> Doug said:
>
> Yup. Front page above the fold story on the US$ in today's FT. Even
> the central banks seem to be diversifying out of greenbacks.
Doug, I didn't see the FT story, but I'm guessing FT is spinning the dollar's decline on Iraqi war jitters. All one has to do is look at the fundamental financial charts to find out what is really going on. Of course the war prospects are playing a role, but a secondary one at that.
As far as the central banks, exactly what could they possibly be diversifying in to? Every financial instrument is dropping like a stone except for commodities. Further, the CB's dumped a major portion of their gold reserves over the last 10 year or so by leasing their bullion to bullion banks who sold it for a profit and now can't pay it back at today's current AU prices. So, the CB's are going to find it hard to diversify into AU or AG, especially as prices continue to move up.
Is Alan et al going to just keep the presses turned up full speed while Bushie throws a tax cut trinket our way? Got any ideas how we get out of this mess, or is the average worker (with their wealth in US$ at highly leveraged banks, or in highly leveraged homes, or dying equities) being setup to take the fall again?
Steven