[grabby]

A shift of only 2% of the dollar into euros dropped the dollar this last month

The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency.

Market liquidity is traditionally low in December, and many traders have locked in profits, potentially reinforcing volatility.

Russia and the members of the Organisation of the Petroleum Exporting Countries, the oil cartel, cut their dollar holdings from 67 per cent in the first quarter to 65 per cent in the second.

Meanwhile, they increased their holdings of euros from 20 to 22 per cent, the BIS said. The speed of the shift may help to explain the weakness of the dollar, which recently fell to a 20-month low against the euro and a 14-year low against sterling.

The BIS, the central bank for the developed world’s central banks, is customarily cautious in its language. However, it noted: “While the data are not comprehensive, they do appear to indicate a modest shift over the quarter in the US dollar share of reporting banks’ liabilities to oil exporting countries.”

The review shows that Qatar and Iran, whose foreign exchange policy has sparked widespread market speculation, cut their dollar holdings by $2.4bn and $4bn respectively.

Such shifts may be modest compared with the total assets held, but they provide a crucial indication on future thinking.

Currency switches are likely to be progressive, subtle and discreet, as untoward attention could hit the dollar, lowering the value of depositors’ remaining dollar-denominated assets.


so this is going to happen 30 MORE TIMES? (65%)

cut and paster this address to read the original file.

we'll be bankrupt long before then.

http://www.ft.com/cms/s/277471c2-8889-1 ... e2340.html

or click here dollar drop to euro

[evilgenius]

US interests buying into the development of China's banking system would work the same way as it did for the Dutch and the British banking interests in the US in the nineteenth century. The best way to participate in an industrial revolution is to finance it. That way the profits can be gotten in the ascending currency and repatriated via bond and security purchases back home. The repatriated dollars support the currency by going into US treasuries and they support the positions of the rich by targeting selected equities.

Oh, and a weakened yuan would be an instrument to plunder Europe and Russia and the rising ME money powerhouses. As Chinese pricing invades those regions and absolutely erases whatever competition it will serve to transfer wealth to China and thus to the financiers.

The only wrench in the gears is the advent of PO. Without a carefully managed recession in the US to both reduce demand and teach Americans some critical lessons about conservation this plan can't go forward. The gluttons would eat everything at the feed trough before the cheap working hordes had a chance to select their way through the ranks far enough to find those amongst them that will work cheaply enough to offset the lack of plentiful resources.

Life for the average American will become more like that for the average European, conservation will become a part of daily life. Life for the rich won't, however, be any different.

[Revi]

$this->bbcode_second_pass_quote('', 'T')he only wrench in the gears is the advent of PO. Without a carefully managed recession in the US to both reduce demand and teach Americans some critical lessons about conservation this plan can't go forward. The gluttons would eat everything at the feed trough before the cheap working hordes had a chance to select their way through the ranks far enough to find those amongst them that will work cheaply enough to offset the lack of plentiful resources.

Life for the average American will become more like that for the average European, conservation will become a part of daily life. Life for the rich won't, however, be any different.

[spear]

This is a very interesting scenario.
If the Chinese go for it.They may not and leave the US financiers holding their nuts.
Or they may go for something in part.
And also China still needs oil to get this whole boom up and running so that leaves a lot to be said because interests other than US have the oil.
US controlled oil is not enough to fuel two economies such as China-US.
It wasnt too long ago that they got Hong Kong back so maybe they arent ready for any more deals like that.
Would not Russia and Europe foresee this and take appropriate measures,and what could those measures be?
What would be a timeframe for a scenario like this if it came to pass?

[Denny]

There is so much pessimism on this thread about the U.S. dollar and the economy in general.

I recall not so many years, thirty or so, ago it looked like Great Britain was down for the count. Their reign as a manufacturing superpower had already ended, and their world empire had become more figurative than real. Somewhat as it looks with the U.S. today.

Perhaps, the U.S. will increase more and more in cultural and service "industries" to the world. Just maybe, the emphasis on free enterprise will cause the U.S.A. to leapfrog over all others to lead in environmentalism and sustainable energy production.

