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Reply #99: Do you understand less world demand for the U.S. Dollar? [View All]

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Stuttgart77 Donating Member (58 posts) Send PM | Profile | Ignore Mon May-09-11 10:41 AM
Response to Reply #98
99. Do you understand less world demand for the U.S. Dollar?
http://www.nationmultimedia.com/2011/04/29/opinion/The-...

"It is unclear how Bernanke will dismount from the tiger's back by June. If he continues with the monetary inflation policy, the US dollar will continue to plunge and risk losing its world currency reserve status. If he stops writing the cheques, interest rates will certainly rise and a liquidity crunch will ensue, which would stall the US economy.

China, Russia and the other BRIC countries, as well as the oil exporting nations, are contemplating how to move away from US dollar transactions. Holding the dollar will pose a risk of further losses because of the US's continuing monetary inflation to debase the currency, and the murky prospects of the US in bringing down its budget deficits and also long-term debt to the tune of $70 trillion to $200 trillion.

On April 23, Tang Shuangning, chairman of China Everbright Group, said China should reduce its excessive foreign exchange reserves and further diversify its holdings. He suggested that the amount of foreign exchange reserves should be restricted to between $800 billion and $1.3 trillion. China's foreign exchange reserves increased by $197.4 billion in the first three months of this year to $3.04 trillion."
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