Forex Digest

http://nabe.com/graphweek/2008/gw080413. html

http://www.nationalpriorities.org/u_s_mi litary_spending

Consider that the US spends more on military than the rest of the world combined: http://www.globalsecurity.org/military/w orld/spending.htm

If you think about a situation of increased government spending and decreased or unchanged taxes, that means that the government is borrowing more money. Sometimes when the US government borrows money, they write up T-bills, which are then bought by the federal reserve. To buy these T-bills, the fed prints money, which causes the money supply to increase and the domestic interest rate to fall.

Because this increase in US money supply has no effect on foreign interest rates, there is now an interest rate differential between US and foreign debt. Investors can get a higher interest rate by buying foreign debt, so they sell US assets in order to buy foreign assets, and in doing so bid down the price of US currency and bid up the price of foreign currency. This is known as arbitrage and it is the mechanism by which the exchange rate equilibrates interest rate differentials.

Demand for US money has fallen and demand for foreign money has risen, and therefore the price of US money relative to foreign money (the exchange rate) also changes. US currency becomes cheaper relative to foreign currency (depreciates).

[The link between military spending and dollar value is the Interest Rate parity condition,

R=R* + (E'-E)/E

where R is the domestic interest rate, R* is the foreign interest rate, E' is the expected future exchange rate, and E is the exchange rate. This essentially says that the exchange rate adjusts to equilibrate interest rate differentials across borders.]

http://74.125.153.132/search?q=cache:YLG n9zKzPJ0J:answers.yahoo.com/question/ind ex%3Fqid%3D20090509083830AAvN9GE+dollar+ value+military+spending+correlation& cd=1&hl=en&ct=clnk
donfletch... While it is easy to agree that drastic action is inadvisable at most junctures, and certainly at current juncture, and while your ideas on debt reduction carry weight (if actually carried out, which all doubt to see), you haven't commented beyond short- to medium-term on military spending.

Do you truly believe that this industry offers the long-term return prospects that merit continuation in these exhorbitant investment trends? What say you?
correction: exorbitant

The nationalistic objective right now is to keep the US dollar in decline relative to outside currencies. This is first and foremost to correct trade imbalances. But it also induces those who hold US debt to offer to sell it for less, thus reducing US debt by inflation.

Yes, getting people to sell US bonds at a discount does cut US debt as readily as taxing and paying that money to buy bonds at a premium.

USA does not want its currency to go into free fall, but just on a soft landing course. Using new currency rather than selling bonds to the world to finance military adventurism is helpful only insofar as it keeps the military-industrial complex working and so happy. Cutting that spending would put a lot of angry workers on the streets. Did we think 8% unemployment was bad?

2009-07-12 18:59:38 by Pluto C. Rat

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THE WALL STREET JOURNAL
As U.S. leaders craft policies to curb illegal immigration from Mexico, the U.S. Federal Reserve is devising programs to extend banking services to undocumented immigrants. A new remittance program aims to bring Mexican migrants who send money home into the mainstream U.S. financial system, regardless of their immigration status.

Dubbed "Directo a Mexico," the remittance program enables U.S. commercial banks to make money transfers for Mexican workers through the Federal Reserve's own automated clearinghouse, which is linked to Banco de Mexico, the Mexican central bank.

To use the service, a Mexican need only possess a matricula consular, an ID issued by the Mexican consulate in most major U.S. cities to those with proof of Mexican birth or citizenship, or a picture ID card issued by the U.S. or another foreign government. The idea is to make it cheaper and safer for Mexican workers to send funds to their relatives.

"We offer an extremely competitive exchange rate," said Elizabeth McQuerry, an Atlanta-based assistant vice president for the Federal Reserve Bank's retail payments office. "We cost a third of other providers."

The majority of immigrants currently make transfers, which average $350 each, through companies like Western Union or a hodgepodge of wire-transfer firms, couriers and others that operate out of storefronts in Hispanic enclaves. Family members then collect the wired cash at a shop in their town or village.

