Bank of Guyana Stops Buying $TT

[desifemlove]

Raising the dollar? why? the current regime is OK, and raising it could stoke up inflation. more inflation means a higher interest rate.

just to be clear, are you saying that, in your opinion, an increase in value of the TT$ would cause increases in inflation as well as higher interest rates?

econ 101, dope....

[desifemlove]

https://en.wikipedia.org/wiki/CARICOM_S ... my#Phase_1

Like people like to be right, not understand basic points, terminology, and have projective thinking...haha.

[88sins]

Desi from your posts here I have come to realize something.
Seems you really believe that home economics class you took in school applies in the situations being discussed here.


Just a heads up. It don't.

[bluesclues]

Bluesclues says:

There is no shortage of usd. The problem is countries like ours who are mismanaging the economy and running the value of our currency into the ground.. CANNOT AFFORD.. to buy usd at the rates weve grown accustomed to. IT IS WE who have the shortage... of ttd!

At least you consistent in your accuracy

If the USD has been appreciating against most major currencies ....where would you store cash?
where would you prefer to denominate your holdings....
demand/supply.


http://www.businessinsider.com/dollar-d ... ld-2016-11


http://mumbaimirror.indiatimes.com/colu ... 031008.cms

This global flow of dollars back to USA is creating a sort of dollar shortage worldwide, making the dollar very expensive i.e. strong. Most other currencies have lost out, and may become weaker in 2017. The dollar index (which measures the strength of the US dollar against the major currencies of the world) is at a 14 year high. It looks like it will continue to go higher.

https://www.bloomberg.com/news/articles ... ast-resort

That's the prognosis from Credit Suisse AG Director of U.S. Economics Zoltan Pozsar, who contends that the U.S. central bank needs to take a much more activist approach to ensuring adequate availability of the world’s reserve currency in light of recent regulatory changes that have raised bank funding costs and constrained sources of dollar funding.

https://www.bloomberg.com/news/articles ... r-shortage

Trump's surprise win in the U.S. presidential elections has set the stage for an intensification of the dollar-funding crunch which has been plaguing markets and was most recently highlighted by the Bank for International Settlement's Hyun Song Shin and Economist Carmen Reinhart

Exacerbate:
to increase the severity, bitterness, or violence of (disease, ill feeling, etc.); aggravate.

Which means it exists arredy.

seeya pumkin

Ahahaha.. u go ahead believing these sales pitch. U must also read with meticulous understanding. Not every article u read published or quoting a professional in the field is an accurate assessment. Try not to be so gullible.

Note the words... 'A SORT OF shortage'

Understand also what the words 'the flow of usd back into america' represent. Think for 1 second what causes the flow to move in that direction. If buying usd makes the flow direction 'out of usa'. Then what direction will SELLING USD create?

It is all illusory statements and incomplete analysis which brought the perspective uve posted from these articles. Not the first time i have assessed economic environments before and more accurate than world reknown experts. This again because u dont trust what experts say in the media.. it is always slanted to manipulate perceptions so that they and their investors will benefit from people's expected reaction upon hearing and accepting that point of view.

Let me offer anther point of view. Let us not forget that usa is 20 trillion in debt and a few of those trillions are owed and were brrowed from china.

The us dollar is artificially holding value.
The usd is overpriced
Other countries dollars are losing value due to economic downturns
Usa is also in a downturn but it's currency is being propped up artificially

My view is that it is unsustainable, and a failure on the part of the usa if the world cannot afford to use it's currency. It will thus begin to lose its market share with regards being used as a world reserve currency. The value of usd MUST FALL to maintain and grow its currently dwindling market share. At this stage, the longer it stays at an artificially high rate, the greater the negative impact it will have and lead to even greater weakening of their currency.

Now let's take a look at this from another perspective. Can it not be seen that as a result of a SLOWDOWN in the purchase of usd across many countries, that this can also be translated as .. usa is LOSING INVESTORS in it's currency? I mean isnt that an accurate perception also? Isnt the usa losing it's grip if people are no longer going to use it's currency and purchase at a much lower rate than they did in previous years? So what is demand and what is supply.

