WHY CURRENCIES FALLING ON THE WORLD MARKET

SCENE COULD SEE RECESSION COMING

MARCH 2010: The Pound & US$ has shrank. The Euro has depreciated now. A Sliding Euro and Debt Crises could push Europe back Into Recession. With the Euro dropping in value now points to a big danger for the fragile global recovery, one that will persist even after those bail out debt issues are resolved. Europe, the world's largest importer, may be on the verge of sliding back into a recession. And as governments scramble to rein in spending in order to combat the debt crises, the dampening in demand is likely to compound the problem. India made a massive purchase of gold, 200 metric tons worth (about $7.5 billion), even though gold is at an all-time high. The fact that one of the world’s most populous countries chose gold over US Treasuries as a safe buy is interesting?

Cutting stimulus spending and unemployment benefits, and raising taxes to tackle the debt-issues will only add to the likelihood of a double-dip recession. NZ is spending mega on roading projects that its rival Labour forgot about & has great schemes to build more roadways etc but doesn't have the money as the Labour Party was more intent on changing & amending laws & keeping the benefit people happy. Taxes are sky rocketing and goods and services & Acc levies are affecting some especially smaller businesses & theres an increasing slow up as oil hovers around $86 a barrel.

Worries over Greece's ability to finance its debts have been weighing for weeks on the euro, which has fallen more than 10% from its November high. Now in April the IMF has a bailout plan--- International Monetary Fund NOW in April 2010 injected £45 billion bill to prop up Greece in the money markets but it hasn't worked as at April 28th. Now markets are tumbling.

But for a weak euro means this would make exports more competitive against China -- which keeps the yuan undervalued and tips favoring Chinese exporters. It may be exactly what Europes ailing economy needs. But of course China has no intentions of appreciating the yuan and the USA is suffering as more companies close succumbed by China's intense competition and its piggy bank money box gets added to each day.

George Soros, our great stock market legend and 29th richest man in the world, expects the global economic “recovery” to “run out of steam.” In fact, he thinks it’s likely that another recession will happen again in 2011 and we think so as well!

Soros warned that growing political resistance to fresh state borrowing risks pushing the global economy into a double-dip recession next year. He also said the recovery from the worst recession since the second world war was incomplete, but that fears about a sovereign country debt was a barrier to spending designed to boost growth.

There is a general concern with sovereign debt, Soros said. “It is coming under suspicion and it has a political momentum because there is increasing political resistance to allowing national debt to rise. Some countries such as Greece do have deficits of 12.5% of GDP, which is intolerable and has to be reduced. Other countries such as the US and the main European nations have plenty of room to increase their deficits.”

Governments around the world have allowed their budget deficits to balloon since the financial crisis broke in 2007, but Soros said more spending was needed. “I think that since the adjustment process to the recession is incomplete, there is a need for additional stimulus. The political resistance to it increases the chances of a double dip in the economy in 2011 and after that.”

November 2009 North Koreans had to swap old won notes with new ones at an exchange rate of 1 to 100, knocking two zeros off their value & told to do in one day? many had no time to change & max 100,000 won so those who missed the dealine just threw their won away as it was now useless. The decree was to control inflation by limiting the amount of cash in circulation, and to destroy the fortunes of black market traders, money changers and others who had been profiting from North Korea’s nascent free market economy. Because of a cap of 100,000 won per family (£470 at the official exchange rate then), anyone with significant holdings of cash had their savings wiped out. Then this year Pak Nam Gi, the former finance director of the ruling Workers’ Party, was shot in Pyongyang sources saying that the official had been convicted of treason for “ruining the national economy with the disastrous currency revaluation. Now people are starving & have no money.

GREECE: ($413.6 billion DEBT ), is bigger than the country's economy, with some estimates predicting it will reach 120 % of GDP in 2010. The country's deficit was caused by cheap loans & no financial restraints plus indiscriminate spending -- how much more it spends than it takes in -- is 12.7% & its in the pits looking for bailout funds to reduce the deficit by more than €10 billion ($13.7 billion). It has hiked taxes on fuel, tobacco and alcohol, raised the retirement age by two years, imposed public sector pay cuts and applied tough new tax evasion regulations. Drastic cost cutting include taxes on fuel, tobacco and alcohol, retirement age up by two years, imposed public sector pay cuts and applied tough new tax evasion regulations but bailout by other EU country is not an option due to they having problems of their own. Oil prices rose above US$86 a barrel on Monday 3rd May 2010 as a record bailout for debt-stricken Greece of €110 billion ( NZ$201 billion ) was made. [ Why Greece collapsed ]

Portugal, Spain and even Ireland are not looking healthy.

PORTUGAL: is now the third debt-degraded country in the eurozone with financial problems and like the others has a heavy private debt burden. They have a 142.91 billion euro debt? Under EU pressure to correct its public finances, the Govt announced sweeping privatisation measures affecting airline, rail transport, postal, energy and paper industries, to fight a rise in debt. Also covered by the crash programme are bank and insurance activities.The privatisation would raise about 6.0 billion euros (8.22 billion dollars). The Socialist government intends to sell off the Portuguese economy to get itself right.

SPAIN: Right on the tail of Portugal Spains economy, being 4 times the size of Greece, has been amounting debts since 2008. The deficit reached 11.4 percent last year, almost four times the EU’s 3 percent limit, compared with 12.7 percent for Greece. Investors should avoid Spain’s bonds as the euro region’s highest levels of joblessness affects the country’s ability to cut its budget deficity by 2013, bringing in 1.2 billion euros this year and 1.8 billion euros next year. The public debt burden will rise above 80 percent of GDP by 2012.

COUNTRIES WHO CRASHED In the last 20 odd years:

• 1989 ARGENTINIAN

• 1997 THAILAND

• 1998 RUSSIA

• 1999 ECUADOR

• 2001 ARGENTINIAN

2008 Iceland whose next!!!!!!!!!!!!!!!!!!!!!!!!! & 2009 North Korea & Greece??

CHINA SITUATION:

As at May 2010 China is starting to spread inflation to other Western countries. China has borrowed $8 for every dollar of GDP growth so have a credit problem. We loved the cheap goods but now China is flooding the markets via exports to the rest of the world. NZs Reserve Bank cannot stop this. Remember the US was borrowing $6 for every dollar before the subprime crash & Kiwis are borrowing still well beyond there means.

Some of the world's largest hedge funds are even saying that the Euro currency will sink to trade at an even level with the U.S. dollar.

The most terrifying prediction for 2010 involves Nostradamus "Satan's arch of fury". Although the precise nature of this prediction is left open to interpretation -could it be a comet, a war but definitely a disaster??? eg. Russian drought; Pakistan flooding has started

Are we heading back to recession with $$$ dropping & foreign currencies starting to fall as at March 2010 [ World Population exploding ] [ China Vs USA finance situation 2010 ] [ China buying bonds & loans ] WHY ARE MANUFACTURERS & BUSINESSES LEAVING NZ: [ Read the story ] [ Compare to Thailand ] [ Check WHY THAILAND ] is better for Manufacturers & any Kiwi Company. Why NZ is lost [ NZ Deficit increases ] Yes we owe money????? [ Government $250m a week borrowing ] [ Transmission Gully Impact costs ] [ NZders lose out ]

"You believe me now that the world population needs to be addressed.

Don't tell anyone as most think its untrue & don't give a meow "

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