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Dollar loses reserve status to yen & euro
Ben Bernanke's dollar crisis went into a wider mode yesterday as the greenback was shockingly upstaged by the euro and yen, both of which can lay claim to the world title as the currency favored by central banks as their reserve currency.
Over the last three months, banks put 63 percent of their new cash into euros and yen -- not the greenbacks -- a nearly complete reversal of the dollar's onetime dominance for reserves, according to Barclays Capital. The dollar's share of new cash in the central banks was down to 37 percent -- compared with two-thirds a decade ago.
Fed boss Ben Bernanke may be forced to raise rates in order to restore faith in the dollar — and help bring the euro and the yen back to earth.
Currently, dollars account for about 62 percent of the currency reserve at central banks -- the lowest on record, said the International Monetary Fund.
Bernanke could go down in economic history as the man who killed the greenback on the operating table.
After printing up trillions of new dollars and new bonds to stimulate the US economy, the Federal Reserve chief is now boxed into a corner battling two separate monsters that could devour the economy -- ravenous inflation on one hand, and a perilous recession on the other.
"He's in a crisis worse than the meltdown ever was," said Peter Schiff, president of Euro Pacific Capital. "I fear that he could be the Fed chairman who brought down the whole thing."
I think you summed it up pretty well -- they're going to say whatever they can say to deflect the issue away from those really to blame.It's Bush fault. Obama inherited the death of the dollar. Tax cuts killed the dollar. Greedy CEO's killed the dollar. Walmart killed the dollar.
So now what are the libs going to say?
Keep watering down that dollar. :shock:
Currency collapse coming soon and of course the chaos, destruction, anarchy, death and possibly civil war 2 right behind it.
Or everyone could just stop paying all taxes and have national non compliance day. Once the gears stop it's hard for the machine to work.
But hey, at least all that Monopoly money printed for the stimulus kept unemployment below 8%.
The government still has its jackboots called Police.
Uhh how in the **** hell are you blaming Obama for THIS? The dollar has been declining for years.
God, some people will use ANYTHING as an excuse to be a partisan hack... :roll:
Uhh how in the **** hell are you blaming Obama for THIS? The dollar has been declining for years.
God, some people will use ANYTHING as an excuse to be a partisan hack... :roll:
Fed Plans to Inject Another $1 Trillion to Aid the Economy
By EDMUND L. ANDREWS
Published: March 18, 2009
WASHINGTON — The Federal Reserve sharply stepped up its efforts to bolster the economy on Wednesday, announcing that it would pump an extra $1 trillion into the financial system by purchasing Treasury bonds and mortgage securities.
Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air. But the moves on Wednesday were its biggest yet, almost doubling all of the Fed’s measures in the last year.
The action makes the Fed a buyer of long-term government bonds rather than the short-term debt that it typically buys and sells to help control the money supply.
The idea was to encourage more economic activity by lowering interest rates, including those on home loans, and to help the financial system as it struggles under the crushing weight of bad loans and poor investments.
Investors responded with surprise and enthusiasm. The Dow Jones industrial average, which had been down about 50 points just before the announcement, jumped immediately and ended the day up almost 91 points at 7,486.58. Yields on long-term Treasury bonds dropped markedly, and analysts predicted that interest rates on fixed-rate mortgages would soon drop below 5 percent.
But there were also clear indications that the Fed was taking risks that could dilute the value of the dollar and set the stage for future inflation. Gold prices rose $26.60 an ounce, hitting $942, a sign of declining confidence in the dollar. The dollar, which had been losing value in recent weeks to the euro and the yen, dropped sharply again on Wednesday.
In its announcement, the central bank said that the United States remained in a severe recession and listed its continuing woes, from job losses and lost housing wealth to falling exports as a result of the worldwide economic slowdown.
The dollar was already caving when Obama took office.
Of course it's all Bush's fault. :roll:
I have a strong feeling that if we do manage to audit the fed that the information it reveals will finish the job.
Correction. The dollar was deliberately weakened under the past administration to boost exports. Notice not a single person blaming Obama for this has mentioned that.
What is interesting is that the dollar's value is highly artificial. Without the use of dollars as a reserve and as petrocurrency, the dollar's value would be significantly lower. For those here who have come out against artificial constructs in the market, they sure don't seem to have a problem with the artificial constructs keeping the dollar where it is. But people are walking contradictions. I see many of them here. Hypocrisy is likely the most abundant resource on the planet.
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