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Canadian banking haven myth exposed

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Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your loans, guys and gals, because we are going into a high interest rate period. Very high. It will be the equivalent of going into the double digit interest rates we had in the 80s where many people threw their house keys at the bank and we had record numbers of ba

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E-cigarettes save lives, money

E-cigarettes save lives, money

"We know that cigarettes have thousands of chemicals in them and we know that they are killing us. They have been for over a hundred years. So now, the e-cig industry comes along with only one or two chemicals in their mixture and people are freaking out over these as well. Whe

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US inches closer to big bank charges

US inches closer to big bank charges

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Canada’s home sales top predictions; why a real estate crash is inevitable

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Comparing today’s recession/depression to the 1980 recession

Comparing today's recession/depression to the 1980 recession

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Why savers are getting screwed

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Geithner admits USA bankrupt to US Senate

Geithner admits USA bankrupt to US Senate

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World economies on verge of currency revaluations to deal with debt

World economies on verge of currency revaluations to deal with debt

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Is Obama the next Mugabe of Zimbabwe?

Is Obama the next Mugabe of Zimbabwe?

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US raiding foreign countries with dollars, not soldiers

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FDIC wants your retirement cash to save banks: Bloomberg

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burning us dollars

“.. just last week, the United Nations released a report concluding that the dollar should no longer be the world’s reserve currency because it is not stable enough. The dollar is down 5% over the past month, and even currency traders don’t see it as a safe haven any more.”

The US dollar would almost certainly fall to it’s appropriately value if the Chinese yuan were floating or at least allowed to appreciate. There’s no way for investors to run to the “safe haven” of the yuan in a growing Chinese economy so they’re only left with the Euro, the US dollar, and the Yen (to a lesser extent). Both the US dollar and the Euro should be falling against the yuan based on economic, financial, and trade data. Previously the Euro was valued too high so if the US dollar falls the Euro will be valued too high once again because that is where investors will run to. You can’t expect currency markets to follow the rules when not all players are playing by the rules.

The US talks a lot about letting the Chinese currency float. But in fact they take no action. Why? Could that be related to the fact China owns so much of their debt. If you look at the relative health of the US population it also suggest that long term productivity is far from guaranteed.

Add the potential for social unrest in both China and the US and we can’t so sure the picture is all rosy. Indeed, China and the US have become extremely interdependent, but with a market growing and a population 5 time the size of the US, China is likely to come on top. In 10 or 20 years the US will depend on China but China will not need to US anymore. I hope it does not come to that but the risk surely exist.

Undoubtedly, the debt is a potentially catastrophic issue for the US dollar and the US economy. Unless they take control of it they risk loosing their sovereignty.

Central banks start to abandon the U.S. dollar

There’s mounting evidence that central bankers have little faith in the greenback these days. Can we blame them? by Heidi N. Moore, contributor

There are those who would argue that the financial crisis was caused by over-enthusiastic worship of the Almighty Dollar. Call it brutal financial karma, but that church is looking pretty empty these days.

A new report from Morgan Stanley analyst Emma Lawson confirms what many had suspected: the dollar is firmly on its way to losing its status as the reserve currency of the world. We already knew that central banks have preferred gold to dollars, and that they’re even selling their gold for cash; now, according to Lawson’s data, it seems that those central banks prefer almost anything to dollars.

Lawson found that central banks have dropped their allocation to U.S. dollars by nearly a full percentage point to 57.3% from 58.1%, and calls this “unexpected given the global environment.” She adds, “over time we anticipate that reserve managers may reduce their holdings further.”

What is surprising is that the managers of those central banks aren’t buying traditional fall-backs like the euro, the British pound or the Japanese yen. Instead, she suggests they’re putting their faith in other dollars – the kind that come from Australia and Canada. The allocation to those currencies, which fall under “other” in the data, rose by a full percentage point to 8.5%, accounting almost exactly for the drop in the U.S. dollar allocation.

Call it diversification, if you must, but the trendline indicates that central banks are finally putting their money where their anti-dollar mouths are. The dollar has been in free-fall since 2007.

Last year, both China and Russia have questioned why the dollar should be the world’s reserve currency. (Naturally, they were advocating for the ruble and yuan).

And just last week, the United Nations released a report concluding that the dollar should no longer be the world’s reserve currency because it is not stable enough. The dollar is down 5% over the past month, and even currency traders don’t see it as a safe haven any more.

Related posts:

  1. Central banks begin dumping dollars; Bank runs beginTo sum the entire stories at the bottom: TAKE ALL YOUR MONEY OUT NOW and invest it in silver bullion, or keep it under the mattress. The press and financial...
  2. World central banks preparing for “monster” money printing“Investors should be preparing for a financial “cliff-edge” as the Eurozone and the US prepare for “monster” money printing exercises, according to RBS.” –MM In a note to investors last...
  3. Dollar loses reserve status to yen & euroThe Banksters have destroyed our currency. Time to wake up your fellow citizens of the Republic of the United States. Get rid of your cash. Take your 401K and switch...
  4. China ready to drop dollar peg“My goal over the course of the next year is for China to recognize that it is also in their interest to allow their currency to appreciate because, frankly, they...
  5. US Dollar Could Be Sacrifice For World CurrencyThe US consumer is no longer all-powerful – and it’s time to ‘re-balance’ The post-G20 fall-out continues. Robert Zoellick (former Goldman Sachs Exec)president of the World Bank, warned yesterday that...
  6. US Dollar Is Finished: China, Arabia, Russia SayPopular and unpopular economists (mostly unpopular according to the mainstream media) have been predicting the collapse of the US dollar as the reserve currency (or petrodollars) of the world for...

This entry was posted on Sunday, July 18th, 2010 at 1:44 am and is filed under Bankruptcy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Comments

  1. July 18, 2010 @ 6:05 pm


    With the central banks of both India and China picking up tonnes of gold, we can see where they think fiat currencies are held. Paper is only paper no matter what country’s name is printed on it.

    Posted by Viable Opposition
  2. July 19, 2010 @ 10:54 am


    Inflation is not coming. Deflation is the current cycle. the FED cannot print money. They must borrow money and tax the hell out of the American people. IMF will not allow US dollar to debase. FED has been instructed they will NOT be permitted to inflate by running the printing presses. Add to this the following formula: No lending + No consumer spending = DEFLATION.

    Get ready for the next great Deflationary Depression. Gold will not save you in deflation. Cash is king!

    Inflation is a long, long way off in the future. Have cash or cash equivalent and you will be able to buy real estate at ten cents on the dollar. The American people are not prepared for a deflationary depression. Things are going to get ugly and fast. Those hustlers pushing gold are making a killing at the expense of people who don’t understand that gold cannot rise in a deflation cycle. They will be wiped out.

    Kevin

    Posted by Kevin
  3. July 19, 2010 @ 3:47 pm


    @Kevin: Where did you get the information that says the US will not be permitted to inflate by running the printing presses? And what happens if the US runs them anyway?

    Posted by Yemisi

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