Friday, April 24, 2009

ROFL MAO






It has been widely publicized that China wants to dump the dollar.  

While foreign exchange is unlikely to be the subject of bold public
pronouncements when the world's most powerful finance ministers
and central bankers meet Friday in Washington, China's call for
the replacement of the U.S. dollar as the world's leading reserve
currency is likely to be a hot topic behind closed doors,
currency strategists said.

Namely, foreign-exchange traders will be looking for any clues to discussions with Chinese officials as policy makers around the world attempt to piece together the implications of remarks by China central bank governor Zhou Xiauchuan in March for the eventual replacement of the U.S. dollar as the world's main currency with special drawing rights, the quasi-currency issued by the International Monetary fund.
The implication of such a policy would be a weaker dollar, as central banks move to diversify away from the world's largest reserve currency. And that's something that makes a number of policy makers, including officials from the 16-nation euro zone, nervous, analysts said.
The prospect of a substantially weaker dollar is unwelcome to policy makers in the euro zone, Japan or other countries worried about their own exports.

The main thrust of China's message is that it wants to diversify holdings of foreign exchange reserves in a way that more closely mimics the make-up of SDRs, said Simon Derrick, currency strategist at Bank of New York Mellon (Read the Rest).
They are concerned with our spending and the bailouts so they have doubled their Gold. They have good reason to worry they are having problems of their own their bubble will burst and Painfully...

chinesemilitary_tbi.jpgOne more bubble, please. 

After the bubbles in technology, housing, and commodities, we saw the mother of all bubbles: the one in global liquidity. The world economy seemed to require bubbles for its continued functioning.

I get the distinct feeling that investors’ prayers are now being answered: There's a new bubble now - or an old one is being re-inflated, depending on your perspective even as I type this. I’d like to call it the Troubled China Revival Program (TCRP).

The FAUX Stress Reports are causing concern...
"I'm worried about the overreaction — people selling every bank short and pulling out all their deposits and hiding their money in the mattress," said Scott Talbott, a lobbyist with the Financial Services Roundtable, which represents the biggest financial firms.
The main thrust of China's message is that it wants to diversify holdings of foreign exchange reserves in a way that more closely mimics the make-up of SDRs, said Simon Derrick, currency strategist at Bank of New York Mellon.
That means going from reserve holdings that stand at more than 60% dollars to around 44%. For the euro, holdings would rise to around 34% from 31%.
"You've got to read between the lines all the time," said Stephen Gallo, head of market analysis at Schneider Foreign Exchange. Over the long run, euro-zone officials are going to be more worried about the prospect of a higher euro rather than a weaker euro, he said.
"All these policy makers are worried about a snap back (to lower levels) by the dollar" as the United States ramps up borrowing, said Gallo.
Ah yes the Dollar it weakened the Treasuries fell not looking too good for the next sale they are having of $150 Billion coming up is it? Some are under the mistaken impression that Regional Banks are safe. Remember the tipping points like Social Security and lower tax collections?
I can see why they do not want to tell the public about it until May 4th and the stress tests being Asinine and with the Economy said to be in intensive care and China wanting to discuss it at the upcoming G7 well I am going to do just that with some of my money (not the mattress) but a secure location which I no longer see as the the banks with all the Theft by TARP and our Economy teetering on the edge of disaster.  I'll buy supplies and pull a China with some more Gold too I think.
Lori










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