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Latin America: Investor News Letter 21.September 2012


Analysis: China worries spur Mexico stock market flows

MEXICO CITY – Mexico has been on the wrong side of China’s economic boom for the last decade, but is now seeing an upturn in its fortunes as the Asian powerhouse’s economy slows and international stock pickers look to hedge their bets.

Can Mexico live up to its investment potential?
Deutsche Bank Downbeat On Brazil In Wake of Intervention; Mexico Retail Sales Up

Mexico, the “Forgotten” Emerging Market


Brazil mulls raising Mexico car trade quota – sources

Brazil is considering raising a three-year bilateral auto trade pact quota it agreed to with Mexico in March, potentially allowing Mexican exporters to sell around $350 million worth of additional vehicles to the Brazilian market annually.

Brazil: PE cools in Brazil, warmes in Mexico and Andes

US urges Brazil in “clear terms’ not to hike tariffs

Brazil reacts to US stimuli saying it will keep the Real ‘devalued’ and competitive

Brazil ethanol returns to US as biofuel rules pave way

Goldman Sachs Plans Private-Equity Comeback in Brazil

Latin America

Colombia rapidly becoming another “positive surprise” from Latinamerica

Uruguay’s economy suffers slight deceleration in 2Q but on track to the 4% target

IMF calls on Argentina to implement measures on the quality of official data

Moody’s changes Argentina rating outlook to negative from stable

Deal Analysis: Panama City Metro Line 1

Gazprom in talks with Argentina’s YPF on LNG supplies

Private equity in LatAm: less new money, more deals

Shadow banking to dominate in LatAm projects

Cuba struggles with foreign investment, growth

China Steps Up Push Into Latin America

Korean Art fair highlights Latin American art

Filed under: Argentina, Banking, Brazil, Central America, Chile, China, Colombia, Energy & Environment, Events, Latin America, Mexico, Peru, Risk Management, Wealth Management, , , , , , , , , , , , , , , , , , , , , , ,

The Demise of the Dollar, Robert Frisk

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

October 06, 2009 “The Independent” — — In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China’s former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. “Bilateral quarrels and clashes are unavoidable,” he told the Asia and Africa Review. “We cannot lower vigilance against hostility in the Middle East over energy interests and security.”

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region’s conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. “One of the legacies of this crisis may be a recognition of changed economic power relations,” he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China’s extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America’s power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China’s growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China’s reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America’s trading partners have been left to cope with the impact of Washington’s control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. “The Russians will eventually bring in the rouble to the basket of currencies,” a prominent Hong Kong broker told The Independent. “The Brits are stuck in the middle and will come into the euro. They have no choice because they won’t be able to use the US dollar.”

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years’ time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

“These plans will change the face of international financial transactions,” one Chinese banker said. “America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.”

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

Source: The Independent, 06.10.2009

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World Bank warning on status of the US Dollar

World Bank president Robert Zoellick has given the United States a warning over the future of the dollar as the world’s key reserve currency.

He said: “The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency. “Looking forward, there will increasingly be other options to the dollar.”

Mr Zoellick will deliver the warning as part of a speech at the John Hopkins University in Washington DC later today (Monday September 28th 2009).

In the speech, he will say that the huge economic changes of the last two decades, which started with the breakdown of Communist economies in the Soviet Union and across Eastern Europe, have seen the emergence of India and China as economic powers thanks to the reforms they made.

Mr Zoellick, who replaced Paul Wolfowitz as World Bank president in 2007, will also call on the G-20 to work as a steering group for international economic co-operation.

He will suggest that countries with emerging economies should be treated as responsible stakeholders by the G-20, while recognizing that many developing nations face the challenge of bringing millions of their citizens out of poverty.

Source: Worldbank, 28.09.2009

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China Takes Aim at Dollar – Update 07.07.2009

Update 07.07.09:   Long live the all mighty US dollar as reserve currency, says China. Chinese Deputy Foreign Minister He Yafei said on Sunday the US dollar would continue to be the world’s leading reserve currency for years to come. The announcement comes before this week’s summit of the Group of Eight in Italy.

Source: MercoPress, 06.07.2009

First published 27.06, 2009: BEIJING — China called for the creation of a new currency to eventually replace the dollar as the world’s standard, proposing a sweeping overhaul of global finance that reflects developing nations’ growing unhappiness with the U.S. role in the world economy.