The Federal Reserve Bank and Banco de Mexico launched a cross-country road show during the summer to promote the new funds-transfer program to commercial banks. Banks that offer the service hope to attract new customers. Indeed, one of the Federal Reserve Bank's goals is to use the program as a springboard for drawing hundreds of thousands of immigrants into the formal U.S. banking system because commercial banks require that those wanting the service first open a savings account.

"People who didn't have bank accounts establish a relationship with us," said James Maloney, chairman of Mitchell Bank in Milwaukee, one of the first banks to offer the Federal Reserve Bank's remittance scheme. "It's great for our business."

Acknowledging that many Mexicans sending money home are illegal immigrants, the Federal Reserve's brochure poses the following frequently asked question: "If I return to Mexico or am deported, will I lose the money in my bank account?" The answer: "No. The money still belongs to you and can be easily accessed at an ATM in Mexico using your debit card."

A team at the Federal Reserve Bank in Atlanta joined forces with a team at the Mexican central bank to design the Directo a Mexico program in response to a mandate by President Bush, following the U.S.-Mexico Partnership for Prosperity struck by Bush and Mexican President Vicente Fox in 2001. One of the stated objectives was to lower the cost paid by Mexican workers to send money to their native country.

The Federal Reserve Bank's brochure touts the favorable foreign-exchange rate, based on the official rate, and a low transfer fee. "In addition, your money is safer in the bank than in your pockets or underneath the mattress," the brochure says.

Retail banks that participate in the program charge as little as $2.50 a transfer compared with $40 charged by some transfer services. Retail banks in the program pay the Federal Reserve 67 cents per transfer.

Most immigrants operate in a cash economy outside the formal banking system, where they have neither credit nor identity. In a post 9/11 era, bringing immigrants into the banking system - and tracking their remittances - is vital to security, supporters say.

Critics, however, say the Federal Reserve Bank is coddling illegal immigrants and helping them engage in capital flight. "Anything that makes it easier for people to live in this country illegally is an inducement for illegal immigration," said Ira Mehlman, a spokesman for the Federation for American Immigration Reform, an immigration-restrictionist group. "On top of that, it is draining money out of our economy."

Latin American migrants in the U.S. transferred $53 billion to $55 billion to their native countries last year, according to the Inter-American Development Bank. About $20 billion went to Mexico, $12 billion to Central America and the Dominican Republic, and the rest to South American countries.

Remittances sent by Mexicans topped $15.5 billion in the first eight months of this year, 20 percent higher than the amount sent during the same period in 2005, according to Mexico's central bank, and this year's annual figure is expected to hit a new record. Savings scraped together by nannies, painters and others working abroad are now Mexico's second-largest source of foreign revenue, after oil exports and ahead of tourism.

Since the Federal Reserve launched the program last year, about 150 U.S. financial institutions have enrolled. While most Mexicans continue to avoid banks, consumers using the program seem happy with it. Julian Gimenez, who works for a landscaping company in Milwaukee, for years had sent money to his wife, Catalina, in Jalisco, Mexico, through a wire-transfer company in his Latino neighborhood. Now, Gimenez uses Mitchell Bank. "It's cheaper to send the money and it arrives faster than any other place," he said.

Last month, the program was expanded to enable migrants in the U.S. to open an account for relatives to whom they plan to send money. A bank teller in the U.S. can open the account remotely on a Web site set up by Mexico's Banco del Ahorro Nacional y Servicios Financieros, the development bank known as Bansefi, which has a vast network of branches in urban and rural areas.

The beauty of the program, says Bansefi's Chief Executive Officer Javier Gavito, is that the "unbanked population" on both sides of the border gets into the formal banking system. In Mexico, only half of all adults hold a bank account.

Directo a Mexico "revolutionizes the remittance market," said John Herrera, co-founder of Latino Community Credit Union, which has five branches in North Carolina and participates in the remittance program.

"U.S. banks have realized that these working-class folks are sending real money back home," said Herrera.



M O R E N E W S F R O M
• Federal Reserve Bank
• Business News
• Banking
• George Bush
• North Carolina
• World News
• Financial Services
• Mexico
• Western Union
• Country
• Jalisco, Mexico
• Discuss Jalisco, Mexico

Another example of our own government giving preferential treatment to criminal illegal aliens.