I don't know if this likely, but it is surely possible and the U.S.A. is generally held to be the most imaginative and economically proficient country in the world. I recall many years ago, when it seemed like Japan would take over auto production, it was pointed out by some that they were good technocrats, good at execution and planning , but not at real invention. Mind you, on that score, it doesn't look so good for the U.S. today, but that is now, who can say what promises lurk over the horizon tomorrow? Maybe a new leader and a new national purpose can be a catalyst for a strong dollar and a strong economy. Maybe a new FDR of sorts.

Maybe its to to put on a happy face, and ponder a better tomorrow, just as Annie did in the musical.

[Ancien_Opus]

What saved Great Britain in the last 20 years was North Sea oil.

[Micki]

Interesting thought to include PO in the China/US meeting.

If China believes PO is here, they know the global industrial boom isn't going to go on forever.
Furthermore US consumes 25% of the worlds oil output and that helps keep the oil prices up.

This would actually give China more reason to wreck the US economy as it would leave more oil for the players left standing and oil prices would most likely drop, so they could even benefit from it.
The only question is if China is strong enough yet to take the ripples a collapsing US would make in the world economy.

There has definetly been more talk lately about China encouraging internal consumption to provide some shield from external drop in demand.

[threadbear]

$this->bbcode_second_pass_quote('Micki', 'I')nteresting thought to include PO in the China/US meeting.

If China believes PO is here, they know the global industrial boom isn't going to go on forever.
Furthermore US consumes 25% of the worlds oil output and that helps keep the oil prices up.

This would actually give China more reason to wreck the US economy as it would leave more oil for the players left standing and oil prices would most likely drop, so they could even benefit from it.
The only question is if China is strong enough yet to take the ripples a collapsing US would make in the world economy.

There has definetly been more talk lately about China encouraging internal consumption to provide some shield from external drop in demand.

[Micki]

For those who are interested aljazeera's show "People And Power: Death of the Dollar" is now available on youtube.

It also features interviews and comments on the gold surpression scheme.

The picture quality sucks, but it is the audio that is interesting.
It is just a 10min clip and well worth a check out if you are new to the topic.

People And Power: Death of the Dollar

[spear]

The way China will encourage consumption will be by internal growth.(eventually)
I read somewhere that China plans on building 20 mega cities to house 200million of its people.(sorry,no link).
Now that is HUGE.I dont know if something like this is viable in this day and age but if it is,thats a lot of resources and 200million new consumers.Not to mention the job and real estate markets over there will boom.
If China focuses on internal growth,they dont need the US as a customer.
I can see that international financiers all smell growth in China and are looking for a piece of the pie,but I would also imagine that Chinese financiers vision their yuan as becoming stronger as China grows.

[MrBill]

$this->bbcode_second_pass_quote('Ancien_Opus', 'W')hat saved Great Britain in the last 20 years was North Sea oil.

[MrBill]

Micki wrote:
$this->bbcode_second_pass_quote('', 'T')his would actually give China more reason to wreck the US economy as it would leave more oil for the players left standing and oil prices would most likely drop, so they could even benefit from it.

The only question is if China is strong enough yet to take the ripples a collapsing US would make in the world economy?

There has definetly been more talk lately about China encouraging internal consumption to provide some shield from external drop in demand.

[perdition79]

$this->bbcode_second_pass_quote('Micki', 'F')or those who are interested aljazeera's show "People And Power: Death of the Dollar" is now available on youtube.

It also features interviews and comments on the gold surpression scheme.

The picture quality sucks, but it is the audio that is interesting.
It is just a 10min clip and well worth a check out if you are new to the topic.

People And Power: Death of the Dollar

[Petrodollar]

..an fyi article from the German perspective...

SPIEGEL ONLINE - December 12, 2006, 04:45 PM

URL: http://www.spiegel.de/international/spi ... 06,00.html

$this->bbcode_second_pass_quote('', 'G')LOBAL ECONOMY
The Fall of the Mighty Dollar
By Christian Reiermann

Is an end of an era looming in the foreign exchange markets? The dollar has been depreciating against the euro for weeks. Currency experts and the German government don't yet see this as cause for alarm. The US currency's role as a lead currency isn't as important as it used to be, they say.

