Chinese companies to build 700 coal plants in and outside China www.mining.com

Coal is dead. Coal mining is a sunset industry. Donald Trump is crazy if he thinks he can revive Big Coal. While all these statements have become part of global consciousness when it comes to the future of the much-maligned fossil fuel, a report by Urgewald, a Berlin-based environmental group, casts doubt on at least the first two assertions.

Forget Bitcoin. Have You Heard of IMFcoin? www.wsj.com

Forget Bitcoin, think IMFcoin. The head of the International Monetary Fund has been musing about the future of money, and thinks there is a decent chance it will come from the guardian of the world’s monetary system.

Christine Lagarde, IMF managing director, held up the organization’s special drawing rights (SDRs) as having a possible digital future at a Bank of England forum last week, and put what she said was a “question mark” over whether SDRs could replace existing international currencies. “It’s not a far-fetched hypothetical,” she said, and the IMF needs to be ready.

The SDR is a long way from the digital disruption that cypherpunks hope cryptocurrency can deliver. Dreamed up in the 1960s, SDRs are a kind of artificial currency whose value depends on other currencies. Dollars are a part of it, but so are euros, sterling, renminbi and yen. An SDR is a bit like a currency mutual fund for central banks.

For decades it has been an afterthought in the global financial system, but the IMF has spent the past year thinking about how to give SDRs a broader international role. So could some sort of crypto-SDR eventually replace the dollar as the world’s money?

The idea has heavyweight support from those who want to diminish the dollar’s status, notably in China. People’s Bank of China Governor Zhou Xiaochuan called in 2009 for wider use of the IMF’s money to “gradually replace existing reserve currencies with the SDR,” one reason for the latest review.

The reasons are well-rehearsed, and not digital. China—and other emerging markets—would like to diversity their risk away from dollars. They also worry about the inherent problem of using national money for global reserves. When the U.S. faces a conflict between domestic and international needs, it is likely to favor its voters over the world economy.

So what would digital SDRs add? When monetary economists are drawing up dream scenarios, they often come up with something similar to the “bancor” presented by John Maynard Keynes at the 1944 Bretton Woods conference. International trade would be conducted in bancors with rules about the size of overdrafts allowed, preventing imbalances getting too big.

SDR or IMFcoins would allow a much wider group to use the currency, supplanting the dollar in international trade and reducing both the big currency swings that can destabilize countries and the dangers of large current account deficits. Instead of representing a basket of currencies, the digital SDR would be a currency of its own, albeit one only used for international transactions.

A more limited alternative would try to speed global growth. At the moment, countries hold big piles of dollars as a form of insurance against a balance of payments crisis, damping growth and distorting the world economy. If the IMF was empowered to act more like a global central bank, whisking up new SDRs on its own blockchain in a crisis, it would reduce the need for countries to hold reserves.

José Antonio Ocampo, a Colombian central bank board member also on the IMF’s expert group considering the future of the SDR, thinks annual SDR issuance could be worth $200 billion to $300 billion a year.

“Countries would not have to accumulate reserves, [which] generate a general contractionary effect on the global economy,” he says.

The prospect of giving the IMF the ability to execute global helicopter drops of money worries believers in strong currencies.

Jim Rickards, an author and former general counsel for failed hedge fund Long-Term Capital Management, thinks SDRs will be issued to reflate the system in the next crisis, hurting the dollar’s reserve status. “It’s all converging on a world where the dollar will just be a local currency like the Mexican peso,” he says. He is a longstanding advocate of using gold to back money to limit the supply.

The real opposition to an IMFcoin is likely to come not from fans of gold, but from defenders of the dollar’s central role in the global system. Sterling once held the role of global reserve currency, and spent decades in decline once it was abandoned in favor of the dollar, reducing demand for pounds.

The benefit of having the reserve currency is obvious, and much-envied: Americans can offer to buy real things from the rest of the world with money the Federal Reserve creates out of nothing, and other countries have little choice but to accept. The U.S. gets lower interest rates than it otherwise would and can run a permanent current-account deficit with impunity—just so long as it remains the reserve currency.

