Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelertoing Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

World Abandoning the US Dollar as International Currency For Trade

Currencies / US Dollar Dec 01, 2007 - 12:51 PM GMT

By: Julian_DW_Phillips

Currencies The foreign exchange markets are not solely about exchange rates. They are about values, smooth flowing of international trade, about trust and reliability. The sight of the $ falling over a long period of time, with bounces and recoveries that don't change the downward trend is far more than simply a drop in value!


The $ is steadily weakening, but more than a drop in the $' international value is happening here. The loss of confidence is in the $ is accelerating each time it slips one or more percent on a persistent basis, with small short recoveries being seen in the midst of this decline. How important is this loss of confidence? Critical for it precedes policies, which long-term will lessen the role of the $ to one of the world's top 5 currencies.

Growing surplus holders don't want to dump the $ for fear of losing value in the remaining ones in their portfolio, but don't think that a dumping of the $ is what it will take to remove it from the position of principal global currency. All realize that it is the knowledge of the declining value of the $ that will bring on a major toppling of that currency. So it is a choice of a steady ‘controlled' fall or a steep decline to disaster. To get perspective on the global scene what is the thinking out there?

  • China & neighbors : - China's premier, Wen Jiabao has expressed concern at the decline in the $, of which they hold $1,430 billion which total is growing by the day. He said it was becoming difficult to manage these reserves, while their value was under unprecedented pressure. China has stockpiled £700bn worth of foreign currency, and has only to decide to slow its accumulation of the U.S.$ to weaken the currency further. Yes, Europe is now its top customer so it is acquiring the € at a rapid pace, but it has to lower the $' presence in their reserves. So, what can they do? All they can do is to speed up the spending of them on assets, other currencies and whatever else they can and as quickly as they can. The warning by the Premier was reinforced by a Chinese central bank vice-director, Xu Jian, who said the $ was "losing its status as the world currency". Korea's central bank has urged shipbuilders to issue invoices in the local currency and take precautions against the weakened $.

  • The Middle East : - Kuwait, which cited imported inflation as the reason for its decision to drop the $ peg. The Dinar has gained 4.76% since the central bank switched to a currency basket. The Saudi Riyal rose to a 20-year high after the Fed cut rates on Sept. 18 and the Saudi Arabian Monetary Agency chose not to follow. This set off an appreciation of the Riyal from the time just after al- Suwaidi questioned of the United Arab Emirate's currency peg to the $. Saudi Arabia may be considering its first revaluation in 21 years to help bridge a divide with oil-producing neighbors worried about their pegs to the $. UAE Central Bank Governor Sultan Nasser al-Suweidi said last week he was under growing social and economic pressure to follow Kuwait's lead, although he would only act in concert with Saudi Arabia and three other states preparing for monetary union. Contracts to buy 12-months futures in the U.A.E. Dirham rose the most in at least 10 years this week after al-Suwaidi's comments, to trade at a 2.5% premium to the spot price.

  • Businesses are complaining about rising costs and migrant construction workers rioted in Dubai this month to demand a pay rise to compensate for savings lost due to the $'s slide. The U.A.E. economy ministry said exchange-rate reform would be one of the ways of containing inflation driven by the dollar's slide, which was making some imports more expensive. OPEC's $6 billion development fund is hedging its exposure to the weakening $, Director-GeneralSuleiman Jasir al-Herbish said this week. Last month the central bank of Iraq, four years after the United States invaded, stated that it wished to diversify reserves from a reliance on the U.S. $.

  • Other O.P.E.C. nations : - Venezuela backed an Iranian proposal to add the group's concern over the falling $ to a summit declaration to be made today. Saudi Arabian Foreign Minister Prince Saud Al-Faisal said that no mention of the $ should be made in the declaration because he didn't want the U.S. currency to "collapse." Nigerian Finance Minister Shamsudeen Usman said last Friday that his country's laws has been changed to allow it to diversify its foreign reserves out of the $. Angola may shift its international reserves away from the $, Finance Minister Jose Pedro de Morais said. Angola has $10.2 billion of foreign-currency reserves. De Morais said around 80% of the reserves are in the U.S.$. Three of the world's big oil exporters, Iran, Venezuela, and Russia, are demanding payment in the € rather than in the $. Iran insisted that Japan should make all its payments for oil in Yen, rather than in the $.

This list of important $-holding entities concerned about the $ and one that's getting longer by the day .

We are moving to the end of the U.S. $'s 62-year reign as the world's main international currency for trade, financial transactions and central-bank reserves? Unless something is done to give real value to the $, we believe that the process has to accelerate, rupturing the global monetary system, only to bring back Protectionism in the large trading blocs, exacerbating political and economic instability. We see this rising wave of concern moving forward to a major crisis. Any calming of the situation will cause a short-term strengthening of the $ to be followed by steeper declines.

On the back of this, confidence in the precious metal markets, particularly gold and silver, will climb as a counter to the decline of the $.

Please subscribe to: www.GoldForecaster.com for the entire report.

By Julian D. W. Phillips
Gold-Authentic Money

Copyright 2007 Authentic Money. All Rights Reserved.
Julian Phillips - was receiving his qualifications to join the London Stock Exchange. He was already deeply immersed in the currency turmoil engulfing world in 1970 and the Institutional Gold Markets, and writing for magazines such as "Accountancy" and the "International Currency Review" He still writes for the ICR.

What is Gold-Authentic Money all about ? Our business is GOLD! Whether it be trends, charts, reports or other factors that have bearing on the price of gold, our aim is to enable you to understand and profit from the Gold Market.

Disclaimer - This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Gold-Authentic Money / Julian D. W. Phillips, have based this document on information obtained from sources it believes to be reliable but which it has not independently verified; Gold-Authentic Money / Julian D. W. Phillips make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold-Authentic Money / Julian D. W. Phillips only and are subject to change without notice.

Julian DW Phillips Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Bob
08 Apr 11, 09:40
Dollar value

Don't we still own a bunch of gold? What is the value of gold right now?



08 Apr 11, 12:27
gold

Bob, there are very grave questions surrounding the quantity of gold the US holds. Until all the gold in Fort Knox and the other depositories is independently assayed and inventoried WRT any lease agreements to other countries, it's impossible to say what the value of these holdings is.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules