It started with Venezuela, early this year the exchange rate of bolivar is around say 120 bolivar to 1 USD. Within 6 months the bolivar dropped to 248,000 bolivar to 1 USD. That is a 194,000% drop.
How can this happen, Venezuela ranked No. 1 in term of oil reserve. It has more oil than Saudi Arabia. A good example of mismanagement and corruption. Luckily we kick out BN.
Argentina
Then came Argentina. The peso started the year with 18.45 peso to 1 USD and now it is about 38.62 peso to 1 USD, that is about 110% drop.
Turkey
Now everybody is looking at Turkey's Lira. The lira started the year with about 3.72 lira to 1 USD and now it is about 6.62 lira to 1 USD, a 78% drop within 6 months since March 2018.
Is there a secret hand behind all these?
Will the crisis spread to Asia? Another Asian Currency Crisis on the way?
Lets look at the performance of major Asian currencies in 2018.
Chinese Renminbi dropped about 9%
Japanese Yen dropped 5.7% from its March high of 105.28 yen to 1 USD
Korean Won dropped 6.14%.
Singapore dollar dropped 5.5%
Philippines peso dropped 10%
Indonesia rupiah dropped 13%.
Thailand baht dropped only 5.6%, quite strong.
And our ringgit is weaker than Thai baht and Singapore dollars, it dropped 7.4%
The Australian dollars dropped more than the ringgit, it dropped 13% against USD.
Why USD is so strong despite the fact that the Federal Reserve had printed so much USD in its QE programs from 2008 to 2014. Altogether 3.6 trillion USD were printed. From the chart one can see how drastic is the Fed's action from 2008 to 2014.
China and Japan together they held a combined US$2.2 trillion of US treasury bonds
Looking at today's US's Federal Debt Clock, the figure is US$21.45 trillion
Based on US's 2017 GDP figure of US$19.48 trillion, the debt to GDP ratio is 110%.
Looking at the above my question now is whether the USD will collapse one day when the whole world decides to dump USD. That will be another crisis.
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2 comments:
my apologies... there's no way to plot a advance / decline on a single company... it's on an index that consist of all companies... may I know how do one plot advance / decline market breadth on KLCI?
I know on stockcharts can do that for NYSE, DOW etc.. but there's no KLCI index on stockcharts.com... is there any other software for this indicator?
thanks
So far I didn't search for software that plot the market breath for KLCI. I usually keep a daily record on the advance/decline of Bursa Malaysia for my own monitoring.
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