deals, and news on more US tariffs on China, while Argentina's peso and the Turkish lira tumbled.
The peso slumped to a new record low, prompting Argentina's central bank to raise its benchmark interest rate to 60 from 45 percent in a bid to arrest a slide in its value.
The drop came even after the International Monetary Fund's agreed to consider Argentina's request to speed up payments under its $50 billion loan.
The peso fell 13 percent against the US dollar, taking its losses to 20 percent for the week, and about 45 percent since the beginning of the year.
"In a context of continued global dollar strength, markets seem to have no mercy for the Argentine peso," JPMorgan said in an analysis.
"While it's hard to make a call in a 'panic scenario' ... we are concerned about the medium-term implications of the policy actions triggered by recent volatility."
Meanwhile, the Turkish lira suffered fresh losses, losing three percent against the dollar, as a deputy central bank governor resigned.
The lira has lost nearly 45 percent of its value against the dollar since the beginning of the year, which led economists to warn of a full-blown recession.
(Excerpt) Read more at yahoo.com ...
Turkey has expressed interest in doing the same thing.
Both nations are now dictatorships. Venezuela is a Marxist Dictatorship and Turkey is a Islamist Fascist Dictatorship.
Birds of a Feather?
Totalitarianism in all forms is EVIL! May God help the citizens of both nations.
The article is about Argentina.....
The drop came even after the International Monetary Fund’s agreed to consider Argentina’s request to speed up payments under its $50 billion loan.
The peso fell 13 percent against the US dollar, taking its losses to 20 percent for the week, and about 45 percent since the beginning of the year.
...
This is being triggered by the Federal Reserve manipulating the interest rate market.
Another reason why FReepers shouldn’t embellish the titles.
Triggered? Yes.
Caused? By Maduro the Incompetent Marxist Dictator.
Is Trump responsible for the strong dollar? would it hurt these “economic analysts” to ever just once give him credit?
proudly not reading articles since 1993.
My mistake.
I posted 2 articles about financial collapse. The first one involved Venezuela (total basket case).
Venezuela arrests 131 accused of economic sabotage
https://www.yahoo.com/news/venezuela-arrests-131-accused-economic-sabotage-224652708.html
FR Comments: https://www.freerepublic.com/focus/f-news/3683715/posts
Stocks rally hits pause, peso and lira tumble (VenezuelaArgentina, Turkey)
https://www.yahoo.com/news/asian-markets-mixed-investors-fail-pick-wall-st-030802569—finance.html
FR Comments: https://www.freerepublic.com/focus/f-news/3683717/posts
sorry
Unfortunatly, It flies in the face of their perception to give Trump credit for anything.
I know, I know.....
What’s interesting is that the economies of Venezuela and Argentina are in distress.
Argentina has an elected government rather than an elected dictator.
As another FReeper responded, the article is mainly about Argentina.
The Federal Reserve manipulating interest rates is causing problems around the world.
Who reads past the title
OK, possibly I don’t understand that mechanism.
I do know how the Fed operates, and I admit at first glance I thought this was Venezuela again. Not pleasant thing to admit, but skim reading is a product of assuming things. I was not aware of Argentina’s problems.
Thank you for making that point. I was aware that Argentina was a more democratically elected. But it has the Peronista history. Not exactly like most Western Democracies.
Must admit, after the mess we have experienced for the past 2 years, our Judicial and Federal Law Enforcement has not been very constrained by the rule of law either.
>> Another reason why FReepers shouldn’t embellish the titles.
In most all cases, an addition IN BRACKETS - i.e., [Argentina, Turkey] is helpful. Brackets (unlike parens) clearly show that “I’m not part of the original title”.
This comes in handy when you read a “Deadly Day in Milan” headline. It could be Milan, Italy, or Milan NY, TN, IL, or WA.
Of course, the poster slipped a cog and said “Venezuela” rather than Argentina.
OK, possibly I don’t understand that mechanism.
I do know how the Fed operates, and I admit at first glance I thought this was Venezuela again. Not pleasant thing to admit, but skim reading is a product of assuming things. I was not aware of Argentina’s problems.
...
All of these developing countries have debt denominated in dollars. When the Fed raises rates these countries have problems paying the debt with their own currency because it is weakening against the dollar. The dollar is rising because the Fed is raising rates.
Yes, most of these countries have fundamental problems. But when they all start having problems at the same time due to the actions of the Fed, it becomes a crises.
The bottom line is interest rates should be determined by the market, not the Federal Reserve.
I like the BRACKETS idea, but it’s almost always parentheses, and it’s a big problem when the added info is wrong, since 90% of commenters don’t read past the title.
Agree. But Fed rate fixing is not lock step. Banks go the Fed window for "Very" short term money. The Fed does not originate deposits themselves. Long term money is provided by investors. There was a time when many Texas banks self financed from the oil industry. I remember what was done in the collapse of the Republic Bank (on the charter called: The Republic of Texas). NE Money centers were like vultures, they hated how Texas banks operated. Too free.
Federal Reserve discount rates are a leading factor but do not actually control interest rates charged by specific banks. Now, as far as nations are concerned, I'm less sure how the mechanics work. I've not heard much lately about the Export/Import Bank and their policies. Think I heard they were very active in Central and South American activities. There were large problems with corruption in that bank during Obama.
The rates that the FOMC sets for practical purposes do have a direct effect on the money supply, short term yields, short term interest rates and the strength of the dollar. Raised high enough they have caused recessions, crashed the stock market, and triggered global financial problems.
So yes, the Federal Reserve does manipulate the markets, something Conservatives should be against.
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