Rumour has it that meetings have been taking places in countries with emerging economies such as India, China, and Brazil along with some of the current key players in the global economy, particularly certain Gulf States as well as Japan and Russia. These clandestine meetings are being held in the offices of finance ministers and central bank governors and they are discussing what was once considered unthinkable. The replacement of the US dollar as the World’s staple currency, especially when it comes to fixing the price of major commodities, crude oil and gold in particular.

Speculation about the switch is believed to be the force behind the sudden rise in the price of gold.

Apparently, key forces within the American financial institutions are aware of the discussions that are taking place, although they are being kept in the dark regarding specific details. According to unconfirmed reports, the US is particularly upset with their allies in Japan and the Gulf states, and are not expected to accept the matter lying down. By and large, if the dollar loses its place as the number one global currency, a risk of deepening divisions between Russia, China and the US over influence and commodities could become more intense.

Financial analysts predict that the transitional currency, should the move away from dollars actually transpire may not be another currency, and more likely gold. One thing for sure is that if the dollar falls of its plateau, particularly hard hit will the countries such as Saudi Arabia, Abu Dhabi, Kuwait and Qatar who are estimated to be holding more than $2. trillion in dollar reserves.

The decline of American economic power linked to the current global recession has been offset by China’s extraordinary rise as an emerging economic superstar. China today imports around sixty percent of its oil, much of it from the Middle East and Russia, and exports no fewer than 10 per cent of the imports of every country in the Middle East. These imports include a huge range of products from cars to weapon systems, food and clothing making it understandable why China would want to deal away from the now unstable and rapidly weakening dollar, especially when financial sources believe President Barack Obama will to too busy involved in saving the US economy to concentrate on the extraordinary implications of the transition from the dollar in 2018.

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Tags: Abu Dhabi, Banking, Barack Obama, Brazil, China, Credit Crunch, Crude oil, Currency, Economy, Financial News, Global Credit Crisis, global recession, Gold, Gulf States, India, Japan, Kuwait, Money, Money Markets, Qatar, Recession, Russia, Saudi Arabia, Stock Markets, UD Dollar

As expected, the tightening of non essential spending in the west has led to the Chinese government to declare that its growth rate has fallen to below 10% for the first time in several years….all the way down to 9.9%. Some predict it could fall further to (wait for it) 8% next year!

This isn’t a surprise and it’s not a huge shock. China has very different fundamental to Western economies. For a start, it has a lot of savings. This will provide the economy a nice buffer against any downturn. Second, it doesn’t need to raise capital. The banks in China never got involved in many of the high risk games of their western counterparts. Even though the Chinese people are going through a stock market bust that has seen over 65% wiped off the value of Chinese shares and a property bust in once popular property markets like Shanghai and Beijing, the savings are still there…roughly $1.3tr in USD alone.

Secondly, the needle of the internal Chinese consumption engine is still in the red…their growth rate, though slower, is still electrifying. That being said, steel and other heavy industries are showing weakness form declining consumer demand at home and textiles and toys are showing weakness from declining demand abroad, particularly in the west. Recently, China closed 10,000 factories in a single city, but their government driven infrastructure projects continue as before…at a blistering pace.

It wouldn’t surprise me one bit to see China held up as a shining example to the West after the crunch has run its course. The hard working, saving, family orientated (and obedient…!) Chinese will be a model for us all. It’s only a matter of time before a politician tells us to “take a leaf out of Chinas book”.

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Tags: China, Economic Growth, Economy, Global Economy, Property Markets

HSBC, or the Hong Kong and Shanghai banking corporation was founded after the Opium War with China which Britain won. It forced China to allow Britain to sell Opium to its citizens while snagging Hong Kong and other humiliating concessions from the defeated Chinese.

HSBC was a vehicle for Britain to finance the growing trade between itself and China. Goods from the British Empire, especially India, were sold throughout Asia from its foothold in Hong Kong, which it relinquished in 1997. HSBC is the holding company of the world’s largest company, and it is the world’s largest banking group. Ranked by market capitalisation, HSBC itself is the world’s third-largest bank, though the company has other brands. In fact, it is worth close to twice as much as its five UK-listed rivals combined….as at 9^th October 2008 anyway!

HSBC has a global business, with a high concentration of that coming from Asia, even today. If you are looking for stability and a place to park your money, you could do a lot worse than HSBC.

Of the UK-owned banks, it’s the only one to survive the credit crunch relatively unscathed. While most banking shares are down at least two-thirds since last August, investors in HSBC have actually made money over that period, when you take into account the dividends.

Better still, some of its savings rates are extremely competitive. Its cash ISA, paying 6.25 per cent, is one of the top five on the market – although you will need an HSBC current account to qualify. Meanwhile, its online saver is not too bad – paying 5.25 per cent. Beware, however, that you will lose more than half of this interest in any month where you make a withdrawal. Still sounds better than the stock market to me right now!

HSBC Current Bank Account gives you more time to be yourself so you can concentrate on the more interesting things in your life.

HSBC current bank account comes with free everyday banking, 24/7 Internet Banking for your convenience and a hassle free account opening guarantee.

Apply Online now for an HSBC Bank Account

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Tags: Cash ISA, China, Credit Crunch, HSBC, UK, UK Banks