US Dollar Demise Continued - Central Banks, World Leaders to Dump the Dollar

by the Left Coast Rebel

This will be short but I caught something late via Memeorandum. Hating to leave the blogosphere for the evening with this, but knowing that I must pontificate; I am turning to a Bloomberg article that points to the fact that central banks around the world, flush with reserves, are actually turning away dollars and opting to boost holdings in euros and yens.

And sorry if that sounds complicated or convoluted, but in all basic sense, it's bad news for the US economy and you/me in particular. From Bloomberg -

Policy makers boosted foreign currency holdings by $413 billion last quarter, the most since at least 2003, to $7.3 trillion, according to data compiled by Bloomberg. Nations reporting currency breakdowns put 63 percent of the new cash into euros and yen in April, May and June, the latest Barclays Capital data show. That’s the highest percentage in any quarter with more than an $80 billion increase.
America’s currency has been under siege as the Treasury sells a record amount of debt to finance a budget deficit that totaled $1.4 trillion in fiscal 2009 ended Sept. 30.

And as our economy burns and our used-car salesmen pontificate, foreigners are shunning the dollar, turning to currencies of value and regime of trust. A horrible turn of events for the USA and something that I surely would never had expected in my lifetime to see.

But then again, we are the Obamanation.

UPDATE: I started this morning with a fresh mug of java and perused the Investor's Business Daily site. Speaking of coffee, again I saw gold and commodities reaching to new highs. Again as well I am reading over at Bloomberg another dollar demise story. The key reason for the dollar-decline? Keynesian economics from the WH. From Bloomberg this morning -

President Barack Obama's effort to lead the world economic recovery by spending the U.S. out of its recession is undermining the dollar, triggering record commodities rallies as investors scour the globe for hard assets.
“Gold serves as a hedge against inflation, and even though we are in the midst of a recession worldwide, the sniff of inflation is already in the air,” said Richard O'Brien, chief executive officer of Newmont Mining Corp., the largest U.S. gold producer, on Oct. 2.

The rebalancing of global wealth away from the U.S. as reflected in the dollar is likely to take years if not decades, said Carmen Reinhart, a University of Maryland economist who co- wrote a 2009 book with former IMF chief economist Kenneth Rogoff on the history of financial crises.

Read more at Bloomberg and I will update this story throughout the day.

Via. Memeorandum