KTFA

BACKDOC: ARE THEY USING NEGATIVE INTEREST RATES TO PROP UP BANK RESERVES AS DEBT SOARS WITH SPIRALING DEFLATION? MMMM (see article below)
OR POSSIBLY ARE THEY TRYING TO PROP UP U.S. TREASURY BONDS TO KEEP THE GLOBAL ECONOMY FROM COLLAPSING?
EITHER WAY OR BOTH, BANDAIDS ARE ABOUT TO BE RIPPED OFF OF THE THINNED SKINNED GLOBAL ECONOMY!
REMEMBER THE PNEUMONIC TO DETERMINE THE DIFFERENCE BETWEEN A KING SNAKE AND A CORAL SNAKE?
THE IMF IS CURRENTLY ON ALERT, BUT IF JACK, JACK, JACK ALOWS THE MONETARY REFORM TO DRAG OUT, THE “RED AND YELLOW KILL A FELLOW”, MAY TAKE THE IMF FROM ALERT TO ALARM!
I SAY JACK ITS TIME TO ACT, ACT, ACT, BY MID YEAR LIKE CHRISTINE SAID, SO WE CAN SAY, “RED AND BLACK OK JACK”!    DOC   IMO
Thunderhawk:  Backdoc Alert
Investors lose $24 billion a year on negative-yielding bonds
Japan accounts for 66% of negative yielding debt world-wide
Bonds issued by governments around the world that yield less than zero result in investors’ losses of about $24 billion a year, according to Fitch Ratings.
The rise of bonds, where lenders are essentially paying borrowers to take their money, is expected to have broad repercussions on financial institutions’ profits and keep demand for U.S. Treasurys high, said Robert Grossman, managing director of the macro credit research unit at Fitch, in a report.
As of April 25, so-called negative-yield bonds totaled $9.9 trillion, which comprises $6.8 trillion in long-term bonds and $3.1 trillion in short-term debt, according to Fitch.
Read: How negative interest rates could lead to a world without cash
Banks, insurance companies, pension funds, and money-market funds, which are key players in the government debt market, are pressured to take on greater risks to make up for negative yields, Grossman said. Some banks have already started to pass on the increased cost to their customers, he added.
“Despite gains booked on many of these securities over the last several years, yields for these [financial] institutions’ portfolios have fallen sharply, and their ability to maintain profits has been reduced,” Grossman said.
Also read: Negative interest rates put the global economy on a razor’s edge
Fitch said 14 governments have at least one benchmark bond yielding below zero and these countries combined have $15.4 trillion in bonds outstanding with an average yield of 13 basis points. By comparison, the trillions in negative-yield bonds are yielding minus 24 basis points, which is equivalent to $24 billion annually.
Negative interest rates are viewed as a controversial and unconventional strategy, which has been employed by Japan and parts of Europe to spark otherwise sluggish growth and lift stubbornly lower inflation.
Japanese debt accounts for 66% of negative-yielding debt world-wide, with $6.5 trillion worth of fixed-rate debt obligations yielding less than 0%,” said Grossman.
Japan’s central bank now owns about 32% of outstanding Japanese government bonds, almost double the Federal Reserve’s 17.2% ownership of Treasurys, data from Fitch and Jeffries show.
The diminished returns from JGB and European sovereign bonds are likely to continue feeding investors’ appetite for U.S. Treasurys and result in low rates for a sustained period, Grossman said.
“This could also complicate any attempts by the Fed to tighten policy by raising short-term interest rates later this year,” he said.
Analysts at Bank of America Merrill Lynch recently estimated that negative-yield bonds accounted for nearly one fourth of the global bond market and are likely to continue growing as governments seek novel means of stimulating their economies.
Still, despite soft patches in the U.S. economy, the Federal Reserve won’t have to resort to negative rates soon as the outlook on growth and inflation are generally optimistic, said Thomas Simons, senior money-market economist at Jefferies LLC.
“Some day in the future we will look back on this time as a very bizarre episode that produced nothing useful,” he said.
http://www.marketwatch.com/story/investors-lose-24-billion-a-year-on-negative-yielding-bonds-2016-05-05
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Mountainman:  Indeed….TIME is Running out and The WATERS of DEBT are RISING FAST…….A Restructuring of their Debt is Possible…..Only If
The Levy’s of Debt Can Hang On thru This Transition Process…..Will they try to Issue New Valued Bonds w/ A Deal thru Congress???
