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Friday, May 29, 2015

Monday, May 25, 2015

Too Early For Yuan to Replace U.S. Dollar

There has been a lot of speculation concerning the goal and strategy of China concerning the place of the yuan or renminbi on the world economic stage.

I have no doubt the Chinese have a goal of becoming the leading reserve currency in the world, but if that ends up being a reality, it's going to be many years from now.

The idea that China is attempting to bypass the existing currency market and working to build an alternative to it is actually the exact opposite of what it really wants to do, which is to become a larger player in the current global economy.

For now, the yuan isn't close to being ready to be a currency leader, as China needs to take a number of steps before it's going to be considered a means of paying for major transactions on a global basis.

China's first step will be to push to be accepted as a reserve currency at the International Monetary Fund. In October the IMF will convene to review, among other things, whether or not to include the yuan in Special Drawing Rights group of reserve currencies. This review only occurs twice over a 10-year period, so it's important for China to get this done; which I think it is likely to accomplish.

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Friday, May 22, 2015

Turquoise Hill Won't Remain This Cheap for Long

It's been a long time coming for Turquoise Hill (NYSE:TRQ) and Rio Tinto (NYSE:RIO) concerning their stake in the massive Oyu Tolgoi, as they have finally come to an agreement with the Mongolian government to move ahead with its development of the next phase of the mine, which is to expand the major underground portion of the resource, which at this time, is estimated to account for approximately 80 percent of the mineral value of the mine.

Major sticking points which led to the differences have been resolved, including cost overruns and taxes.

With that behind them, the next areas to approve and make transparent will be an underground feasibility study and project financing. There is little to suggest there will be a problem in those areas, so it appears Turquoise Hill should fairly quickly be able to move operations forward.

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Monday, May 11, 2015

The War on Cash and Some Ways to Play it

I've been somewhat surprised at the relatively low level of resistance to the proclivity of governments and the banking system to move rapidly toward a cashless society.

When looking through comment sections of blogs and news sites, one of the major responses to the concerns is people from the U.S. will allude to the words on our currency that says it's a "legal tender," as if that will stop the forward motion of what has become a global initiative in many nations.

Immediately below is a list of the reasons I have been able to find as to why we should move towards a cashless society. They are from a variety of nations, and not all are given as reasons from any one country.
Stated reasons:

    Fight terrorism

    Tax evasion

    Black market

    Costs of currency production

    Improve credit rating of country (Uruguay)

    Encourages underground economy

    Money laundering

    Reductions in armed robbery

    Counterfeiting


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