Dec 28 2006
The Dollar: The World Wakes Up
We came across a few more articles on the U.S. Dollar, and how the rest of the world is preparing to back off their holdings. A weakening dollar means more expensive imports and potentially higher rates for the severely credit addicted U.S. economy.
Dollar hit by news of central bank selling
“Patrick Fearon at AG Edwards said the greenback was hurt by a report that the UAE plans to convert eight percent of its foreign-exchange reserves from dollars to euros by late 2007.
While the UAE’s foreign-exchange reserves are relatively small at 24.9 billion dollars, “the statement follows a report late last week that Venezuelan energy minister Rafael Ramirez expressed interest in demanding euros instead of dollars for more of Venezuela’s exported petroleum,” he said.”
It’s not much compared to the trillions in circulation, but a few billion here and a few billion there, and pretty soon you’re talking about some real money. It will be the inevitable trend given the severity of the structural problems in the U.S. compounded with an insurmountable $4.6 trillion real U.S. federal deficit.