Its just not cut and dry. People may 'want' usd, and that is a sort of demand yes, but if theyre NOT ACTUALLY BUYING then that is a failure of demand. Meaning the true demand is reduced.. NOT INCREASED.

U unnastand the pitch i showing you? Perspective and perception.

So regardless of the perspective on your post, there are many negative factors engaging the us ecnomy right now that have been putting dwnward pressure on their dollar. As far as im concerned.. what those articles have said is that, the usd hasnt declined... YET. And while it is holding at this point, it will seem resillient. But there is nothing, i repeat nothing, that justifies usd holding value while other currencies lose value across the world. And as i said. It will eventually become strategic and beneficial for the usd to lose value to regrow it's market share.

At the end of the day... usa:ttd exchange rate is still 6.20 in foreign. So again. Trinis are being exploited by price gouging due to a manufactured shortage of usd locally. U could wake up one morning to a sliding usd that may go as low as $4:1ttd. And THAT is another reason for many countries to slowdown their purchasing of usd for storage or longterm investment. U dont want to be holding billions in usd as an investment only for it to lose 30% of it's value. U want to just buy and use what u need until the bamboo sticks that are propping it up fall out and then u buy at the bottom. Basic investment strategies.

[Redman]

But there IS a shortage.
See local situation.
see the USD vs other currencies...more demand vs supply.


You said there is no US shortage..
Ive shown several links to articles that in discussing peripheral issues show a dynamic in play.
Which indicates there are global issues

for the last year the USD is the only game in the major currencies that is appreciating...
Which irrefutably means more buyers than sellers.
Actual buying

Keep Russia,China Iran and Saudi in view...as they begin to establish major trading platforms in oil and gold that by pass the need for USD as a petrodollar /reserve currency.

We all are in the middle of a sea change....

[bluesclues]

while ppl paying $7 and $8 for 1 usd thirsty thirsty thinking it going to go up... poof. Bottom will fall out from under them and the value drop to $5.

The only issue we are really facing is that we dont have alternative means of acquiring usd except through state organisations and so we have to pay the price they give us locally.

There are alternative ways of gaining usd.. at and below market rates currently. Just not bank, not airport and not blackmarket locally. I store my money so that it is liquid. I can cashout or hold in any currency i choose including the yuan.

But redman.. dnt try to tell me... because nobody buying yuh redbricks at yuh hardware that mean demand high so u hafta raise your price.. lmao.

P.s. this is a late post meant to be posted since before tuner went down 2:30 this morning.

[bluesclues]

But there IS a shortage.
See local situation.
see the USD vs other currencies...more demand vs supply.


You said there is no US shortage..
Ive shown several links to articles that in discussing peripheral issues show a dynamic in play.
Which indicates there are global issues

for the last year the USD is the only game in the major currencies that is appreciating...
Which irrefutably means more buyers than sellers.
Actual buying

Keep Russia,China Iran and Saudi in view...as they begin to establish major trading platforms in oil and gold that by pass the need for USD as a petrodollar /reserve currency.

We all are in the middle of a sea change....

I will maintain that there is no shortage of usd for those who can afford to buy it in amounts that meet their needs.

about usd appreciating? This is wrong. The usd hasnt appreciated so much as all other currencies fell. What has actually happened is the usd has maintained it's value in offset while other currencies lost value and were forced to record the depreciation. This is why i say... it's time will soon come. It's been delayed by clever accounting and negotiating power. But that cant hold forever. It is also much much more important to the Fed, that the usd increases it's global market share. Which is another indicator that if the fed wants to maintain its mission, then manually adjusting the usd value downward will be on the table because im not sure what more leverage the usa has at this point in time to maintain that value in the face of a 20trillion dollar debt.

If Ppl not buying usd, whether it is because they can no longer afford it, they have to manage with less of it because theyre not making enough to spend as before, or their available capital can now purchase 20% less than it could before due to a drop in value of their local currency.... this translates as a reduction in true demand. That creates an environment as u started pointing out that makes ppl start seeking to create and facilitate alternatives. THAT is not good for the fed's mission. So they will have to do something about it. As china has done, many times before, manually adjusting the yuan downward allowing them to take more market share as a reserve currency.