That Remains to be Seen…..However,In the Near Future those New Values will be Showing up In Our Treasury Reserves….Perhaps that is A Way to Hold Off The Tsunami Of Debt Plaguing Puerto Rico…….IMO
Blessings,Mountainman   (8)=New Beginnings…….
Thunderhawk:  Backdoc Alert
Donald Trump Says Puerto Rico Bondholders Should `Take a Hit’
Donald Trump, President Barack Obama and House Speaker Paul Ryan appear to agree on something: restructuring Puerto Rico’s debt.
Trump said Thursday that Puerto Rico’s debt needs to be addressed, a statement that could give Republicans in Congress some cover to reach a deal over a stalled effort to alleviate the fiscal pressures on the island.
“I think you could restructure their debt without a bailout,” the presumptive Republican presidential nominee said on Fox News Thursday. “I would be so helpful,” he added, referring to his long history as a businessman dealing with debt.
Trump made clear that Puerto Rico cannot pay all that it owes.
“Let the bondholders take a hit,” he said.
A restructuring package, H.R. 4900, remains stuck in the House, with Republicans expressing hope that they’ll be able to get back on track after they return next week and before the next big bond payment is due on July 1.
Treasury Secretary Jacob J. Lew has repeatedly said it’s urgent that Congress act on the Puerto Rico debt crisis.
“Puerto Rico doesn’t have decades, Puerto Rico has a crisis today,” Lew said Tuesday in an interview on Bloomberg Television. “The need for action is urgent.”
http://www.bloomberg.com/news/articles/2016-05-05/donald-trump-says-puerto-rico-bondholders-should-take-a-hit
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Mountainman:  Yes for Sure “A STRUCTURAL CHANGE”/Reform per the IMF…….New Rules New Changes and New COORDINATED Energy Sectors…….{ALL} Playing their Part in the GLOBAL TRANSITION for OIL and How it is Going to be Used and (NOT) Manipulated……….for One Countries Personal Preferences for Monetary Gain…….Now they are Calculating this and Implementing the New Strategies……..some Like it,Some Don’t……But In this New Global Reality……it’s a COLLECTIVE Movement…….IMO
Blessings,Mountainman   (8)=New Beginnings………For OIL……..
Thunderhawk:  Backdoc Alert
Exclusive: Shift in Saudi oil thinking deepens OPEC split
LONDON/DUBAI (Reuters) – As OPEC officials gathered this week to formulate a long-term strategy, few in the room expected the discussions would end without a clash. But even the most jaded delegates got more than they had bargained with.
“OPEC is dead,” declared one frustrated official, according to two sources who were present or briefed about the Vienna meeting.
This was far from the first time that OPEC’s demise has been proclaimed in its 56-year history, and the oil exporters’ group itself may yet enjoy a long life in the era of cheap crude.
Saudi Arabia, OPEC’s most powerful member, still maintains that collective action by all producers is the best solution for an oil market that has dived since mid-2014.
But events at Monday’s meeting of OPEC governors suggest that if Saudi Arabia gets its way, then one of the group’s central strategies – of managing global oil prices by regulating supply – will indeed go to the grave.
In a major shift in thinking, Riyadh now believes that targeting prices has become pointless as the weak global market reflects structural changes rather than any temporary trend, according to sources familiar with its views.
OPEC is already split over how to respond to cheap oil. Last month tensions between Saudi Arabia and its arch-rival Iran ruined the first deal in 15 years to freeze crude output and help to lift global prices.
These resurfaced at the long-term strategy meeting of the OPEC governors, officials who report to their countries’ oil ministers.
According to the sources, it was a delegate from a non-Gulf Arab country who pronounced OPEC dead in remarks directed at the Saudi representative as they argued over whether the group should keep targeting prices.
Iran, represented by its governor Hossein Kazempour Ardebili, has been arguing that this is precisely what OPEC was created for and hence “effective production management” should be one of its top long-term goals.To Read More:
http://finance.yahoo.com/news/shift-saudi-oil-thinking-deepens-183725965.html
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Mountainman:  Go IRAN……But TRANSPARENCY between ALLIANCES is The KEY…..w/out this And ACCOUNTABILITY this Venture is Dead in the Water……And We know the SWISS are In It to Win it…….W/ the BIS in Your Backyard…..this One Is GOLDEN…..IMO
Blessings,Mountainman   (8)=New Beginnings……of A Lasting Relationship…….BANKING
Thunderhawk:  Iran, Switzerland hold first round of financial talks in Bern
Iran and Switzerland held a first round of financial talks in Bern and explored grounds for cooperation by presenting reports on financial and banking activities and monitoring systems of each other.
