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Author Topic: Money, the Fed, Banking, Monetary Policy, Dollar & other currencies, Gold/Silver  (Read 209329 times)
G M
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« Reply #950 on: October 12, 2017, 11:03:39 AM »

I just forwarded that to Scott Grannis. Let's see what he says.


I look forward to his response.
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Crafty_Dog
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« Reply #951 on: October 12, 2017, 11:07:12 AM »

________________________________________
The Producer Price Index Rose 0.4% in September To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 10/12/2017

The Producer Price Index (PPI) rose 0.4% in September, matching consensus expectations. Producer prices are up 2.6% versus a year ago.

Energy prices rose 3.4% in September, while food prices were unchanged. Producer prices excluding food and energy rose 0.4%.

In the past year, prices for goods are up 3.3%, while prices for services are up 2.1%. Private capital equipment prices rose 0.4% in September and are up 2.5% in the past year.

Prices for intermediate processed goods rose 0.5% in September and are up 4.3% versus a year ago. Prices for intermediate unprocessed goods declined 0.4% in September but are up 7.0% versus a year ago.

Implications: The impact of Hurricane's Harvey and Irma can be felt throughout today's report on producer prices. The most significant impact from the storms was on supply chains, where increased demand for machine and equipment parts, paired with a limited supply, pushed up margins to wholesalers. Meanwhile storm-related refinery shutdowns along the Gulf Coast led energy prices 3.4% higher in September, including a 10.9% jump in gasoline prices. Food prices, however, showed little impact, unchanged in September and down at a 0.5% annual rate in the past six months. Looking beyond food and energy, "core" prices rose 0.4% in September. In addition to higher wholesaler margins, most major categories of goods and services also rose in September. In the past year, producer prices have increased 2.6%, the largest twelve month rise since early 2012. This is certainly elevated in September by the hurricanes, but producer prices have been at or above 2% on a year-to-year basis in seven of the last eight months. And a look further down the pipeline shows the trend higher should continue in the months to come. Intermediate processed goods rose 0.5% in September and are up 4.3% from a year ago, while unprocessed goods declined 0.4% in September but remain up 7.0% in the past year. In other words, the "data dependent" Fed has clear evidence that inflation has met or exceeded their 2% target. In employment news this morning, new claims for unemployment benefits declined 15,000 last week to 243,000, while continuing claims fell 32,000 to 1.89 million, the lowest level since 1973. The temporary storm-related dip in employment looks to have passed, and we expect a very strong rebound in payrolls in October.
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DougMacG
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« Reply #952 on: October 12, 2017, 11:36:42 AM »

Or else?!  They will buy their oil from the US?  Venezuela (Venezuelan Bolívar)?  Japan, lol.
Maybe Russia, which of these countries needs a flood of Yuan for their consumer purchases?  Angola?

If they partner up with Iran, how 'bout we do the same with Taiwan?

Does anyone remember when over-reliance on unreliable oil sources was a finance and national security nightmare - for the importer?

http://dailycaller.com/2016/03/21/china-buying-lots-of-oil-from-saudi-arabia-iran-and-russia/
China surpassed the United States as the world’s largest net importer of petroleum in 2013. Within the next few decades, it is expected to buy roughly 70 percent of its oil from foreign sources, much of which will come from countries known for instability. Sudan alone provides 7 percent of China’s oil imports, and over one-third of Chinese oil imports come from Sub-Saharan Africa. Some of China’s largest oil suppliers are Angola, Sudan, Nigeria, and Equatorial Guinea, which are all known for political instability.

“Iran could also be a big supplier to Beijing in the months and years to come, as well as a partner that Tehran could call on to supply important loans, technology, and resources to develop Iran’s oil and natural resource sectors,” Kazianis concluded.

China is already heavily investing in Iranian oil, according to The New York Times and has been Iran’s largest trading partner for six years in a row. The two largest suppliers of Chinese oil, Russia and Saudi Arabia, are politically stable but are involved in Middle Eastern conflicts. China prefers to avoid being drawn into such confrontations, especially given recent tensions with its own Muslim minorities.

-------------------

Let's see what Scott G says.  It seems to me that:  a) none of these countries were using the US$ by choice.  They used it because it was in their best interest to do so.  If so, then switching makes them worse off.  b) Currency is a medium of exchange, doesn't change underlying fundamentals.
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Crafty_Dog
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« Reply #953 on: October 13, 2017, 12:18:58 PM »

Can’t see how this will make much of a difference. Money is fungible. The value of the dollar is determined not by transactional demand for oil, but for by the demand to hold dollars.

On Oct 12, 2017, at 12:59 PM, Marc Denny <craftydog@dogbrothers.com> wrote:

https://www.cnbc.com/2017/10/11/china-will-compel-saudi-arabia-to-trade-oil-in-yuan--and-thats-going-to-affect-the-us-dollar.html
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