The unusual proposal, made by central bank governor Zhou Xiaochuan in an essay released Monday in Beijing, is part of China’s increasingly assertive approach to shaping the global response to the financial crisis.

Mr. Zhou’s proposal comes amid preparations for a summit of the world’s industrial and developing nations, the Group of 20, in London next week. At past such meetings, developed nations have criticized China’s economic and currency policies.

This time, China is on the offensive, backed by other emerging economies such as Russia in making clear they want a global economic order less dominated by the U.S. and other wealthy nations.

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However, the technical and political hurdles to implementing China’s recommendation are enormous, so even if backed by other nations, the proposal is unlikely to change the dollar’s role in the short term. Central banks around the world hold more U.S. dollars and dollar securities than they do assets denominated in any other individual foreign currency. Such reserves can be used to stabilize the value of the central banks’ domestic currencies.

Monday’s proposal follows a similar one Russia made this month during preparations for the G20 meeting. Like China, Russia recommended that the International Monetary Fund might issue the currency, and emphasized the need to update “the obsolescent unipolar world economic order.”

[Dollar Dominated]

Chinese officials are frustrated at their financial dependence on the U.S., with Premier Wen Jiabao this month publicly expressing “worries” over China’s significant holdings of U.S. government bonds. The size of those holdings means the value of the national rainy-day fund is mainly driven by factors China has little control over, such as fluctuations in the value of the dollar and changes in U.S. economic policies. While Chinese banks have weathered the global downturn and continue to lend, the collapse in demand for the nation’s exports has shuttered factories and left millions jobless.

In his paper, published in Chinese and English on the central bank’s Web site, Mr. Zhou argued for reducing the dominance of a few individual currencies, such as the dollar, euro and yen, in international trade and finance. Most nations concentrate their assets in those reserve currencies, which exaggerates the size of flows and makes financial systems overall more volatile, Mr. Zhou said.

Moving to a reserve currency that belongs to no individual nation would make it easier for all nations to manage their economies better, he argued, because it would give the reserve-currency nations more freedom to shift monetary policy and exchange rates. It could also be the basis for a more equitable way of financing the IMF, Mr. Zhou added. China is among several nations under pressure to pony up extra cash to help the IMF.

John Lipsky, the IMF’s deputy managing director, said the Chinese proposal should be treated seriously. “It reflects officials’ concerns about improving the stability of the financial system,” he said. “It’s interesting because of China’s unique position, and because the governor put it in a measured and considered way.”

China’s proposal is likely to have significant implications, said Eswar Prasad, a professor of trade policy at Cornell University and former IMF official. “Nobody believes that this is the perfect solution, but by putting this on the table the Chinese have redefined the debate,” he said. “It represents a very strong pushback by China on a number of fronts where they feel themselves being pushed around by the advanced countries,” such as currency policy and funding for the IMF.

A spokeswoman for the U.S. Treasury Department declined to comment on Mr. Zhou’s views. In recent weeks, senior Obama administration officials have sought to reassure Beijing that the current U.S. spending spree is a short-term effort to restart the stalled American economy, not evidence of long-term U.S. profligacy.

“The re-establishment of a new and widely accepted reserve currency with a stable valuation benchmark may take a long time,” Mr. Zhou said. In remarks earlier Monday, one of his deputies, Hu Xiaolian, also said the dollar’s dominant position in international trade and investment is unlikely to change soon. Ms. Hu is in charge of reserve management as the head of China’s State Administration of Foreign Exchange.

Mr. Zhou’s comments — coming on the heels of Mr. Wen’s musing about the safety of China’s dollar holdings — appear to be a warning to the U.S. that it can’t expect China to finance its spending indefinitely.

[The Haves and Have Mores]

The central banker’s proposal reflects both China’s desire to hold its $1.95 trillion in reserves in something other than U.S. dollars and the fact that Beijing has few alternatives. With more U.S. dollars continuing to pour into China from trade and investment, Beijing has no realistic option other than storing them in U.S. debt.

Mr. Zhou argued, without mentioning the dollar by name, that the loss of the dollar’s de facto reserve status would benefit the U.S. by avoiding future crises. Because other nations continued to park their money in U.S. dollars, the argument goes, the Federal Reserve was able to pursue an irresponsible policy in recent years, keeping interest rates too low for too long and thereby helping to inflate a bubble in the housing market.