The Iranian team to the talks was led by Hamid Tehranfar, Monitoring Deputy of the Central Bank of Iran (CBI) while the Swiss delegation was headed by Rene Weber, director of financial markets of the Finance Ministry.
Announcing Switzerland’s support for the implementation of the Joint Comprehensive Plan of Action (JCPOA), Weber announced his country’s readiness for cooperation in financial and banking fields as well as campaign against money laundering and terrorism financing.
Meanwhile, Tehranfar called for taking advantage of the experience of Switzerland in monitoring and banking regulations and said continuation of the talks will lead to promotion of financial and banking cooperation at bilateral and international levels.
He said the next round of the talks will be held in Tehran before the end of the year.
This is the first round of financial talks between Iran and Switzerland in line with the roadmap of bilateral relations which was agreed upon by the presidents of the two countries in the course of the visit to Iran of the Swiss President Johann Schneider last year.
http://www3.irna.ir/en/News/82059908/
BACKDOC:  IF YOU ALL REMEMBER IRAQ HAD TO SETTLE DEBTS WITH ITS CREDITORS A COUPLE YEARS AGO!  HERE WE GO AGAIN!
WE AWAIT FOR IRAQS’ SHIA BROTHER TO SETTLE ITS DEBTS SO IT WILL BE ALLOWED TO RE-ENTER THE WORLD!
DO YOU REMEMBER LAST WEEK IT WAS THE U.S. TAKING MONEY THROUGH U.S. COURTS FOR REPARATIONS TO FAMILIES FOR THE BOMINGS!  THIS WEEK ITS INDIA!
I LIKE THE PROCESS THEY ARE MAKING AND HOPE ITS ABOUT DONE BUT WE JUST DON’T KNOW YET.  WHAT I STRONGLY BELIEVE IS IRAQ HAS MADE UP DRAMA TO STRING THE STORY ALONG UNTIL IRAN IS READY!
IMO THE TWO SHIA BROTHERS WILL GO TOGETHER!  IT HAS ALWAYS BEEN PART OF THE DEAL”!  AMAZING HOW IRANS RESERVES HAVE SOARED, THAT CAME OUT OF NOWHERE!  WOW! DOC    IMO
Thunderhawk:   Modi’s Iran visit, golden chance to settle financial disputes
The significant and historical visit of the Indian Prime Minister Narendra Modi to Iran slated for May 22 provides a golden opportunity for both countries to develop ties and focus on ways of settling their financial disputes.
New Delhi has arears of dlrs two billion for oil payments it blamed the banking sanctions caused the delay, but, Iran demands India to pay the overdues now that the banking sanctions are lifted.
During his two-day stay in Tehran, the Indian premier is to meet with the Supreme Leader, the President and foreign minister as well as a number of other senior officials.
Indian officials have announced that the Prime Minister’s imminent visit aimed at boosting ties and signing energy memoranda of understanding on energy.
After Iran, Modi is scheduled to travel to Qatar.
Iran and India are expected to ink memorandum of understanding on fighting terrorism and defense cooperation which will contribute a lot to peace and stability of the region.
North-South Corridor and investment in railway network are on agenda of the Iranian and Indian officials during the upcoming visit.
A memorandum of understanding on developing Farzad B Gas Field will be finalized during the visit.
The MoU on Farzad B gas field was drafted by India’s Minister for Petroleum and Natural Gas Dharmendra Pradhan, who led a delegation of major private sector representatives from oil, gas, and energy fields to Tehran on April 16.
The Federation of Indian Chambers of Commerce and Industry (FICCI) said in a statement that a strong private sector presence is being ensured by FICCI under the leadership of Y.K. Modi, Past President FICCI and Executive Chairman, GEECL and private sector players like the Essar Group, Reliance Industries Ltd, L&T, John Energy and Deepak Nitrite.
New Delhi is working on clearing $6.5 billion of debt for Iranian oil and this issue could be resolved soon, according to local media.
New Delhi is ready to clear some $6.5 billion of debt for Iranian oil in near future, provided there is clarity on the channel of payment, Indian media reported Sunday, citing government sources.