I'm so sick of our government coddling these illegals just so they can make a "Dishonest Buck" from Big Business!

We should confiscate their money and possessions and deport them. Just like we do drug dealers only drug dealers go to jail if they are Americans.

DO YOU EVER GET THE FEELING OUR OWN GOVERNMENT IS TRYING TO KILL US?

2006-10-17 09:43:43 by RENEGADE.

I have been trying to solve this problem and I don't know where to go.

A company enters into a forward contract with a bank to sell a foreign currency for K1 at time T1 . The exchange rate at time T1 proves to be S1 > K1 (NOTE, S1 is the spot price at T1). The company asks the bank if it can roll the contract forward until time T2 > T1 rather than settle at time T1 . The bank agrees to a new delivery price, K2 . Explain how K2 should be calculated.

I'm thinking there should be a time adjusted difference between K1 and S1 factored into the new price along with the spot price at T1 (S1). K2=(2*S1-K1)*exp^((r-rf)(T2))

I'm not sure what direction to go in after that. Maybe I'm thinking about this too hard, but I feel like I'm missing something.

2008-02-11 11:36:39 by

Introduction
Background:
Definition Field Listing
The Trucial States of the Persian Gulf coast granted the UK control of their defense and foreign affairs in 19th century treaties. In 1971, six of these states - Abu Zaby, 'Ajman, Al Fujayrah, Ash Shariqah, Dubayy, and Umm al Qaywayn - merged to form the United Arab Emirates (UAE). They were joined in 1972 by Ra's al Khaymah. The UAE's per capita GDP is on par with those of leading West European nations. Its generosity with oil revenues and its moderate foreign policy stance have allowed the UAE to play a vital role in the affairs of the region.

Geography
Location:
Definition Field Listing
Middle East, bordering the Gulf of Oman and the Persian Gulf, between Oman and Saudi Arabia
Geographic coordinates:
Definition Field Listing
24 00 N, 54 00 E
Map references:
Definition Field Listing
Middle East
Area:
Definition Field Listing Rank Order
total: 83,600 sq km
land: 83,600 sq km
water: 0 sq km
Area - comparative:
Definition Field Listing
slightly smaller than Maine
Land boundaries:
Definition Field Listing
total: 867 km
border countries: Oman 410 km, Saudi Arabia 457 km
Coastline:
Definition Field Listing
1,318 km
Maritime claims:
Definition Field Listing
territorial sea: 12 nm
contiguous zone: 24 nm
exclusive economic zone: 200 nm
continental shelf: 200 nm or to the edge of the continental margin
Climate:
Definition Field Listing
desert; cooler in eastern mountains
Terrain:
Definition Field Listing
flat, barren coastal plain merging into rolling sand dunes of vast desert wasteland; mountains in east
Elevation extremes:
Definition Field Listing
lowest point: Persian Gulf 0 m
highest point: Jabal Yibir 1,527 m
Natural resources:
Definition Field Listing
petroleum, natural gas
Land use:
Definition Field Listing
arable land: 0.77%
permanent crops: 2.27%
other: 96.96% (2005)
Irrigated land:
Definition Field Listing
760 sq km (2003)
Total renewable water resources:
Definition Field Listing
0.2 cu km (1997)
Freshwater withdrawal (domestic/industrial/agricultural):
Definition Field Listing
total: 2.3 cu km/yr (23%/9%/68%)
per capita: 511 cu m/yr (2000)
Natural hazards:
Definition Field Listing
frequent sand and dust storms
Environment - current issues:
Definition Field Listing
lack of natural freshwater resources compensated by desalination plants; desertification; beach pollution from oil spills
Environment - international agreements:
Definition Field Listing
party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Marine Dumping, Ozone Layer Protection
signed, but not ratified: Law of the Sea
Geography - note:
Definition Field Listing
strategic location along southern approaches to Strait of Hormuz, a vital transit point for world crude oil

