Shanghai Companies Sign First Yuan Settlement Deals

July 6 (Bloomberg) -- Three Shanghai companies agreed to settle import and export contracts in yuan for the first time, as China seeks to reduce the role of the dollar in global trade.

Shanghai Silk Group, Shanghai Electric Group Co. and Shanghai Huanyu Import & Export Co. signed contracts worth 14 million yuan ($2 million) with customers in Hong Kong and Indonesia, Fang Xinghai, director general of the municipal government’s financial services office, said at a press conference today. Bank of Communications Co. and Bank of China Ltd. offered transaction services.

China, Russia and India have said the world economy is too reliant on the dollar and called for changes in how $6.5 trillion in foreign-exchange reserves are managed, before Group of Eight leaders meet this week. The settlement program and sales of yuan-denominated debt overseas are designed to make the currency more attractive for central banks to hold.

“This is a first step on the long road towards that target of making the yuan a global reserve currency,” said Nizam Idris, a strategist in Singapore at UBS AG, the world’s second biggest foreign-exchange trader. “That’s probably going to take five years or more.”

The central bank on July 2 allowed companies in Shanghai and four cities in the southern Guangdong province to settle trade in yuan with businesses in Hong Kong, Macau and Association of Southeast Asian Nations. Outside of special border trade zones, companies previously had to convert yuan into dollars or other currencies to settle international trade.

Exchange Rate Risks

“The yuan settlement program will help boost bilateral trade with Hong Kong and Asean nations,” People’s Bank of China Deputy Governor Su Ning said at the signing ceremony. “The yuan is stable compared with other major currencies. A stable yuan will help companies control exchange-rate risks.”
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Russia, India Question Dollar Reliance Before Summit

July 6 (Bloomberg) -- Russia and India said the world economy is too reliant on the U.S. dollar and called for changes in how $6.5 trillion in currency reserves are managed, as Group of Eight leaders prepare to meet this week.

“The dollar system or the system based on the dollar and euro have shown that they are flawed,” Russian President Dmitry Medvedev said in an interview with Corriere della Sera, repeating his proposal for a new international reserve currency.

Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said in a July 3 interview that he is urging his nation to diversify its foreign holdings away from the dollar.

The challenge to the dollar, a linchpin of world finance and trade since 1945, underlines the shift in relative economic power toward emerging markets and away from the developed nations that spawned the global crisis.

French Finance Minister Christine Lagarde, speaking yesterday at a conference in Aix en Provence, France, said that “we must explore better coordination of exchange-rate policy.”

Questions need to be asked about “the balance of currencies and the role of currencies in a world that has changed because of the crisis and the growing role of emerging countries,” she told reporters.

Bank of France Governor Christian Noyer said at the same conference, “We really need to make sure there is a greater stability between the big currencies in the period to come.”

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College Loan Crisis

Crushing College Debt

Lawyers tells $400,000 student loan horror story. (Bloomberg News)
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University leavers graduate to the unemployed queues

400,000 school and university students graduate this week. Many will go straight into the ranks of the unemployed. The head of the national jobs agency warned RT now is the worst time for young people to look for work.

When finance whizzkid Dmitry Marinchenko got into MGIMO University 5 years ago his future seemed made. Banks needed talent and were ready to offer a 170000 dollar starting salary, before bonuses. Today he graduates, to a different scene.

“It's a really tough job to find a job. I visited about 20-25 companies and most said I lacked job experience. Problem – a lot of layoffs, and experienced people on the market with same. I know about 10 people from my Uni’ who tried to find a job just as me… but a lot of them, well, have no response.”

The bloodiest carnage is among bankers and lawyers. But Yury Gertsiy, Head of the Federal Employment Service, says jobless numbers will rise across the board.

“This is the worst time to join the job market. Employers are most hostile to twenty somethings who have yet to prove their abilities. That's why by September the jobless rate will go up.”

In a year Russia’s official unemployment rate soared from 6 to 10%. Add those who don't register and the real rate is even higher.

These fresh-faced teens will now have to do battle with veteran barristers and financiers who've just got the sack.

Using Bubbles to avoid the Recession

Greed has reached a pinnacle now it's crashing. Time to buy gold. a new DVD by DonMcalvany , Alan Greenspan the father of modern bubbles...LOL..

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