‘We are working on clearing the dues to Iran and are hopeful that the issue will be resolved soon,’ the NDTV broadcaster quoted its sources as saying.
According to the broadcaster, a series of bilateral negotiations at various levels has been held both in Tehran and New Delhi. The sources reportedly told the media that both sides were confident of being able to soon resolve the issue.
However, according to the media, despite the Western sanctions on Iran now being lifted, there are still some issues with the banking channels which create obstacles for regular transactions.
Iran began stepping up international trade and investment cooperation after its historical deal with the 5+1 in July 2015.
In mid-January, the sanctions were removed after the International Atomic Energy Agency verified Tehran’s compliance to the nuclear agreement.
Following lifting of sanctions, Iran terminated the discounts for India, which included the payments being carried out in rupees, and free delivery of oil, and has since been insisting on payments for the crude it exports to Indian refineries to be carried out in euros.
http://www3.irna.ir/en/News/82061732/
BACKDOC: CHATTY IRAN IS JUST BRAGGING THEIR PANTS OFF WHILE THE U.S. SLIPS IN THE BACK OF THE ROOM TO CATCH AN EAR FULL! HEE HEE  (See article below)
ONCE THE DEBTS ARE SETTLED AND WE HOPE VERY SOON, IRAN WILL HAVE A CURRENCY OF COMPATIBILITY TO ITS SHIA BROTHER AND THE REST OF THE MONETARY REFORM WILL LAUNCH!
THIS IS WHAT WE WAIT FOR NOT IRAQ!  IRAN!  DOC   IMO
Mountainman:  Crazy huh…….Don’t think for One Minute these Businesses and Countries are (NOT) Anticipating Iran’s New Reality/Value that will Contribute to Their Respective Economies Bi-Laterally=In MORE Ways than ONE…….IMO
Blessings,Mountainman   (8)=New Beginnings…….TOGETHER…..
Thunderhawk:  Iran Oil Show 2016 kicks off
The 21st International Oil, Gas and Petrochemical Exhibition started work here Thursday for four days.
Near 2,000 companies from Iran and 38 world countries have attended Iran Oil Show this year.
The exhibition is the first international oil show being held in Iran in the post-sanctions era.
Anti-Iran sanctions were lifted on January 16.
The participating countries include Germany, Ukraine, Belgium, France, Hong Kong, Armenia, India, Italy, UAE, Austria, Malaysia, China, Canada, Netherlands, Poland, Venezuela, South Korea, Russia, Spain, Turkey, UK, Azerbaijan, Norway, Brazil, Romania, Finland, Japan, New Zealand, Taiwan, Indonesia, Switzerland, Monaco, Australia, Sweden, Singapore, Portugal, Bulgaria and the US.
The US has attended the exhibition through its European agencies.
Some companies, including Germany’s Siemens and Russia’s Gazprom, were not attending Iran Oil Show in previous years due to sanctions imposed on Iran.
Iran’s success in nuclear talks with world powers that led to July deal (known as the Joint Comprehensive Plan of Action) has prepared the ground for presence of the international companies in the country.
http://www3.irna.ir/en/services/162/
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BACKDOC: WELL THUNDER,  THEY WOULD HAVE TO COLLECT SOME SERIOUS REVENUE FROM CORPORATIONS AND THE ELITE TO PULL THIS OFF!
NOT BEING IN THE BASKET OF SDR CURRENCIES YET OZ WOULD HAVE TO BECOME MIGHTY GENEROUS INDEED.
WE WILL SEE INFLATION LIKELY GO FLAT GLOBALLY!  OF COURSE COUNTRIES LIKE VIETNAM, IRAQ, IRAN, AND INDONESIA WILL HAVE GROWTH WHILE OTHER COUNTRIES WILL FALL INTO DEFLATION WHILE THEIR DEBT SOARS!
I FEAR THE THINNED SKINNED U.S. ECONOMY IS VERY VULNERABLE AND PEOPLE KNOW IT!
I EXPECT THE U.S. TO TRANSFORM ITS TAX SYTEM!  DOC  IMO
Mountainman:  In this LIFE,Nothing is FREE……..Everything has A PRICE TAG Attached to It and this is No Different……It Always Sounds Good Until One PEELS Back the Layers in the ONION…….LOL…….Will A Countries FUTURE SDR Account Play a part Here….Time will Tell for In these Socialistic Countries, More times than Not…..They Bury themselves in DEBT because of PROGRAMS Like this FAIL on Both Sides of the COIN……..IMO
Blessings,Mountainman  (8)=New Beginnings……..for the REDISTRIBUTION of WEALTH……???