The supply and demand chain ur pointing out is just a shadow of the real situation. Buying usd is true demand. True demand is an investment in a currency. Thing is that, though it is true that 'Scarcity Creates Demand'. In this situation, scarcity creates a loss in market liquidity. And that eventually translates as a loss in investment value. Countries cannot run if they cant get enough usd to. If usa's customers become poor, then it will be losing business... bigtime. So it is in it's best interest, to facilitate the circulatory design and intention of capitalism in international business and maintain the flow of demand. Im talking switches and levers here.

Remember this isnt a closed environment of a businessplace on the street corner interacting with the townsfolk. This affects the entire global organism which has invested heavily in and grown used to depending usd for international business. If it becomes a matter of there not being enough dollars to go around(true scarcity), then we would just employ alternatives... like the yuan. Which would now then be receiving an increase in true demand. While usd loses from it's current customerbase.

[Miktay]

it is active. some countries have opted out, but T&T hasn't. the basic fact it exists undermines sovereignty. I agree it's not like the EU, but then there is some pooling of sovereignty, responsibilities and abilities.

I dont know where u get ur information frm DFL...but youre lost and wandering in the forests of the Northern Range.

do you know what national sovereignty is or means? if the T&T government cannot prevent a Bajan doctor from coming here, how is that sovereignty?

Youre mixed up DFL. Youre no longer wandering in the forests of the Northern Range. Youre bogged down in the Nariva swamp.

The T&T government cannot prevent a qualified CARICOM professional from seeking employment in T&T. That doesn’t just apply to CARICOM. It applies to East Indians, North Americans, South Americans and Europeans...anyone who wants to work in sweet T&T.

CARICOM immigrants cant come to work here just like that. They have to apply.

Once again CARICOM iz not the EU. Intra-CARICOM “free movement” for employment is regulated.

Like T&T nationals who want to work in Canada or the USA there is a process. All countries have a process of accepting legal immigrants who seek employment. The criteria of accepting legal immigrants can vary due to skill set of the immigrant, visa quotas, special refugee status, economic status, marriage, nationality of applicant's parents etc.

But within CARICOM it's mainly about skills. That usually means degreed individuals or entrepreneurs.

You must get a skill certificate in your home country to move for CARICOM employment and then apply after 6 months to regularize yourself in the host country. After that you may continue working indefinitely.

But all of that izan employment issue. Not a sovereignty issue. At no time does working in other CARICOM countres bestow residency or citizenship upon non resident CARICOM citizens who have a work permit.

CARICOM Residency and Immigration are separate processes from employment.

[desifemlove]

Then you don't know what national sovereignty means? ok...

[Miktay]

smh...

Here a definition of soverignty DFL.

How does this relate to working in another country?

1.
the quality or state of being sovereign, or of having supreme power or authority.
2.
the status, dominion, power, or authority of a sovereign;royal rank or position; royalty.
3.
supreme and independent power or authority in government as possessed or claimed by a state or community.
4.
rightful status, independence, or prerogative.
5.
a sovereign or independent state, community, or political unit.

[Redman]

Uh if you willing to pay anything for something-you will always have supply....Im sure if some one was to offer you 1 000,000,000 for your John Snow covered recliner-you would hand deliver.

And FOREX is about the inter currency relationship.
So the USD has been stronger and the only mechanism to move it is more buyers than sellers in the USD and the converse in the other currencies....

[silent_riot]

If more countries refuse TT currency, would that not devalue our currency even more? How should the CBTT handle something like that?

[Redman]

Based on the above just wait for UNC to get back in power....

but in the intervening decades we should

In simple form the mechanisms could be

-Economic growth and transparency-get back to growth
-Interest rates-higher rates make it more attractive to hold TTD.
-Control the foreigners that exporting remittances
-Establish better capital controls in the cross border movement of capital...we are a small economy-we cant mimic the US in its free market utopia in everything
-Maybe back the currency with a basket of commodities/currencies....but this is probably beyond CBTT
-Make TnT attractive to FDI etc

in essence-create demand for TTD and a desire to hold TTD up the islands

[Miktay]

If more countries refuse TT currency, would that not devalue our currency even more? How should the CBTT handle something like that?