[TommyJefferson]

$this->bbcode_second_pass_quote('MrBill', 'S')o I do not think China's ability to rule the world through economic supremacy is anywhere close at hand, just as Japan's growth was impressive as well, but ran up against the natural limits of diminishing returns.

[MrBill]

$this->bbcode_second_pass_quote('TommyJefferson', '')$this->bbcode_second_pass_quote('MrBill', 'S')o I do not think China's ability to rule the world through economic supremacy is anywhere close at hand, just as Japan's growth was impressive as well, but ran up against the natural limits of diminishing returns.

[MrBill]

Reading Der Spiegel is a good way to practice your German because it is simple to read, but as far as indepth analysis it is like reading Business Week magazine which from content is a little bit like The Economist Lite Edition.

$this->bbcode_second_pass_quote('', ' ')The decline in the dollar also has its advantages. For Germany, the greatest advantage is that Germans pay less for oil. The oil price is mainly set in dollars worldwide. If the dollar declines, the same amount of oil costs Europe fewer euros, and the money the Europeans save can be spent on other goods.

[spear]

Your right Mr.B,I dont have a clue about world finance.Im just trying to decipher all this so I dont take a beating and whatever is left of my lifes labor after the beating dosent get taken away from me by the tax man,and Im sure you know how that works over here.

Even with my limited knowledge of these things,I cant see how eventually the yuan isnt going to go up against the dollar.I can see how the Chinese are keeping it down now ,but somehow it seems as something which will be unavoidable.

Seeing as how the US banking delegation goes to China within the next few days ,and the Chinese are already starting to take a beating on their USD holdings, things wont be as rosy as some may suggest.
What I have deduced is this:
I cant see no way in hell how the US is going to get that deficit down anytime soon,and since its just rising monthly,
somethings got to give, unless there is a way to rebound with a deficit like that.
I dont know.
Sure the interested parties will try something 'creative',but somehow to me,that all seems like temporary coverup.

One can google "US banking delegation to China "and get an idea of whats going on in the next few days.
From the various articles I read,it seems as the US is going to try and flip it all around and make it look as like China is the bad guy and they robbed the US with pirated goods and soft trading laws etc.

[MrBill]

Well, to be honest, I am as frustrated as the next person. Asset price inflation has also robbed me of my hard earned savings because it was difficult to buy assets that were already over-valued and looked too expensive by traditional valuations. Therefore, one missed the next bubble and the one blown-up after that. All the while the less informed just buy into the rally and reap the benefits of being in the right place at the right time.


Here is something from The Capital Spectator today:
$this->bbcode_second_pass_quote('', 'T')he Economist this week wrote that the combination of the petrodollars born of crude oil sales and China's export machine is enormous. What's more, the petrodollars dwarf even China's export-driven cash stash. "At the global level, the biggest counterpart to America's deficit is the combined surpluses of the oil-exporting emerging economies," The Economist advised. "They are expected to run a total current-account surplus of some $500 billion this year, dwarfing China's likely surplus of $200 billion."

When America pays oil exporters and China dollars in exchange for energy, electronics and other goodies, where do those dollars go? A fair chunk is reinvested back into America by purchasing Treasuries, stocks, and an assortment of other assets. This liquidity is sufficiently large so as to alter the capital markets. How's it altered? That's a matter of some debate, but we have our suspicions, starting with the strange state of affairs that's delivered bull markets across the board in all the major asset classes. Would such an astonishing run of bull markets survive without the degree of global liquidity?

Investors must decide if the mass of global liquidity will keep bubbling and flowing into all the asset classes, regardless of valuation. As challenging as that question is, it's all the more prickly if, as some predict, the economy will materially slow in 2007.

[Doly]

$this->bbcode_second_pass_quote('MrBill', 'M')aybe mold