“The outbreak of the crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system,” Mr. Zhou said. The increasing number and intensity of financial crises suggests “the costs of such a system to the world may have exceeded its benefits.”

Mr. Zhou isn’t the first to make that argument. “The dollar reserve system is part of the problem,” Joseph Stiglitz, the Columbia University economist, said in a speech in Shanghai last week, because it meant so much of the world’s cash was funneled into the U.S. “We need a global reserve system,” he said in the speech.

Mr. Zhou’s idea is to expand the use of “special drawing rights,” or SDRs — a kind of synthetic currency created by the IMF in the 1960s. Its value is determined by a basket of major currencies. Originally, the SDR was intended to serve as a shared currency for international reserves, though that aspect never really got off the ground.

These days, the SDR is mainly used in the IMF’s accounting for its transactions with member nations. Mr. Zhou suggested countries could increase their contributions to the IMF in exchange for greater access to a pool of reserves in SDRs.

Holding more international reserves in SDRs would increase the role and powers of the IMF. That indicates China and other developing nations aren’t hostile to international financial institutions — they just want to have more say in running them. China has resisted the U.S. push to make an immediate loan to the IMF because that wouldn’t give China a bigger vote. Ms. Hu said Monday that China, which encourages the IMF to explore other fund-raising options, would consider buying into a bond issue.

The IMF has been working on a proposal to issue bonds, probably only to central banks. Bond purchases are one way for the organization to raise money and meet its goal of at least doubling its lending war chest to $500 billion from $250 billion. Japan has loaned the IMF $100 billion and the European Union has pledged another $100 billion.

Source: Wall Street Journal, 24.06.2009 Terence Poon in Beijing, James T. Areddy in Shanghai, and Bob Davis and Michael M. Phillips in Washington contributed to this article.

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Asia aims to find its own economic solutions

Plans for a regional free-trade zone, existing currency-swap arrangements and moves towards closer economic cooperation indicate that East Asia is already building a new world structure.

Although the meeting of Asian leaders at Pattaya this past weekend turned into a farce and had to be aborted, it is impossible to ignore either its intentions or the portents.

The richest and fastest growing countries in Asia seem to have looked at the turmoil afflicting the rest of the world and decided that it’s not for them. Instead, they perhaps see this as an opportunity to shift the axis of the world, or rather confirm the centre of the global map to where China has always believed it to be.

A central part of the East Asia Summit, to be held in the Thai resort town of Pattaya at the weekend, was to be the development of plans to set up an East Asia free-trade zone. Leaders of the 10-member Association of Southeast Asian Nations (Asean), plus China, Japan and South Korea, were planning to further “explore ways and means to increase regional trade”, according to a draft statement released on Friday to AgenceFrance-Presse. They were to be joined by the prime ministers of Australia, India and New Zealand on Sunday.

Of course, the meeting was postponed after supporters of former Thai prime minister Thaksin Shinawatra invaded the conference venue in the latest stage of what some refer to as a simmering Thai civil war.

Nevertheless, the intention to establish a pan-Asia free-trade area, which would encompass nearly half of the world’s population, is intact, and a final report of the “second phase feasibility study” is due to be submitted by economic ministers at their next summit in October, said the leaked document. The region-wide zone would build on bilateral arrangements already forged within Asean.

Asia looks to be turning US and European criticisms for building up vast foreign exchange surpluses and maintaining large domestic savings on its head. At the Davos Summit in January, the no longer so great and good tried to shift blame for the West’s spending binge on the cheap money resulting from cash-rich Asian central banks purchasing US Treasury securities, which depressed interest rates and made it too easy for households (as well as investment banks, hedge funds and private equity firms) to borrow cash to buy Asian exports. The temptation was too great, it seems, but it is a tad desperate, even childish, for a spendthrift to blame a prudent saver for supplying the means for his profligacy.

But although most commentators agree that Asian savers need to pick up the slack of reduced US consumer demand, the unintended consequence (from a Western standpoint) might be an Asian block that chooses to go-it-alone. The region’s main concern, after all, is to find and consolidate markets for its exports.

An International Monetary Fund report in February 2008, said that the “importance of exports to the (Asian) region has reached an unprecedented level. While the share of exports in GDP was already high for emerging Asia in 1990, it increased further over the past decade, reaching almost 50% in 2006”. The IMF concluded that “this trend is key to understanding economic developments in the region”.