Thunderhawk:  Hey DOC can we say SDR’S or what?
Global first? Every Swiss could be guaranteed $2,600 a month tax-free
GENEVA, Switzerland — Chalk it up to Swiss affluence. Voters here will decide next month whether all 8 million citizens and legal residents should be guaranteed a generous monthly income, something no country in the world has ever done.
On June 5, Swiss voters will weigh in on a radical proposal that would mandate the government to guarantee $2,600 a month tax-free to every adult citizen and legal resident, and $650 to each child.
The payment would be provided to everyone, regardless of work status, income level, or wealth. It is a benefit few countries can afford. But then, Switzerland is among the world’s richest nations, with a per capita income of about $85,000, 40% higher than that in the USA.
The idea of an unconditional basic income is not new. It is being discussed by various cities in the Netherlands, Finland, Canada, New Zealand and other nations. But Switzerland is the first country to actually vote on a guaranteed income at the national level.
The latest polls show the proposal likely will go down in defeat, though supporters say they hope to build support for it in the coming weeks.
The initiative was put on the ballot by a group of artists, writers and intellectuals who made use of Switzerland’s unique system of direct democracy, which allows any citizen to bring an issue to a referendum by collecting 100,000 legitimate signatures on a petition.
“This is a great idea,” said Chloe Hubert, a student at the University of Geneva. “I only work on weekends, so this income would really help.”
Though Swiss salaries are among the highest in the world, supporters say the stipend would offer people an option of reducing their working hours, while maintaining a decent standard of living.
“It would lead to a more motivated workforce and more humanized, stable and productive economy,” said Che Wagner, the initiative’s co-organizer and campaign manager.
Under the proposed law, the government would guarantee that every Swiss adult has at least $2,600 in monthly income after taxes. So if a person has no income at all, he or she will receive the full amount. If the person earns $1,600 now, the supplement would be $1,000.
Someone who currently earns, say, $6,500 month would not receive any money from the government but $2,600 of it would not be taxed.
For those getting welfare or other social benefits, payments of up to $2,600 a month would be replaced by the new basic income. Anything over this amount would continue to be provided as a separate payment and taxed accordingly.
Theoretically, a family of two non-working adults and two children at home would be eligible for $6,500 a month, or $78,000 a year tax-free. That’s nearly twice the after-tax income of a typical American family.
The proposal has many critics. In a recent interview with Swiss Broadcasting Corporation, parliamentarian Raymond Clottu argued that the giveaway would “put at risk a system that motivates people to work and get training. So we should try to improve it, not bring in basic income which would destroy the motivation to work.”
He and other opponents also note that financing the scheme, estimated to cost about $200 billion a year, would strain the government’s coffers.
The initiative’s backers say the plan would be funded, among other sources of revenue, by increasing Switzerland’s 8% value added tax.
The government counters that other taxes would have to rise and spending slashed to afford such a generous giveaway.
“Considerable cutbacks or tax rises would be necessary to finance this basic income, which could not replace today’s social security system entirely,” the government warns on its website, urging voters to reject the initiative.
As the concept of basic income gets traction across Europe, could a similar policy be adopted in the U.S.?
“Before it could be taken seriously, the middle class would need to experience far more job and wage loss than it has already,” Robert Reich, former U.S. secretary of Labor and now professor of public policy at the University of California, Berkeley, told USA TODAY.
“Unfortunately, those losses are inevitable,” he added. “We’ll have a serious discussion about a minimum basic income about a decade from now.”
http://www.usatoday.com/story/news/world/2016/05/05/switzerland-referendom-monthly-income-tax-free/83940610/
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BACKDOC: GET READY FOR THE NEW CURRENCY WAR.  THE TPP WILL MARGINALIZE CHINA AND PREVENT THEM FROM CHEATING ON THEIR CURRENCY ANYMORE.
THE FACT STILL REMAINS THAT CHINA HAS MASSIVE GROWTH POTENTIAL WITHIN ITS OWN COUNTRY AS IT SHIFTS FROM AN EXPORTING ECONOMY TO A BALANCED AND INTERNAL ECONOMY!