Less demand for T&T...all things being equal...implies a depreciation of TTD against other currencies.

In the short term CBTT must decide whether to defend the relative value of TTD. This usually takes the forms of increasing interest rates(repo, interbank, discount, xs reserves) and/or buying TTD with forin reserves.

In rare cases the CB can sell or pledge its gold reserves. But this iza last resort.

[bluesclues]

Uh if you willing to pay anything for something-you will always have supply....Im sure if some one was to offer you 1 000,000,000 for your John Snow covered recliner-you would hand deliver.

And FOREX is about the inter currency relationship.
So the USD has been stronger and the only mechanism to move it is more buyers than sellers in the USD and the converse in the other currencies....

Ok.. and lets just suppose we kept buying usd until ttd became scarce. Does that mean the ttd would appreciate?

But frankly i dont see how it could be that u have more buyers but the overall amount of usd being purchased is reducing. We havent even really began to speak about trinidad's environment, which is a situation compounded by low export revenues struggling to keep up with import requirements. We here have a dynamic situation. The scarcity of usd u are fingering is part of that dynamic.

Can we buy usd? As in is it available on the market to purchase? The answer is YES.

Can we purchase as much usd as demand requires whilst maintaining the country with local currency? The answer is NO.

So what is scarce really is ttd. There's not enough ttd to buy all the usd we want whilst maintaining a healthy economy. But we could well do it if there were no restrictions and end up selling all our ttd to usd if we want. That scarcity isnt creating appreciation in our currency. Its slowing down business turnover and the rate of consumerism.

Let me put it this way. Even if the ttd was a world reserve currency, and we could make purchases directly to usa or china with ttd, then we would still have to enforce similar restrictions on import and purchase of usd locally to keep our economy from draining.

Bottom line.. if we could increase our export revenues to cover our import demand, we wouldnt be having this discussin right now.

[Redman]

You see the part where I said GLOBAL???

[bluesclues]

Money is the one thing u dont play with in this sytem and create scarcity to play laws of supply and demand. Goods and services in closed envirnments.. fine. But when u start trying to do it with money, u create all sorts of detrimental side effects for business and society in general. So when the pm corporate pnm bredrin and them callin and cussin him up to do something about the situation, he should remind them about all the policies pnm put in place to support and facilitate their business over the years and point out that these are the effects we seeing now. Empowering importers and having a weak export sector is what have us in this situation. Not no global scarcity of usd.

[bluesclues]

You see the part where I said GLOBAL???

Various countries facing similar situations as us here. Everyone is just trying to shield themselves, predict the market and make the best investment choice for their national economies.

Is there a british pounds shortage too? Can we go and buy as much brit pounds as we want in the bank locally? Isnt that under restriction too? What about euro, or cad? Can i go and buy 2000cad or euro in the local bank tomorrow morning? So u see, Is not that the foreign currency scarce, is that we cant afford to buy it and pay our rent and utility bills at the same time. So however much we spend, we have to keep enough for that.

[desifemlove]

smh...

Here a definition of soverignty DFL.

How does this relate to working in another country?

1.
the quality or state of being sovereign, or of having supreme power or authority.
2.
the status, dominion, power, or authority of a sovereign;royal rank or position; royalty.
3.
supreme and independent power or authority in government as possessed or claimed by a state or community.
4.
rightful status, independence, or prerogative.
5.
a sovereign or independent state, community, or political unit.

because if a country is sovereign, it can allow any people its wants without any other higher power or country saying it cannot. I just don't agree that CARICOM is not unlike the EU, since the CSME and Single Market have similarities. Rowley or Kamla cannot/could not say they only want 1000 Jamaicans or 1000 Bajans to come. If T&T left CARICOM, it would have that right. This is just splitting hairs though.

[88sins]

Rowley or Kamla cannot/could not say they only want 1000 Jamaicans or 1000 Bajans to come.

Says who?
note, see The Revised Treaty of Chaguaramas, Article 47 section 1, & section 2-subsections a & b
https://idatd.cepal.org/Normativas/CARI ... aramas.pdf

You still so sure?