'Strong Dollar' paraire for G-7 Nations. Nigerians Beware

By
Iroabuchi Onwuka

The priority indicators, Ted Spread, Vix, Standard Deviation, Dollar Mold, Credit Spread, are giving away the facts that the economy is liquidity prone. Starting with signals on 'Standard Deviation' from last year's America GDP growth of 2% of a standard 4%. I shall argue that information from Futures and Hedge funds of 'June - September' this year suggesting a variance over 1% mean on 4% Standard deviation will show a cash simulation of 0.7 on wend, good for brokers/sellers and other fund of fund managers but not so good for the Treasury. That will suggest that the level of Drawdown by Bond closing in September 09 as per cash for cash reflect added volatility over this 1.25% mean on a probably 2% SD, there is a tendency that the skewness and Kurtosis will agitate at a faster rate forcing at 0.5 and persistent 0.5-0.6, meaning that volatility is likely the case as we approach other tranches in the Bond market. This will also mean that we not only have a enough money in circulation but much of the money is not getting re-invested in the economy, the money is rather moving from one Bank to other banks with a tendency towards Long term priority bond. That attarck formation of US Treasury and the Fed is to astutely provide the spadework on Short terms through WIN projects and other anti-inflation measures more important of which is Strong Dollar Mold.

Strong dollars is Redline for weak currencies in third world economies. Nigerian Naira is gonna get hammered as we approach December. Nigerian Naira is seriously depended on what happens to US dollars. If the move is strong driven, it becomes a warning signal for Nigerians tomind their books on the varying impact of rising dollars. The spiral case of the November 08 incident and the indigent effort of the former Nigerian Chairman Charlse Soludo in buying into the Naira through excess deposit of the dollars will re-occur if the Nigerian bankers association and their reps do not heed the signs from the G-7 meeting. In a sense, they are saying that We (G-7) under the umbrella on the dollar will push ahead because we have to and because of the problems of receipt from American IOUs several years ago. The trouble of inflation on the Nigerian national economy is still too much to permit any sensible littoral from Sanusi, his attention ought to be placed on what must be done to prevent the sure collapse of the Nigerian unit of exchange. The dollars is getting the cubic measure for interest rate and evidently as we speak, the Feds may not have fully discovered the point of Cubic Pendulum versus Time to implement any form of interest rate.

Many market analyst however believe that .25 raise will put the US economy over 5% this year alone, which is inflationary to the curve and hunker on the long term priority of the country's Bond Market. That the US FEDs are still holding their fire on the interest rate should mean that a lot of currency jobs must in still catching attention and the position on what to do, both long and short and strong and weak, is expected to occupy the time of most clearing houses of the world. When such part of interest rate in the US begin to add, there is very little resistance under developed economies will do, especially oil countries like Nigeria which has so-far suffered with the crisis that evinced its weight in the world last year. The only probably hedge we can hope for Nigeria and Nigerians is the act of watching the FEDS versus the Euro, when the rate begins to up, there is a chance for weaker options, and right before the Bond tranches of Europe due next year, Nigerian Central Bank should escape with more borrowing from the FEDS and the very cheap Europe. I mean more borrowing on per rate as a Billion Euro, which the option of blocking the 7 biilion transfer of international currencies to Nigeria afterwards. In many ways, the lending option of Nigeria given the current drama in the world is to be placed around the Europe as a point and forward for Dollars. With Nigerian finance minister, Mansur Muktah, on monday stating that the Federal Government will inject 2 Billion dollars into the Nigeria economy, the bad news is entirely out on the long term given the baby weight of Nigerian Bond market as more signals the ministers could point to a more liquid inflationary Nigeria market.



This afternoon on the Bloomberg Radio, reports came in on the interview with Jean Claude Trishe, showing that he is in favor a strong dollar as we head to the end of year. The mainpoint of the report is that Jean Claude Trishe, Benanke, Geithner, are particularly in favor of strong dollars. Information reaching us through the world bank and IMF meeting in Istanbul is that the financial ministers are very particular about certain rule to be implemented by US government, a position that is entirely Treasury, 'executive' in rendition and proffers a war with the more 'legislative' Federal Reserves of the world. What we are however learning is that international banking and activity in terms of loans and loaning between banks may shown soem signs of life in them. If the signals are right, Europe should be favored. The weight of world responsibility is shifted on the dollars and might mean the weakness of Euro by default. Shortfalls on Euro could provide a path for re-payment of the bad loans made to these foreign third world countries, some of which were down right illegal. The problem is not the legality of the loans but on the impact that such funding or funds of funding (which is really the case) would have on these third world countries. Crude oil driven economies are most likely to get the first punch, oil opens the window for international businesses yet it closes them just as fast, as easily as oil prices are expected to drop by way of strong dollars and a weakening of Euro.