WE WILL CONTINUE TO SEE CHINA RESTRUCTURE ITS BAD DEBTS FROM ITS ZOMBIE COMPANIES.  THEY WILL CONTINUE TO MOVE TOWARD MORE PRIVATIZATION!  DOC   IMO
Mountainman:  ALL Eyes are On CHINA……But I Like the way Buffett Described their Economy as {TRANSITIONING}……In Spite of their LOOMING Debt bubble He Knows The Reality that will Bolster the US/CHINA Relationship……In the Meantime A Downward Spiral is Rising Up…….
There are Winners and Losers as New Values are Coming Together. It Only Makes Sense that the TWO LARGEST Economies are Facing Economic Headwinds in this [TRANSITION]……It is as I said before, CONTROLLED CHAOS…..Cascading to
An END that will be Tumultuous Along the Way…….For Now we Must Be Patient and Confident (Knowing) the USA/CHINA Agreements Carry this Understanding of Each Other As Things Move towards A New Reality…… IMO
Blessings,Mountainman   (8)=New Beginnings……..for CHINA and The U S A’S FUTURE……….
Thunderhawk:  Warren Buffett Optimistic on China’s Economic Transition
Billionaire Warren Buffett, chairman and CEO of Berkshire Hathaway, said before the company’s annual shareholders’ meeting that he was still optimistic about China’s economic development, and believed China’s economic transition will be successful, the Sina Finance reported
.
Although China’s economic slowdown and fluctuation in stock market has spooked global investors, when talking about the prospect of China’s economy, Buffett said in an exclusive interview with Sina Finance that he had confidence in the country and believed that China’s development will be better over time.  Read more at:
http://peoplenetv.com/warren-buffett-optimistic-on-chinas-economic-transition/
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BACKDOC:  WE SEE THAT THIS DIVERSIFICATION WILL BE NEEDED SINCE OZ WILL CONTROL OIL SALES THROUGH SDR CURRENCY SETTLEMENTS!
THEY CAN OVER PRODUCE BUT IT WON’T HAVE ANYWHERE TO GO SINCE CONTRACTS WILL ULTIMATELY CONTROL PRICES AND SUPPLY!
DEMAND WILL TAKE A BACK SEAT TO TPP AND CONTRACTS NOW THAT OZ IS USING THE UNIVERSAL CURRENCY BLACK GOLD AS THE NEW RESERVE CURRENCY!
SOON THE GOLD BUGS WILL BE DISAPPOINTED WHEN METALS DROP WITH THE MARKETS!
STILL ITS A GREAT SECURITIZED ASSET RELATIVE TO THE DOLLAR BUT WHY NOT OWN ASSET BACKED BONDS OR THE ACTUAL CURRENCIES THAT ARE SUPPORTING THE SDR?  MMMMM  DOC  IMO
Thunderhawk:  Backdoc Alert
IMF: Oil Producers Must Diversify to Mitigate Likelihood of Volatility
IMF fiscal policy division chief Benedict Clements claims that large oil producing nations should adopt policies aimed at economic diversification to limit the impact of future oil price volatility.
Large oil producing nations should adopt policies aimed at economic diversification to limit the impact of future oil price volatility, International Monetary Fund (IMF) fiscal policy division chief Benedict Clements told Sputnik.
“There is still an expectation that oil price volatility could potentially continue… We are saying, in effect, that economic diversification would help deal with some of this volatility, in the sense of if you’re overly reliant on the oil sector then when bad times come in the oil sector, you are not as vulnerable,” Clements said on Wednesday.
Clements explained that the levels of oil price volatility continue to be uncertain with a wide spread of predictions. Some market participants anticipate a rebound in oil prices into the $120 per barrel range in the next four years. Others have predicted prices will remain close to $30 per barrel.
According to an IMF report co-authored by Clements, oil rich nations are facing “one of the largest boom-bust cycles” to hit the market in more than 100 years.
“One thing many countries need to do also is provide adequate financing for small and medium-sized enterprises, really help provide the fundamentals behind a diversified economy,” Clements advised.
The IMF has also encouraged large oil revenue-dependent nations to “level the playing field,” creating equal incentives for oil and non-oil sector producers, Clements added. Proposed measures include ending subsidies to the oil sector, reforming labour markets, and reallocating revenue to stimulate the private sector.
Oil prices have collapsed substantially over the past two years, from a high of more than $108 in June 2014 to less than $30 per barrel in January 2016. Prices have rebound modestly in the recent months to slightly below $40 per barrel.