Government
Country name:
Definition Field Listing
conventional long form: United Arab Emirates
conventional short form: none
local long form: Al Imarat al Arabiyah al Muttahidah
local short form: none
former: Trucial Oman, Trucial States
abbreviation: UAE
Government type:
Definition Field Listing
federation with specified powers delegated to the UAE federal government and other powers reserved to member emirates
Capital:
Definition Field Listing
name: Abu Dhabi
geographic coordinates: 24 28 N, 54 22 E
time difference: UTC+4 (9 hours ahead of Washington, DC during Standard Time)
Administrative divisions:
Definition Field Listing
7 emirates (imarat, singular - imarah); Abu Zaby (Abu Dhabi), 'Ajman, Al Fujayrah, Ash Shariqah (Sharjah), Dubayy (Dubai), Ra's al Khaymah, Umm al Qaywayn (Quwayn)
Independence:
Definition Field Listing
2 December 1971 (from UK)
National holiday:
Definition Field Listing
Independence Day, 2 December (1971)
Constitution:
Definition Field Listing
2 December 1971; made permanent in 1996
Legal system:
Definition Field Listing
based on a dual system of Shari'a and civil courts; has not accepted compulsory ICJ jurisdiction
Suffrage:
Definition Field Listing
none
Executive branch:
Definition Field Listing
chief of state: President KHALIFA bin Zayid al-Nuhayyan (since 3 November 2004), ruler of Abu Zaby (Abu Dhabi) (since 4 November 2004); Vice President and Prime Minister MUHAMMAD bin Rashid al-Maktum (since 5 January 2006)
head of government: Prime Minister and Vice President MUHAMMAD bin Rashid al-Maktum (since 5 January 2006); Deputy Prime Ministers SULTAN bin Zayid al-Nuhayyan (since 20 November 1990) and HAMDAN bin Zayid al-Nuhayyan (since 20 October 2003)
cabinet: Council of Ministers appointed by the president
note: there is also a Federal Supreme Council (FSC) composed of the seven emirate rulers; the FSC is the highest constitutional authority in the UAE; establishes general policies and sanctions federal legislation; meets four times a year; Abu Zaby (Abu Dhabi) and Dubayy (Dubai) rulers have effective veto power
elections: president and vice president elected by the FSC for five-year terms (no term limits); election last held 3 November 2004 upon the death of the UAE's Founding Father and first President ZAYID bin Sultan Al Nuhayyan (next to be held in 2009); prime minister and deputy prime minister appointed by the president
election results: KHALIFA bin Zayid al-Nuhayyan elected president by a unanimous vote of the FSC; MUHAMMAD bin Rashid al-Maktum unanimously affirmed vice president after the 2006 death of his brother Sheikh Maktum bin Rashid al-Maktum
Legislative branch:
Definition Field Listing
unicameral Federal National Council (FNC) or Majlis al-Ittihad al-Watani (40 seats; 20 members appointed by the rulers of the constituent states, 20 members elected to serve two-year terms)
elections: elections for one half of the FNC (the other half remains appointed) held in the UAE on 18-20 December 2006; the new electoral college - a body of 6,689 Emiratis (including 1,189 women) appointed by the rulers of the seven emirates - were the only eligible voters and candidates; 456 candidates including 65 women ran for 20 contested FNC seats; one female from the Emirate of Abu Dhabi won a seat
note: reviews legislation but cannot change or veto
Judicial branch:
Definition Field Listing
Union Supreme Court (judges are appointed by the president)
Political parties and leaders:
Definition Field Listing
none
Political pressure groups and leaders:
Definition Field Listing
NA
International organization participation:
Definition Field Listing
ABEDA, AFESD, AMF, FAO, G-77, GCC, IAEA, IBRD, ICAO, ICC, ICCt (signatory), ICRM, IDA, IDB, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IPU, ISO, ITSO, ITU, LAS, MIGA, NAM, OAPEC, OIC, OPCW, OPEC, UN, UNCTAD, UNESCO, UNIDO, UPU, WCO, WHO, WIPO, WMO, WTO
Diplomatic representation in the US:
Definition Field Listing
chief of mission: Ambassador (vacant)
chancery: 3522 International Court NW, Suite 400, Washington, DC 20008
telephone: [1] (202) 243-2400
FAX: [1] (202) 243-2432
consulate(s): New York, Houston
Diplomatic representation from the US:
Definition Field Listing
chief of mission: Ambassador (vacant); Charge d'Affaires Martin R. QUINN
embassy: Embassies District, Plot 38 Sector W59-02, Street No. 4, Abu Dhabi
mailing address: P. O. Box 4009, Abu Dhabi
telephone: [971] (2) 414-2200
FAX: [971] (2) 414-2603
consulate(s) general: Dubai
Flag description:
Definition Field Listing
three equal horizontal bands of green (top), white, and black with a wider vertical red band on the hoist side

