While we are drifting away from topic, see Euro Benchmark borrowing costs below; surely the euro cannot survive this?

Euro Benchmark borrowing costs for 10-year bond yields

• 5% Italy
• 5.51 per cent for Spain
• 7.63 per cent for Portugal,
• 9.58 per cent for Ireland
• 12.90 per cent for Greece. & Greece’s 3-year bond yields hit a record of 17.67 per cent

You could make a contribution, Nev? Or suggest a new all encompassing topic?

http://ftalphaville.ft.com/blog/2011...pacity-puzzle/

NOT at all please. I watch for the valued comments daily! there could be an approaching financial ammegedon and I want to try and be informed of what UBS do in all this. Inflation will affect thier policies too! ie will currency always be available such as CHF if the USD collapses? or will UBS freeze or restrict the amount of currency that people can withdraw from thier account? we may be headed into HUGE deflation, so what will UBS response be on this? PLEASE do not close it.

It's beyond just UBS. It's the whole System. This is the reason the thread is intitled ....[was: How Safe is UBS?]

That's why they're looking to play a sequel to The Stress Test, the famous play that flopped from day 1.
Download the article by Oliver Wyman - the intro makes for some entertaining reading material. It will have you scratching your head. They are probably overdoing it, but looking at what is happening these days it does not look too far off.....

If you're interested in more reading sources I can recommend:
www.ft.com/alphaville
www.baselinescenario.com
www.zerohedge.com

You might also want to look up the very entertainign takes on the System written by Matt Taibbi (Rolling Stone magazine).

Paul

__________________

I agree that the Rolling Stone article is a worthwhile read. Zero Hedge is certainly interesting but be careful not to be too taken in by the conspiracy theorists...

The London School of Economics also published a report on the financial crisis and lessons to be learnt which you can find here:
http://futureoffinance.org.uk/

LOL you can't beat the group of....hmmmm... "interesting" individuals that post on Marketoracle!

I usd to love Willem Buiter's stuff - but now that he's been wisked away to toil @ Citigroup the world just ain't the same ;-)

P.

There's also:

www.itulip.com

www.financialsense.com/financial-sense-newshour (Austrian economics/market podcast)

www.thedailybell.com (often nuttier than the market oracle)

Don't panic. Think.
The dollar is not going to collapse and trigger armegeddon.
Why?
Because the dollar is too big to fail.
Why?
Because the dollar is the only reserve currency in the world.
Why?
Because there isn't an alternative.

Really? Can you name a single fiat currency in all of recorded history that did not eventually inflate into utter worthlessness?

I think that you left out the words 'soon' & 'currently':

As in: Because the dollar is too big to fail 'soon'.

As in: Because there isn't 'currently' an alternative

so was Lehman.

and I used to have long black hair... things change.

The dollar is not going to collapse and trigger armegeddon.
Why?
Because the dollar is too big to fail. => It's not going to fail.. it's just going to shrink
Why?
Because the dollar is the only reserve currency in the world. => and it will soon share it with the chinese yuan
Why?
Because there isn't an alternative. => ...but we're working hard to find it, we swears, don't we, my precioussss....

Or something like that

P.

Hm, this got me thinking, but I'm not savvy in finances or history thereof.

Has there previously ever been a merger of currencies? Not a replacement like the Euro, but like a merger between nations or after long-standing civil wars? Surely that would actually be a concept that could work?

It would tie the US and China even closer together, be that good or bad..

This is what the IMF has been suggesting. A lot. Their currency is a SDR - A 'Special Drawing Right' which is a basket of different currencies, seems likely to be used as a 'transition currency' if it is needed.

Carver,
You thought wrong. I purposely left out words like soon and currently because I didn't think anybody would obtuse enough to think there is the slightest chance of an alternative reserve currency in the foreseeable future.
One day that might come, but that day is a very long way off. Reserve currencies don't flash into an out of existence.
I can't speak for planet Carver but the rest of the world is behaving like we'll be living in a dollar centric world for decades to come.

I can buy that, except for the word soon
Why?
1. Because it's not in China's interests
2. A non convertible currency can't be a reserve currency

Is there potential?
Of course there is.
Soon?
Fat chance.

The difference between 'soon' and 'currently' and 'foreseeable' is largely semantic.

Now you have changed your statement pretty much as I suggested, I no longer fundamentally disagree with it.

It can be argued that the keystone of the dollar reserve currency status is the petrodollar. I've always found very plausible the theory that the reason for the Iraq invasion (and the rest of the fight for the middle east) was to keep oil trading in dollars. There was an interesting article published in the Daily Bell yesterday about this: http://www.thedailybell.com/1851/Ant...About-Oil.html

If the enormous amount of money and effort that the west spends attempting to control the middle east is indeed aimed at continued enforcement of the petrodollar (and not simply control of oil, democracy or WMDs), then the recent unrest seems to be the biggest challenge to the dollar as reserve currency since Saddam threatened to sell his oil in Euros.

So are Credit Suisse handing over Bank Information to the U.S Authorities like UBS did in 2008?

There are no other feasible candidates for a reserve currency?

Not 'soon' or 'currently'. But in the 'foreseeable' future, certainly - the yuan. Iran sells oil to China denominated in yuan, Russia deals with China using Yuan, just two weeks ago the Bank of India became the first Indian bank to offer trade settlement in yuan.

A 5 year CNYUSD chart would seem to suggest which currency is in the ascendant.

It's very hard for retail investors to hold yuan. Everbank in the US has yuan accounts, but at zero percent interest - so you're losing in real terms, but probably gaining in fx.

The Euro had a good chance until military interventions in the ME stopped it being used to buy oil, and various economic disasters in the periphery of the EU happened.

The transition reserve currency in the interim may be gold (or even riskier silver). It's paid something like 500% 'USD interest' over the last decade whilst waiting, and Chinese & Indian people are very into it. Of course, the Swiss Franc seems to have been almost as good an alternative.