There are reports coming one after another that Zionist Dollar’s days of glory may be over.
A good news for Muslims around the world.
Financial Standard - Doom dollar
ust a day after this space commented on the risky proposition of holding US dollars, Bloomberg reports overnight that world central banks are diversifying out of the greenback.
Data compiled by Bloomberg revealed that central banks have backed up their threat to dump the greenback by allocating 63 per cent of new reserves - amounting to US$413 billion in foreign currency holdings – in the second quarter out of the big dollar and into euros and yen. According to Bloomberg, “that’s the highest percentage in any quarter with more than an $80 billion increase.”
The persistent deceleration in the value of the US dollar since then indicates that the reduction of currency concentration risk by world central banks has spilled over into the third and fourth quarters of this year.
Whether financial markets like it or not, central banks cannot be faulted for acting the way they do. The law of supply and demand is set against the greenback. The world is swimming in the American currency at virtually no cost when you consider the current level of the federal funds rate (0.0 - 0.25 per cent).
Signs are slowly building that the US dollar could go the way of Sterling. The American dollar replaced the British pound in the 1930s as the world’s major reserve currency following Britain’s fall from the globe’s biggest lender to a borrower. Back then America was a major international creditor. Now it’s one of the largest debtor - if not the largest.
The problem is that US authorities are in a pickle given its weak economy. Self-preservation dictates tolerance of a weak currency and low interest rates to boost the domestic economy. The hell with everybody else!
This may be so - if the US does not owe everybody else…a lot. Just as is happening now, low interest rates could be helping America’s domestic economy but is simultaneously reducing the foreign investment returns on USD denominated assets.
At the same time, the Fed could not raise interest rates - despite its threat - anytime soon to attract foreign capital into American shores without risking further contraction in the economy. Oh no sir! Not while jobless Americans are still growing in number.
Tourists could indeed find themselves computing their spending money in euros or in yens or in the Gulf Common Currency in the future.
Or perhaps even in yuans. China after all is today’s largest creditor nation to the US and is fast becoming a leading economic superpower. Just as the US was in the 1930s.
Benjamin Ong
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