There is a downside to having the reserve currency, though. The purchase of dollars by the rest of the world makes it harder for the U.S. to devalue to support its own economy. When the banking crisis hit in 2008 investors piled into the reserve currency, and the dollar soared 21% against its trading partners before the panic abated in March 2009. Instead of the weaker currency central banks usually aim for in a recession, the U.S. got a stronger currency.

There is little chance U.S. politicians will want to give up what a French finance minister once called the “exorbitant privilege” of the dollar, no matter what Ms Lagarde, another former French finance minister, might suggest. As she noted, the IMF would need a “geopolitical situation that would be propitious” for the changes she is speculating about to happen.

China wants it, and has been encouraging the issuance of SDR-denominated bonds to try to create a true alternative to the deep and liquid markets of the U.S. (China’s had little success so far, with only two SDR bonds outstanding, according to Thomson Reuters). Ms. Lagarde’s paean to the future suggests she likes the idea. Luckily for those holding dollars, the geopolitical situation is still tilted in favor of the U.S., and there is little prospect we all be trading in IMFcoins any time soon.

Green Climate fund to fund Mongolian solar partk www.news.mn

Green Climate Fund to fund Mongolian solar park

The Green Climate Fund (GCF) has approved funding for 11 climate finance initiatives, including USD 8.65 million (EUR 7.4m) for a solar project in Mongolia.

Bitcoin’s Rise Happened in Shadows of Finance. Now Banks Want In www.bloomberg.com

At first, bitcoin was a way to make payments without banks. Now, with more than $100 billion stashed in digital currencies, banks are debating whether and how to get in on the action.

Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein tweeted Tuesday that his firm is examining the cryptocurrency. Other global investment banks are looking into facilitating trades of bitcoin and other cryptocurrencies, according to industry consultants. Bitcoin has surged more than 300 percent this year, drawing the attention of hedge funds and wealthy individuals.

“They’re clearly receiving interest from their clients, both from retail investors and on the institutional side,” said Axel Pierron, managing director of bank consultant Opimas. “It’s highly volatile, it’s highly illiquid when you need to trade large volumes, so they see the opportunity for a new asset class which would require the capability of a broker-dealer.”

But bitcoin presents Wall Street with a conundrum: How do banks that are required by law to prevent money-laundering handle a currency that’s not issued by a government and that keeps its users anonymous?

The debate has played out in the open recently, with JPMorgan Chase & Co. CEO Jamie Dimon and BlackRock Inc. CEO Larry Fink saying that bitcoin was mostly used by criminals, while Morgan Stanley chief James Gorman took a more measured stance, saying it was “more than just a fad.” On Wednesday, UBS Group AG Chairman Axel Weber, a former president of Germany’s central bank, said he was skeptical about bitcoin’s future because “it’s not secured by underlying assets.”

There’s even tension within some banks. On the same day Dimon trashed bitcoin, calling it a “fraud,” his firm’s private bank hosted a panel stocked with cryptocurrency investors.

Bitcoin Was Cool, But Its Blockchain May Be Useful: QuickTake

Handling bitcoin would invite scrutiny from every major U.S. regulator, according to Joshua Satten, director of emerging technologies at Sapient Consulting.

“From the perspective of the U.S. Treasury, do you classify it as an asset class or a currency?” Satten said. “If banks are starting to manage and hold bitcoin for their clients, you would have the OCC and the FDIC looking at how they classify the assets on their balance sheet and how they state the assets for the portfolio of a client.”

China’s Crackdown

And banks need to avoid antagonizing governments that are increasingly concerned about this area. For instance, China is cracking down by shutting cryptocurrency exchanges.

Then there’s the risk that stems from its high volatility and lack of correlation to other major assets. “What are they going to do if bitcoin drops for a given client and they’ve given that client a ton of leverage on margin, and that client only has assets in bitcoin?” Satten said.

Derivative contracts could help. CBOE Holdings Inc., the owner of the Chicago Board Options Exchange, announced in August that it plans to introduce bitcoin futures this year or next. That could help traders hedge positions. Banks are also exploring creating derivatives and using bitcoin in international trade finance to avoid exchanging currencies, Pierron said.

