Asian banks dump dollar

[Dover]

Asian banks dump dollar

"Asian central banks are quietly moving away from holding the US dollar in their foreign exchange reserves, suggesting further weakness in the value of the greenback this year.

A new analysis by Lehman Brothers estimates that in the last half of last year as much as $133 billion of foreign exchange reserves in non-Japan Asia left the dollar for stronger, higher-yielding currencies such as the euro, pound and Australian dollar.

The research compared US Treasury statistics on foreign holders of its debt with Asian central banks' statistics on reserve holdings.

'The dollar's now sharing its reserve currency status a little - perhaps not a bad thing,' says John Llewellyn, chief economist at Lehmans...>>

http://observer.guardian.co.uk/business/story/0,6903,1153155,00.html

[ayeshahaqqiqa]

1. Funny

as I understand it, the thing that keeps the dollar afloat is demand for the dollar. As long as other countries pay in dollars, we fund our debts with bucks and are beholden to no one. But when the Euro, Australian dollar, or yen takes over, this will all change, probably leading to hyperinflation and then deflation. Trouble is this will happen on the Dem's watch, even though it is Bush who will have caused it, unless the next Pres is very strong and works to strengthen the dollar again via strict spending limits.

[Nicholas D Wolfwood]

2. We're all in deep **** if that happens

And being Dem or Repug won't matter because it'll suck for all Americans.

[ramapo]

3. Japan has been buying

The BOJ has been very busy propping up the dollar.

[Art_from_Ark]

5. And Japan has nearly a trillion dollars worth of yen in its war chest

So even if other Asian central banks dump, the effect will be offset by buying by the Japanese government.

Cheap dollars, paying 4% interest.

[Art_from_Ark]

6. By the way, the dollar is now up to 108.65 yen

in today's Tokyo trading. Someone is buying dollars.

[kalian]

4. Well...oil will be traded for Euros...

and then the US will be in real big trouble...