Economy United Arab Emirates Top of Page
Economy - overview:
Definition Field Listing
The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Despite largely successful efforts at economic diversification, nearly 40% of GDP is still directly based on oil and gas output. Since the discovery of oil in the UAE more than 30 years ago, the UAE has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living. The government has increased spending on job creation and infrastructure expansion and is opening up utilities to greater private sector involvement. In April 2004, the UAE signed a Trade and Investment Framework Agreement with Washington and in November 2004 agreed to undertake negotiations toward a Free Trade Agreement with the US. The country's Free Trade Zones - offering 100% foreign ownership and zero taxes - are helping to attract foreign investors. Higher oil revenue, strong liquidity, housing shortages, and cheap credit in 2005-07 led to a surge in asset prices (shares and real estate) and consumer inflation. Rising prices are increasing the operating costs for businesses in the UAE and adversely impacting government employees and others on fixed incomes. Dependence on oil and a large expatriate workforce are significant long-term challenges. The UAE's strategic plan for the next few years focuses on diversification and creating more opportunities for nationals through improved education and increased private sector employment.
GDP (purchasing power parity):
Definition Field Listing Rank Order
$167.3 billion (2007 est.)
GDP (official exchange rate):
Definition Field Listing
$192.6 billion (2007 est.)
GDP - real growth rate:
Definition Field Listing Rank Order
7.4% (2007 est.)
GDP - per capita (PPP):
Definition Field Listing Rank Order
$37,300 (2007 est.)
GDP - composition by sector:
Definition Field Listing
agriculture: 1.8%
industry: 59.3%
services: 38.9% (2007 est.)
Labor force:
Definition Field Listing Rank Order
3.065 million (2007 est.)
Labor force - by occupation:
Definition Field Listing
agriculture: 7%
industry: 15%
services: 78% (2000 est.)
Unemployment rate:
Definition Field Listing Rank Order
2.4% (2001)
Population below poverty line:
Definition Field Listing
19.5% (2003)
Household income or consumption by percentage share:
Definition Field Listing
lowest 10%: NA%
highest 10%: NA%
Inflation rate (consumer prices):
Definition Field Listing Rank Order
11% (2007 est.)
Investment (gross fixed):
Definition Field Listing Rank Order
21.8% of GDP (2007 est.)
Budget:
Definition Field Listing
revenues: $58.88 billion
expenditures: $38.06 billion (2007 est.)
Public debt:
Definition Field Listing Rank Order
22.9% of GDP (2007 est.)
Agriculture - products:
Definition Field Listing
dates, vegetables, watermelons; poultry, eggs, dairy products; fish
Industries:
Definition Field Listing
petroleum and petrochemicals; fishing, aluminum, cement, fertilizers, commercial ship repair, construction materials, some boat building, handicrafts, textiles
Industrial production growth rate:
Definition Field Listing Rank Order
4.3% (2007 est.)
Electricity - production:
Definition Field Listing Rank Order
57.06 billion kWh (2005)
Electricity - consumption:
Definition Field Listing Rank Order
52.62 billion kWh (2005)
Electricity - exports:
Definition Field Listing
0 kWh (2005)
Electricity - imports:
Definition Field Listing
0 kWh (2005)
Oil - production:
Definition Field Listing Rank Order
2.54 million bbl/day (2006 est.)
Oil - consumption:
Definition Field Listing Rank Order
372,000 bbl/day (2005 est.)
Oil - exports:
Definition Field Listing Rank Order