What isn’t in doubt is the interest from some investors. Hedge fund manager Mike Novogratz plans to start a $500 million hedge fund to invest in cryptocurrencies, initial coin offerings and related companies, which would be the largest of a growing group. There are 75 funds investing in the space, according to Autonomous Research.

Bitcoin already has a toehold in mainstream finance. In July, Falcon Private Bank said it was the first Swiss bank to offer bitcoin asset management to its clients. In the U.S., both Fidelity Investments and USAA let clients view their bitcoin balances if their accounts are linked to the Coinbase exchange.

Drugs, Ransoms

The qualities that have made bitcoin the payment form of choice for drug deals and ransom demands -- it runs on a decentralized web of computers around the world that sidesteps regulators and banks -- are also what makes it hard to control by governments. Further adoption of bitcoin may require central banks and regulators to come to a consensus on how the new digital currencies fit into the existing framework.

“Can it be sanitized for the reserve banks and regulators and compliance departments of banks around the world so that you can root out the gray money, the stuff that you hear about coming from darknet markets?” Jesse Chenard, CEO of blockchain startup MonetaGo, said Tuesday at a conference held by Columbia Business School. Banks need “to have some assurances of who they’re transacting with and the provenance of that coin.”

Chile earthquake lights fire under copper price www.mining.com

Copper futures trading on the Comex market burst higher in New York on Thursday after an earthquake in the main copper producing region of Chile prompted traders to chase the metal higher.

High representative of UN emphasizes Mongolia's effort in LLDCs www.montsame.mn

Ulaanbaatar /MONTSAME/ E.Odbayar, Ambassador-at-Large and Interim Director of the International Think Thank for Landlocked Developing Countries (ITTLLDC), has met with Fekitamoeloa Katoa Utoikamanu, High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, at the UN House.

Saudi Arabia to produce iconic Russian Kalashnikovs under new deal www.rt.com

Russia and Saudi Arabia have reached a deal allowing the production of the iconic Kalashnikov assault rifle in the Gulf Kingdom.

The initial licensing agreement between the Russian state arms exporter Rosoboronexport and Saudi Arabian Military Industries (SAMI) was signed in Moscow on Thursday.
According to Rosoboronexport, the deal allows “production of Kalashnikov AK-103 assault rifles and cartridges for various purposes.”

October 5, 2017 trading report www.mse.mn

On October 5, 2017, 70,814 shares worth MNT 64.17 billion of 18 firms listed as Tier I, II, and III were traded. 8 firms’ shares increased, 7 decreased in price and 3 remained unchanged. Sharyn Gol JSC was the top performer, increasing 7.78 percent, whereas Shivee Ovoo JSC was the worst performer, decreasing 10.02 percent.

Hanoi and Ulan Bator reinforce cooperation www.hanoitimes.com.vn

Paying the honor to take charge in Vietnam when two countries’ tie in best lever ever, especially after the visit to Mongolia of PM Nguyen Xuan Phuc on July, 2016 and recent visit to Vietnam of Mongolian Foreign Affair Minister; Ambassador Dash Bilegdorj affirmed that the Hanoi-Ulan Bator friendship was developing in depth and width, facilitating new effective cooperation.

On Chairman of Hanoi’s People Committee Nguyen Duc Chung and newly-accredited Mongolian Ambassador to Vietnam, Dash Bilegdorj.
Ambassador is in high hope that, based on earlier MoU signed by Hanoi and Ulan Bator, two sides would make effort to expand the social-culture exchanges, enhance mutual understanding, create firm foundation for further collaboration. He suggested Hanoi authority to held Hanoi days in Ulan Bator as well as send a delegation along with some Hanoi’s enterprises to the Mongolian capital, seeking for new cooperation chance.
Congratulating Mongolia on its socio-economic achievements over the past years, Chairman of Hanoi’s People Committee Nguyen Duc Chung pledged to facilitate municipal-level exchanges and cooperation across the fields of diplomacy and trade, economy, tourism.

2017 budget adjustment bill moves to second discussion www.montsame.mn

Ulaanbaatar /MONTSAME/ A plenary meeting of the parliamentary session held Thursday carried out first discussion of the bill on 2017 state budget adjustment.