"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Friday, April 06, 2007

Euro riding high

Subsequent to interest in the impact of the prospect of soaring summertime elecricity costs it is worth noting that the US$ is trading at 2 year lows around Eur 1.3433 , this also pushed the euro near a record high against the yen, @ 159.35 yen to the Euro.

In the Pacific region, a decision by the Reserve Bank of Australia to hold rates at 6.25 % (although a rise is expected soon) resulted in the Australian dollar trading at a decade high rate of 81.90 ( 82.15 would be a the highest since 1990).

To the silver watchers a troy ounce was trading US$13.55 overnight - this graph is of interet to people who followed Lord Patel's foray into the market at US$5.60 just before the Iraqi illegal invasion commenced - some see this will double in 5 years. Remember of course that at that time 1US$ = 1 Euro so in Euro values any investing 1 US$ in silver then is now only worth 79 cents. So say you invested US$10,000 in silver it would have been the equivalent of Euuros 10,000. That investment is now worth US$24,200 a rise in US$ value of 240% = Euros 18,058 a rise of 180%. It is this decline in the international purchasing power of the US$ that US emploloyees are paid with, that is starting to affect the ability to pay the VRM (Variable Rate Mortgages) of the prime rate mortgage market.

Of course if the reports that Vice President Cheney bought heavily into Eurobonds will give him little cause to worry about his personal finances. he must however been a bit pissed off when the State of Iran made its first first foreign bond issue in June 2002 since the Islamic revolution despite the withdrawal of its sovereign debt rating by Moody's. The US credit agency withdrew the rating because it was deemed to be inconsistent with US sanctions against Iran. The USD500m eurobond issue went ahead regardless and was barred to US buyers (due to over subscription it was raised to £640 Mn)...which would have been a nice little investment. BNP Paribas and Germany's Commerzbank were acting as lead managers.After the Iraqi illegal invasion you might remember the Oil for Food Funds were whisked away from BNP Paribas to the safety of New York.

Which probably was the reason why the Veep Cheney, speaking to the American Israel Public Affairs Committee (AIPAC),was in a bellicose mood....

"For our part, the United States is keeping all options on the table in addressing the irresponsible conduct of the Iranian regime." Make no mistake, Cheney told the cheering crowds of AIPAC, "we will not allow Iran to have a nuclear weapon".

Beware of Cheney .. never trust a guy who shoots lawyers....and buy silver.

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