[KlaraNovikoffaZ]

Dollar loses reserve status to yen & euro


Net new reserve purchases at foreign reserve banks have ditched the dollar for the euro and yen. If the trend is permanent, existing hordes of dollars will slowly be released back on to currency markets, tanking the dollar's worth.

[exsmoker]

I'm sure br will tell us how it's a reflection of the stellar job Ben and Tim have done

[KlaraNovikoffaZ]

I'm sure br will tell us how it's a reflection of the stellar job Ben and Tim have done

Don't forget Bush/Paulson

Oh yeah, Meredith Whitney downgraded Goldman Sachs this morning. I bet that pissed them off to no end.

[AdvertisingPo]

Dollar loses reserve status to yen & euro


Net new reserve purchases at foreign reserve banks have ditched the dollar for the euro and yen. If the trend is permanent, existing hordes of dollars will slowly be released back on to currency markets, tanking the dollar's worth.

It had to happen, why keep buying something that is going to lose money.

[kasandrasikl]

Awesome, maybe we can put these guys on the US billion dollar bill.



Isn't that the Rock Band font?

[KlaraNovikoffaZ]

On a serious note... it's time to scare people into buying houses by creeping the interest rates up.

This 0% crap is killing us. According to the Post, the USD has dropped 10% in value in just 3 months. We're not feeling it here locally but every foreign investor that holds our money is really not happy, and if they unleash their dollars we WILL feel it.


Now on a positive note, if we do nothing and the dollar crashes, China will be forced to release their peg on the yaun. That will spell double-trouble for Wal-Mart and most of China's export economy since they have to let their currency float freely.


That could will also mean US exports will skyrocket and we become the next new foreign tourist destination. "Come and see a 1st world become a 3rd world nation, overnight!"



The Revolution Will NOT be Twittered.

[KlaraNovikoffaZ]

Awesome, maybe we can put these guys on the US billion dollar bill.



Isn't that the Rock Band font?

I like how the rock on the top has a frowny face.

[Senasivar]

The thread title is a bit of an exaggeration. The dollar has lost out on new cash, but in total it is still 62% of reserves.

But that doesn't change the fact that over the last three months the foreign economies have moved away from the dollar.

[KlaraNovikoffaZ]

The thread title is a bit of an exaggeration. The dollar has lost out on new cash, but in total it is still 62% of reserves.

But that doesn't change the fact that over the last three months the foreign economies have moved away from the dollar.

It's no longer the majority of net new purchases, according to the IMF.


If the trend continues and as dollars are sold and bonds expire, that also means we'll drop to minority status in reserve holding accounts around the world. What that also means is that there will be more dollars flooding into the market and fewer buyers who want them at the price they are now.



That means we have to stop printing money pronto or we will face a devaluation.

Ben B better get his God damn act together and start raising interest rates. Start with 4% now to get the foreign bankers to shut up.

[Gasfghj]

Well, that's not good.

[Usogwdkb]

Remember the carry trade gambit discussed here.?...well it's Obama's Big gamble and it could actually lead to a currency crisis as we push our creditors...right now they kind of have no choice although they are trying to ween themselves off the US export market in particular.

The dollar plunges! How scared should we be? Economist Simon Johnson says not as much as you think—it’s part of Obama's plan to restart the manufacturing sector and win the midterm elections.

The dollar’s value plunged Tuesday, while gold simultaneously hit a record high ($1,045 per ounce). You might think this would worry the administration and send the Treasury secretary to the microphones in an attempt to head off further collapse in the currency. Do the darkest days of the Carter administration loom again, with inflation and unemployment both rising, apparently without limit?

Far from it—the last few weeks of dollar depreciation is an amazing stroke of luck for the Obama administration, admittedly facilitated by their adroit maneuvering in the corridors of high international finance. If it lasts—and they need some more luck—this could save the midterm elections for the Democrats.

The near-term causes of the latest round of dollar decline are obvious. Australia’s central bank raised interest rates slightly on Tuesday. By itself, this would not be an exciting development, but it comes fast on the heels of the G-20 Pittsburgh summit in which all participants (including Australia) seemed to imply that “tightening monetary policy” (i.e., raising rates) was some way off.

So if Australia begins to tighten—an implication that its economy is picking up—market participants reckon that more commodity producers and other parts of the Pacific Rim will soon feel the need to do likewise. At the same time, the U.S. has signaled—most recently on Monday, in the powerful form of William Dudley, president of the New York Fed—that interest rates here will remain low for the foreseeable future.

If you can borrow in dollars and buy Australian (or Korean or Chinese, etc) government debt, you are in what is known as a positive “carry trade”—because of low interest rates here, you pay close to zero to borrow the dollars (e.g., if you are Goldman Sachs and have unfettered access to the Fed’s discount window) and you can invest in Australia at more than 3 percent interest (or you can plunge into speculative Chinese automotive stocks, as Goldman is now doing).

And if you think interest rates will rise in the rest of the world before they do in the United States, because the dollar is on its way down, then this carry trade becomes a one-way bet: You make money on the carry, you hold foreign currency while the dollar falls, and then you pay back your loan in depreciated dollars.

If the U.S. were concerned about the dollar weakening—say, because of its impact on inflation—it could counteract all of this by making warning noises about potential intervention in the currency market: If you borrow heavily in dollars to lend in Chinese renminbi, you can be easily rattled by the prospect that G-7 industrialized nations will intervene in a coordinated manner to strengthen the dollar (as they have in the past).

Continue: Obama's Secret Jobs Plan - Page 1 - The Daily Beast

[KlaraNovikoffaZ]

This is why OPEC is pushing so hard to get oil repriced in some other currency, because we're sitting back and letting the dollar deteriorate to nothingness making the value of their exports equally worthless (oil prices do track inflation/deflation, but it's a slow correction).

If we re-raised interest rates then foreigners would be buying dollars and US debt in larger amounts, savings rates would rise even further since holding loans would be more attractive to investors, credit would flow better as more lenders enter the picture, etc.


If you added a dollar gas tax on top of this, you can continue to keep oil consumption declining at the same time you get more money flowing back in chasing the prevailing lending rates. Plus, a large tax would bring in a gusher of money back into the Treasury to repay debt we already wrote up.

[Nurse_sero]

A recent CNN television broadcast gave the impression that Esperanto aims to be a single global language. The comparison was with a global reserve currency, instead of the US dollar.

See YouTube - cnn - g20 - one currency and one language?

May I put the record straight? Esperanto intends to be an auxiliary language, or a second language for all.

Please see lernu!: Main Page for confirmation.

[Breevereurl]

Meat - constantly posting on the troubled dollar

Drudge - constantly posting on the troubled dollar


Hmmm




On Tuesday, Matt Drudge ran a headline about the weakening U.S. dollar on his website, Drudgereport.com. In and of itself, that would be unremarkable, except that it was the 18th time Drudge had posted a link to a story about the weak dollar this month.


And October was only 20 days old.


Clearly, Matt Drudge has developed a fascination with the declining U.S. dollar.


“He’s fixated on it,” said Tom Rosenstiel, director of the Pew Research Center’s Project for Excellence in Journalism. “There’s no question that Drudge can alter what people are paying attention to.”

Zeroing in on the dollar's decline - Eamon Javers - POLITICO.com