As someone who worked in the oil industry on the trading front, I would like to point out that Iranian oil imports/exports has not been denominated in US dollars for a long long time. So the "bilateral" nature of any oil trade involving Iran, and middle east (dubai and jebel ali are transshipment zones, sometimes for iranian material) is nothing new.
But the rest, yes perhaps we are seeing a challenger to the USD but obviously many hurdles to clear.
(18-09-2012, 01:03 PM)arthur Wrote: [ -> ]What matters is how are the countries of the world moving ahead and what can we do to protect firstly, then grow our capital.
So, for those of us who invest mainly (if not all) in non-US stocks, what should we do / avoid?
If there's going to be a gradual world-wide shift in the use of USD to another, like RMB as a trade currency, what'd be the negative impact on SGX listcos? Unless they're holding a lot of USD, it may even be positive to do their biz using a widely accepted non-USD trade currency that does not continue to decline in strength?
(18-09-2012, 02:11 PM)KopiKat Wrote: [ -> ]So, for those of us who invest mainly (if not all) in non-US stocks, what should we do / avoid?
If there's going to be a gradual world-wide shift in the use of USD to another, like RMB as a trade currency, what'd be the negative impact on SGX listcos? Unless they're holding a lot of USD, it may even be positive to do their biz using a widely accepted non-USD trade currency that does not continue to decline in strength?
Hi KopiKat
You are correct to point out China is encouraging various countries to utilise Yuan as the main trading currency. This allows a slow progression/ transition towards another world reserve currency as well as being able to control the monetary flows to a certain extent.
With regards to the negative impact on SGX listcos, I would think they should be hedge to a certain extent. Not too sure about smaller listed cos though.
In any case, I am not proclaiming a complete collapse of USD$. Not even China would allow that. What I am seeing is a slow but steady progress of having another world reserve currency(s?) moving up.
Personally I believe and I stick to SGD denominated investment instruments.
The rating agencies labeled us as one of the last six AAA sovereign rating countries in the world, that is surely some feat.
I agree that Yuan liberisation will take time to float. And changing of world empires will take time (decades at min) and historically, bloodshed, for the transition to be completed.
Hopefully the last thing mentioned I would be very wrong on it. There is nothing great or glorious about wars.
We are a small nation, we do not have the military might nor the economic clout to affect the world geopolitical situation.
However what the incumbent govt has done thus far, to secure our monetary ratings, I have to grudgingly give them the thumbs up.
Some friends in the banking industry have told me that we are heading towards becoming the Asia foremost wealth management hub.
I believe this would agur well for our currency strength. But in terms of inflation or std of living wise, I have no good comments on it though.
Perhaps I might add on something else this evening.
Cheers.
(18-09-2012, 02:47 PM)arthur Wrote: [ -> ] (18-09-2012, 02:11 PM)KopiKat Wrote: [ -> ]So, for those of us who invest mainly (if not all) in non-US stocks, what should we do / avoid?
If there's going to be a gradual world-wide shift in the use of USD to another, like RMB as a trade currency, what'd be the negative impact on SGX listcos? Unless they're holding a lot of USD, it may even be positive to do their biz using a widely accepted non-USD trade currency that does not continue to decline in strength?
Hi KopiKat
You are correct to point out China is encouraging various countries to utilise Yuan as the main trading currency. This allows a slow progression/ transition towards another world reserve currency as well as being able to control the monetary flows to a certain extent.
With regards to the negative impact on SGX listcos, I would think they should be hedge to a certain extent. Not too sure about smaller listed cos though.
In any case, I am not proclaiming a complete collapse of USD$. Not even China would allow that. What I am seeing is a slow but steady progress of having another world reserve currency(s?) moving up.
Personally I believe and I stick to SGD denominated investment instruments.
The rating agencies labeled us as one of the last six AAA sovereign rating countries in the world, that is surely some feat.
I agree that Yuan liberisation will take time to float. And changing of world empires will take time (decades at min) and historically, bloodshed, for the transition to be completed.
Hopefully the last thing mentioned I would be very wrong on it. There is nothing great or glorious about wars.
We are a small nation, we do not have the military might nor the economic clout to affect the world geopolitical situation.
However what the incumbent govt has done thus far, to secure our monetary ratings, I have to grudgingly give them the thumbs up.
Some friends in the banking industry have told me that we are heading towards becoming the Asia foremost wealth management hub.
I believe this would agur well for our currency strength. But in terms of inflation or std of living wise, I have no good comments on it though.
Perhaps I might add on something else this evening.
Cheers.
Even a layman (me) understands this "Little Red Dot" really has nothing but a few million in population. If our $ is allow to depreciate in value like Malaysia, i think our inflation will be ???? how many times more than Malaysia. As it is now, it is really quite costly eating at "HDB's Hawker Centre." Especially in respect to low wage earner's income.
i don't think we ever have a choice like Malaysia.
We can't depreciate our $ like most countries do.
This means most of us have to "work" till we die.
I don't think they will dump the dollar just yet, I mean china is big and powerful but definitely not ready to take on uncle sam and his allies, besides they still get a lot of benefits in terms of job exports to china and china can sell things back to US which have been enriching china people for several years at the expense of americans citizens I might add, imagine that suddenly stopped imagine the US congress started seeing china as a threat and blocked china now. The chaos will on the scale Tiananmen all over again where people have no jobs no money they will just turn on the chinese government.
They can say they are doing this protect their own domestic trade but they cannot say they want to dtich the dollar, if they did that the repercussion will ripple thru the whole world and everybody will head for the exit and ditch the dollar it will become an event that is unstoppable and china japan singapore whoever holding big amounts of US treasuries will have tons of toilet paper in the vaults instead it will be unstoppable and irreversible it will be the biggest undoing of china if they ever did that now.
To wean themselves off the US currency they need to do this slowly china need to make it's currency tradable and allow people to buy and sell their chinese treasuries but so you see everybody wants this but china is the one that don't want this to happen so soon.