Official estimates by the IMF in April forecast global commodity prices would remain weak for a longer period of time, increasing pressure on commodity dependent economies.
The World Bank issued a similar forecast earlier in the year, citing slow global economic growth and oversupplied commodity markets as key contributors.
http://www.anirudhsethireport.com/imf-oil-producers-must-diversify-to-mitigate-likelihood-of-volatility/
BACKDOC:  THE REAL ISSUE IS THE DOLLAR PEG!
S.A. NEEDS PURCHASING POWER SIMILAR TO ITS NEIGHBORS!
THEY HAVE EXPRESSED THEIR DESIRE TO DEPART FROM IT.
THIS WEEK WE SEE ARTICLES FROM THE UK PUTTING MILITARY SHIPMENTS ON HOLD.  THE U.S. SEEMS TO BE DOING THE SAME. SOMETHING IS DEFINITELY DEVELOPING!
WE MAY NOT KNOW HOW THIS PLAYS OUT BUT WE KNOW WHY IT WILL PLAY OUT, DON’T WE?  HEE HEE    DOC   IMO
Mountainman:  Looks Like The SAUDI’S are Caught between A Rock and A hard Place On One Hand……On the Other This is ALL about the Transition of OIL from the Current Petro Dollar to the SDR Accounts as Well…..The Hands are being Played and COORDINATION of this OIL CONVERGENCE is A Reality NO/{ONE} will be Able to Run From…….IMO
Blessings,Mountainman   (8)=New Beginnings……for Old Pains for New GAINS……
Thunderhawk:  Why Riyadh ‘Dumping’ Dollar-Denominated Bonds Will not Derail US Economy
In recent weeks, rumors have circulated that Saudi Arabia may sell $750 billion in US dollar-denominated bonds if 28 pages of the redacted 9/11 report are released. The information contained is said to show Saudi Arabia’s complicity in the deadliest terrorist attacks on American soil.
However, such rumors are “much ado about nothing,” William T. Wilson, a senior research fellow in the Davis Institute for National Security and Foreign Policy, wrote in an article for The National Interest.
The drop in global oil prices has seriously damaged the kingdom’s economy. Currently, Riyadh needs oil prices to be around $80 a barrel to balance its budget. This year, its fiscal deficit is expected to reach 19 percent of GDP. Last year, the kingdom saw a current account deficit of 8.2 percent of GDP. All of the above has forced Saudi authorities to begin liquidating reserves to cover financial shortfalls.
Saudi Arabia is the third-largest holder of US dollar reserves and a significant owner of dollar-denominated assets.
The author outlined several reasons why a possible sell-off by Saudi Arabia is highly unlikely to affect the US economy or global financial markets.
First of all, selling hundreds of billions of US dollars in American assets over a short period of time would be technically very difficult to execute, the article read.
But even if assuming the Saudis could, the move would result in the depreciation of the US dollar, which would result in capital losses for their remaining dollar reserves.
“With their sovereign credit rating having recently been downgraded, this scenario would hardly be appealing to the Saudi authorities,” the analyst pointed out.
Second, given that all dollar-denominated transactions pass through US transaction systems, after selling their dollar assets, Riyadh would then have to sell all or most of their dollar holdings.
However, switching to other currencies involves increased financial risks.
“The US dollar is still easily considered the greatest safe haven in the world compared to alternatives, such as the euro, that currently look very unappealing,” Wilson underscored.
Third, the foreign exchange market is liquid enough to handle a significant surge in foreign exchange transactions. Currently, global foreign exchange-rate markets are averaging $5 trillion in trading a day, 80 percent of it in dollars.
Furthermore, the figure of $750 billion looks like an overstatement. The Saudi Arabia’s sovereign wealth fund was valued at $750 in 2014, but has decreased to $685 billion in 2016. In addition, not all of their holdings are dollar-denominated.
Finally, in the event of a significant market shock where US Treasuries prices were to drop and domestic interest rates rise, the Federal Reserve could accommodate the movement by buying Treasuries through open-market conditions, according to the article.
“Dumping US bonds is not really an option for any country holding major positions. To the extent that the number of bonds the United States sells is a problem — and it is a problem — it is not because it gives others leverage over America. It is because it is reflective of decades of out-of-control spending, which must be addressed for the sake of the country’s long-term economic health,” the analyst concluded.
http://www.ooyuz.com/geturl?aid=11484834