|
Every day, more and more news reports mention the imminent collapse of the dollar. However, the markets seem to ignore this and the dollar has been fairly strong the last half year. Here the NewsStage juxtaposition of opinions:
 The Financial Post:
The U.S. dollar's day of reckoning may be inching closer as its status as a safe-haven currency fades with every uptick in stocks and commodities and its potential risks - debt and inflation - are brought under a harsher spotlight. Ashraf Laidi, chief market strategist at CMC Markets, said Wednesday a "serious case of dollar damage" was underway.
The BBC reports that Japan is worried about the dollar: Japan's opposition party says it would refuse to buy American government bonds denominated in US dollars, if elected. The chief finance spokesman of the Democratic Party of Japan, Masaharu Nakagawa, told the BBC he was worried about the future value of the dollar.
Kitco offers a very interesting investigation, backed by graphs and macro economic numbers: If bond or currency traders detect that big investors in US-government bonds, - such as China, Japan, OPEC, Russia, and Brazil, have ceased to buy US Treasury debt, or worse yet, are becoming net sellers, it could spark a sharp slide in US-Treasury notes, sending yields sharply higher, and ignite a free-fall in the US-dollar.
The US-dollar’s surprising strength since last July was largely attributed to “de-leveraging” and “risk-aversion,” which are references to the unwinding of “carry trades,” in the foreign exchange market. On April 6th, famed hedge-fund trader George Soros remarked, “The US-dollar is not strong because people want to hold the dollar, but it’s strong because people have debt in dollars.”
The Russians have dumped the dollar according to Global Research: The US dollar is not Russia’s basic reserve currency anymore. The euro-based share of reserve assets of Russia’s Central Bank increased to the level of 47.5 percent as of January 1, 2009 and exceeded the investments in dollar assets, which made up 41.5 percent, The Vedomosti newspaper wrote. The dollar has thus lost the status of the basic reserve currency for the Russian Central Bank, the annual report, which the bank provided to the State Duma, said.
The Telegraph mentions that The Chinese yuan is preparing to overtake the US dollar as the world's reserve currency, economist Nouriel Roubini has warned.
In another article it states: The Chinese are worried that the decisions by the US and the UK to try to print their way out of economic trouble will end badly. The money creation could end up debauching the dollar and pound and inviting a global inflationary crisis.
In yet another Telegraph article, gold also hints towards dollar inflation: First and foremost, the bullish outlook for gold rests on the increasing likelihood of accelerating U.S. inflation in the years to come – and an associated unprecedented rise in investor demand for the yellow metal.
|