2.54 million bbl/day (2004 est.)
Oil - imports:
Definition Field Listing Rank Order
137,200 bbl/day (2004)
Oil - proved reserves:
Definition Field Listing Rank Order
97.8 billion bbl (2007 est.)
Natural gas - production:
Definition Field Listing Rank Order
45.07 billion cu m (2005 est.)
Natural gas - consumption:
Definition Field Listing Rank Order
39.56 billion cu m (2005 est.)
Natural gas - exports:
Definition Field Listing Rank Order
6.848 billion cu m (2005 est.)
Natural gas - imports:
Definition Field Listing Rank Order
1.343 billion cu m (2005)
Natural gas - proved reserves:
Definition Field Listing Rank Order
5.823 trillion cu m (1 January 2006 est.)
Current account balance:
Definition Field Listing Rank Order
$41.67 billion (2007 est.)
Exports:
Definition Field Listing Rank Order
$156.6 billion f.o.b. (2007 est.)
Exports - commodities:
Definition Field Listing
crude oil 45%, natural gas, reexports, dried fish, dates
Exports - partners:
Definition Field Listing
Japan 23.4%, South Korea 10.3%, Thailand 5%, India 4.8% (2006)
Imports:
Definition Field Listing Rank Order
$101.6 billion f.o.b. (2007 est.)
Imports - commodities:
Definition Field Listing
machinery and transport equipment, chemicals, food
Imports - partners:
Definition Field Listing
China 13.1%, India 10.2%, US 8.9%, Japan 6.2%, Germany 6.1%, Italy 4.7% (2006)
Economic aid - donor:
Definition Field Listing
since its founding in 1971, the Abu Dhabi Fund for Development has given about $5.2 billion in aid to 56 countries (2004)
Economic aid - recipient:
Definition Field Listing
$5.36 million (2004)
Reserves of foreign exchange and gold:
Definition Field Listing Rank Order
$76.62 billion (31 December 2007 est.)
Debt - external:
Definition Field Listing Rank Order
$57.52 billion (31 December 2007 est.)
Stock of direct foreign investment - at home:
Definition Field Listing Rank Order
$44.37 billion (2007 est.)
Stock of direct foreign investment - abroad:
Definition Field Listing Rank Order
$14.14 billion (2007 est.)
Market value of publicly traded shares:
Definition Field Listing Rank Order
$138.5 billion (2006)
Currency (code):
Definition Field Listing
Emirati dirham (AED)
Exchange rates:
Definition Field Listing
Emirati dirhams per US dollar - 3.673 (2007), 3.673 (2006), 3.6725 (2005), 3.6725 (2004), 3.6725 (2003)
note: officially pegged to the US dollar since February 2002
Fiscal year:
Definition Field Listing
calendar year

Transnational Issues
Disputes - international:
Definition Field Listing
boundary agreement was signed and ratified with Oman in 2003 for entire border, including Oman's Musandam Peninsula and Al Madhah enclaves, but contents of the agreement and detailed maps showing the alignment have not been published; Iran and UAE dispute Tunb Islands and Abu Musa Island, which Iran occupies
Illicit drugs:
Definition Field Listing
the UAE is a drug transshipment point for traffickers given its proximity to Southwest Asian drug-producing countries; the UAE's position as a major financial center makes it vulnerable to money laundering; anti-money-laundering controls improving, but informal banking remains unregulated

Good lord, hire a translator for crying out loud. That's too much to ask one person for free.

2008-07-26 19:18:06 by Nica

Please? Don't wanna sound rude lol

The Foreign Exchange- Connected
S.T.I.L.L.B.O.R.N.- One Be Lo
Perseverance- Percee P
The Name, The Motto, The Outcome- Senim Silla

6/10
I only listened to it once, and maybe I just wasn't in the mood, but I found it boring.

9/10

9/10

9/10

2009-07-19 15:10:18 by Tyrone Biggums is like..