Monday, December 22, 2014

Some Wizard of ponzi stuff...

MEFOBILLS's picture
What does Belarus have to do with Malaysia in 1998?  Naked short selling on foreign markets will cause a rapid collapse of currency – this is also called a bear raid.  Betting downward pressure accelerates that pressure in a positive feedback loop.  George Soros (Jew) uses this economic warfare method in order to steal his money, to then fund his NGO operational arms, to re-inforce the scheme.   It is a rent seeking mechanism passed off as a necessary “free market” device.
ALL HYPERINFLATIONS are a function of exchange rate mechanism, this includes the Weimar Hyperinflation.  Zimbabwe aka Rhodesia is exception.
It is also curious that Malaysia has been suffering War By Deception, Mossad like attacks with downed airliners, etc.  ever since they showed up the IMF and International Banksters.  At its root, money is law, and a sovereign prerogative of a nation’s law abiding people.  Money is not international credit, even though our world is now an inverted psycho bubble that maintains this lie through Orwellian “war by deception” means.
Quote from .pdf link page 9
Offshore institutions (mainly in Singapore) borrowed ringgit at premium rates (double or triple the prevailing interest rates in Malaysia) to purchase dollars and bet in favor of the ringgit's collapse. The economy's decline continued. This was the background against which the controls were instituted on September 1st.
The primary objective behind the capital controls was to end speculation against the ringgit.  Most of that speculation was coming from short-selling of the ringgit in offshore (mainly Singaporean markets). These markets were offering high interest rates to attract ringgit deposits that in turn served to fund the shorting of the currency. To shut down offshore trading, the government mandated that all sale of ringgit assets had to go through authorized domestic intermediaries, effectively making offshore trading illegal. All ringgit assets held abroad had to be repatriated. Worried that these measures would lead to an outflow of capital and further depreciation of the currency, the Malaysian government also banned for a period of one year all repatriation of investment held by foreigners.
My prognostication:  Belarus will join BRICS in a hurry.  Their currency will be stabilized with swaps, probably even with China helping with dollar injections.  FX controls are necessary to prevent Bear Raids by foreign dollar holders. 

WW3 is moving into a more earnest phase.

Mon, 12/22/2014 - 11:23 | 5581141 Zero Debt
Zero Debt's picture
Preventing speculation helped Malaysia, but let's be a bit mote brutal about the fundamendals. Malaysia and many other Asian countries that got hit by the crisis in 1997 were running consistent current account deficits, in Malaysia's case all the way back since 1990. Since 1998, Malaysia has recorded current account surpluses in every single year. Hence, one could also argue that their economic model changed as well. Go and check Thailand, Korea, Indonesia; you will see the exact same watershed event reflected in the current account figures. They were simply overvaluing their currencies massively vis-a-vis their export competitiveness.
Belarus as of 2014 is a very similar case. Except for one year, 2005, it has been running persistent current account deficits since 1993 (!) and their currency is not a reserve currency. If you keep doing so, where are you going to get the forex to fund your reserves.
Therefore I disagree that swaps or temporary liquidity will help Belarus now. Calling in IMF would deprive them of valuable sovereignty and should be avoided as well. It will only postpone the inevitable crash, while making it far more spectacular. Their economy simply is not generating enough forex to keep their currency credible. And for the avoidance of doubt; if I was living there, I would not hesitate a second to buy gold or USD banknotes and keep it outside the financial system, avoiding deposits (i.e. making loans to domestic banks). The government should consider to devalue the currency instead and fiercly seek improve domestic economic conditions to promote its competitiveness.
If Belarus does not act decisively now, it could prove destabilizing for the entire region. Now bear in mind its strategic location, in the middle of Russia and Ukraine. Why is it suddenly, that Belarus is in deep trouble, right at the same convenient time as Ukraine suffered a government coup, one may ask. If Belarus falls, Russia's borders will soon be completely surrounded with NATO-allied governments. Bear in mind the Baltic state's relatively recent joining of NATO, Estonia and Latvia, bordering north of Belarus. Hence it makes perfect sense to destabilize it, and hence make Belarus ripe for a foreign takeover, by stealth or otherwise.
Do not be surprised if you soon hear something about the Belarus government collapsing and a "liberation" being made. This is not a simulation.

Mon, 12/22/2014 - 11:46 | 5581246 adeptish
adeptish's picture
When John (Angel of Death) McCain shows up in Minsk.
It's time to panic...
Mon, 12/22/2014 - 13:12 | 5581618 COSMOS
COSMOS's picture
Right on the money with that analysis, they are setting fire to another one of Russia's daughters  and hoping the fire spreads to mother Russia.
Either way more Lebensraum for the Euro and the Europeans.

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