Dollar Catches Asian Flu - (quietly, quietly dollars are being sold)

[donsu]

http://www.atimes.com/atimes/Asian_Economy/GC11Dk01.html


They may be telling a different story to money markets, but Asian central banks have been quietly switching their dollar holdings to regional currencies for at least three years, confirm global banking data. In a further, and so far the biggest, setback for the greenback's status as the undisputed reserve currency, Japan on Thursday said it might diversify its holdings, though monetary chiefs later sought to play down the prospect. South Korea rattled currency traders with a similar announcement late last month, followed by a similar backtrack.

China, India, Thailand, Indonesia, Taiwan, the Philippines and Hong Kong have already started a sell-off, despite a diplomatic show of solidarity for the greenback that is prudently designed to prevent a crisis of confidence in exchange systems. The likelihood is that much of this outflow will never return to US dollars as economic interdependence within East Asia and the widening shadow cast by China's trading conglomerates are slowly transforming the traditional market structure.

The Bank of International Settlements (BIS), which acts as a bank for the world's central banks, has just released a study showing that the ratio of dollar deposits held in Asian offshore reserves declined to 67% in September, down from 81% in the third quarter of 2001. India was the biggest seller, reducing its dollar assets from 68% of total reserves to just 43%. China, which directly links the yuan to the dollar and is under US pressure to allow a freer movement of its currency, trimmed the dollar share from 83% to 68%.

-snip-
-----------------------------------


are the members of the bushgang selling their dollars too?

[NYC]

1. I'm sure Bush & Co.

have foreign currency accounts. They will not suffer.

[Quakerfriend]

2. It's happening all right

What I am wondering is, Should I buy Euros??

[Extend a Hand]

3. I don't know but I'm seriously

considering it as well

[Wright Patman]

4. My broker

is E.F. Hutton and when E.F. Hutton talks ....

Seriously, Euro Pacific Capital (http://www.europac.net) may be able to help anyone who is interested to diversify out of the U.S. dollar into conservative non-dollar-denominated assets. It is what they specialize in.

And, yes, I am a client. Before * is done, the U.S. dollar will probably be just as worthless as Deutschemarks during the Weimar Republic.

[rkc3]

5. Or should we move our mutal funds out of US holdings?

Any one with any thoughts on this?

[tubbacheez]

9. Need to study potential investments carefully.

Just on a general level, it's one thing to recognize the downside risk of holding an existing investment (i.e. dollar-denominated investments).

It's quite another to buy a new investment. The "anybody but Bush" concept may've been useful during the November elections, but it would be foolish to apply it to investing. This is because, however bad things are in your existing investment, there are always worse investments out there.

If you're willing to spend the time it takes to research foreign investments (and stay current), you might find some more bullish opportunities. Just realize this is going to be an ongoing habit.

I don't advocate trying to time the market... which includes watching the rise and fall of currencies. If you live in the U.S. and want to stay here, the quality of your information is going to be biased toward U.S. investments.

Obviously, don't invest in companies you ethically cannot support. But local investing has it's good points.

It's all about judging your risks and rewards.

[knight_of_the_star]

8. Get Swiss Francs

The Euro may be moving fast against the dollar, but the Franc is probably the most stable currency in the world.

[NYC]

6. China, Greenspan Rub Salt in Dollar Wound. (related article)

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1303032

[knight_of_the_star]

7. In a few weeks I'll be in the market

Looks like betting heavy against the dollar and having my base currency changed to Swiss Francs won't hurt.

[McCamy Taylor]

10. They are turning America into a third world country for the Saudis to own

[libodem]

11. This is my paranoid delusion...

That Plutocracy of Bush, and it's trillion dollar network of cronies and monopolies, will finish bankrupting the economy, destroy any social security, have all the military clout, the FBI, CIA, Homeland security, Negroponte, National guard, the police, the prisons, State governments, churches, all in a row ... then all go out and trade in for EUROS or Pounds, and then take a dump on the American People like Enron did to it's stockholders. Leaving 'us' with credit card debt and bankruptcies, we cant get out of. It will be the Rich against the Opressed...and it will be too late... we'll wish we would have had a revolution when we, could have, had a chance.