Asia’s growing share of world trade has resulted largely from increased regional trade integration. While trade flows in the rest of the world roughly tripled between 1990 and 2006, inter-regional trade involving emerging Asia rose by five times, and intra-regional trade within emerging Asia increased by eight-and-a-half times. As a result, trade between the economies in emerging Asia has risen steadily from about 30% of total exports by the region in 1990 to more than 40% in 2006, according to the report.

But the IMF warned that developed economies outside the region remain the main destination of final goods exported by emerging Asia. “Indeed, the exposure of Asian economies to inter-regional exports has actually increased over the past 15 years”, because trade within Asia largely reflects a chain of “vertical specialisation”.

And Michael Buchanan, Asia chief economist at Goldman Sachs, points out that the big drop in Chinese imports from other Asian countries in January this year shows that Chinese consumers have not replaced their US and European counterparts. Instead, he says, a lot of intra-Asian trade still “smells a lot of just supply-chain dynamics” feeding exports to other regions.

But although Asia’s most open countries — Japan, Korea, Taiwan, Hong Kong and Singapore — are set to see their economies contract this year, the rest of the world must look a bit of a mess to Asian eyes.

Eastern Europe is close to bankruptcy; Russia’s post-communist advance appears to have been nothing more than an oil-fuelled boom, and its leadership’s macho posturing has consequently been humbled; Western Europe is ridden alternately with conflict and paralysis as it wonders how best to tackle the recession and how to regulate the new financial order; Latin America is veering towards a recidivist socialism — even Peru’s Maoist Sendora Luminosa guerrillas reappeared last weekend; Africa still looks unstable and poor, but useful as a source of raw materials; while the US’s Armageddon-like crisis of confidence, as much as its financial and economic woes, has undermined its ideological credibility and its leadership credentials.

Amid the chaos, it’s tough to view China’s Delphic suggestions to replace the US dollar with an alternative reserve currency, as anything but mischief-making. The renminbi is hardly a viable replacement: it’s not yet fully convertible and isn’t even legal tender in Hong Kong SAR. Pointing to the IMF’s special drawing rights (SDRs) is surely disingenuous: SDRs are not a real currency, but an IMF accounting unit allocated to countries in proportion to their IMF quotas.

Even China’s insistence on a bigger voice in IMF decisions as a reward for greater financial contributions seems designed to irritate the West and ensure that China won’t have to contribute more cash to the fund. Besides, it’s doubtful whether Asia (at least its wealthier countries) either needs or wants the IMF. More than anything else, the 1997-98 crisis taught Asian countries an important and long-lasting lesson, namely to build up a war chest of foreign exchange reserves to prevent a repeat of the run on their currencies. It was the currency collapse that forced them to turn to the IMF, which then imposed its ruinous dogma of fiscal and monetary austerity, and enforced bank closures and corporate fire-sales to US predators.

Indeed, there is an evolving view in Asia that there are other sources of funding to draw from, given the region’s holding of around $3.5 trillion in foreign reserves. In response to rapidly weakening foreign exchange rates, Asian finance officials agreed in March to enlarge a foreign currency pool to $120 billion from $80 billion proposed last year, to help defend their currencies. The 10 members of Asean plus Japan, China and South Korea had previously pledged to pool bilateral currency swap arrangements under the so-called Chiang Mai Initiative within a multi-lateral fund that could be tapped in emergencies.

Increasingly, Asia is looking like a region set to find its own solutions — not just to the current crisis, but to the inherent structural weaknesses in its economic models. Of course, its success is by no means certain: it is a vast heterogeneous area made up of diverse interests, conflicting world-views and the traditional rivalry between China and Japan. But a free-trade zone, multi-lateral currency agreements and closer cooperation over investment decisions will make the region an even more formidable force than it is already. And it will be a power that doesn’t need to lobby for influence in established multi-lateral global forums or institutions, such as the IMF. Instead, it will acquire de facto dominance, while the rest of the world postures, and huffs-and-puffs like so many President Sarkozys.

Source:, 14.04.2009

Filed under: Asia, Banking, China, Hong Kong, India, Japan, Korea, Latin America, Malaysia, News, Singapore, , , , , , , , , , , , , , ,

The Truth behind the Citigroup Bank “Nationalization”

“Global Research”  Excerpt — The clumsy way in which US Treasury Secretary Henry Paulson, himself not a banker but a Wall Street ‘investment banker’, whose experience has been in the quite different world of buying and selling stocks or bonds or underwriting and selling same, has handled the unfolding crisis has been worse than incompetent. It has made a grave situation into a globally alarming one.

‘Spitting into the wind’
A case in point is the secretive manner in which Paulson has used the $700 billion in taxpayer funds voted him by a labile Congress in September. Early on, Paulson put $125 billion in the nine largest banks, including $10 billion for his old firm, Goldman Sachs. However, if we compare the value of the equity share that $125 billion bought with the market price of those banks’ stock, US taxpayers have paid $125 billion for bank stock that a private investor could have bought for $62.5 billion, according to a detailed analysis from Ron W. Bloom, economist with the US United Steelworkers union, whose members as well as pension fund face devastating losses were GM to fail.

That means half of the public’s money was a gift to Paulson’s Wall Street cronies. Now, only weeks later, the Treasury is forced to intervene to de facto nationalize Citigroup. It won’t be the last.

Paulson demanded, and got from a labile US Congress, Democrat as well as Republican, sole discretion over how and where he can invest the $700 billion, to date with no effective oversight. It amounts to the Treasury Secretary in effect ‘spitting into the wind’ in terms of resolving the fundamental crisis.

It should be clear to any serious analyst by now that the September decision by Paulson to defer to rigid financial ideology and let the fourth largest US investment bank, Lehman Brothers fail, was the proximate trigger for the present global crisis. Lehman Bros.’ surprise collapse triggered the current global crisis of confidence. It was simply not clear to the rest of the banking world which US financial institution bank might be saved and which not, after the Government had earlier saved the far smaller Bear Stearns, while letting the larger, far more strategic Lehman Bros. fail.

Some Citigroup details
The most alarming aspect of the crisis is the fact that we are in an inter-regnum period when the next President has been elected but cannot act on the situation until after January 20, 2009 when he is sworn in.

Consider the details of the latest Citigroup government de facto nationalization (for ideological reasons Paulson and the Bush Administration hysterically avoid admitting they are in the process of nationalizing key banks). Citigroup has more than $2 trillion of assets, dwarfing companies such as American International Group Inc. that got some $150 billion in US taxpayer funds in the past two months. Ironically, only eight weeks before, the Government had designated Citigroup to take over the failing Wachovia Bank. Normally authorities have an ailing bank absorbed by a stronger one. In this instance the opposite seems to have been the case. Now it is clear that the Citigroup was in deeper trouble than Wachovia. In a matter of hours in the week before the US Government nationalization was announced, the stock value of Citibank plunged to $3.77 in New York, giving the company a market value of about $21 billion. The market value of Citigroup stock in December 2006 had been $247 billion. Two days before the bank nationalization the CEO, Vikram Pandit had announced a huge 52,000 job slashing plan. It did nothing to stop the slide.

The scale of the hidden losses of perhaps the twenty largest US banks is so enormous that if not before, the first Presidential decree of President Barack Obama will likely have to be declaration of a US ‘Bank Holiday’ and the full nationalization of the major banks, taking on the toxic assets and losses until the economy can again function with credit flowing to industry once more.

Citigroup and the government have identified a pool of about $306 billion in troubled assets. Citigroup will absorb the first $29 billion in losses. After that, remaining losses will be split between Citigroup and the government, with the bank absorbing 10% and the government absorbing 90%. The US Treasury Department will use its $700 billion TARP or Troubled Asset Recovery Program bailout fund, to assume up to $5 billion of losses. If necessary, the Government’s Federal Deposit Insurance Corporation (FDIC) will bear the next $10 billion of losses. Beyond that, the Federal Reserve will guarantee any additional losses. The measures are without precedent in US financial history. It’s by no means certain they will salvage the dollar system.

The situation is so intertwined, with six US major banks holding the vast bulk of worldwide financial derivatives exposure, that the failure of a single major US financial institution could result in losses to the OTC derivatives market of $300-$400 billion, a new IMF working paper finds. What’s more, since such a failure would likely cause cascading failures of other institutions. Total global financial system losses could exceed another $1,500 billion according to an IMF study by Singh and Segoviano.

Source: Global Research by F. William Engdahl / Information Clearing House 25.11.2008, full article here

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