BLINK HERE....
The dollar may plunge in 2008
IMF economists asserted that the dollar was still overvalued on Thursday - putting pay to comments made last week by outgoing IMF director, Rodrigo Rato. And amid figures showing Asian economies are ditching dollar-denominated securities, the doyen of the Yen, Eisuke Sakakibara, said the dollar would “plunge” in 2008, if US growth slowed any further.
Mr Sakakibara is Japan’s former top currency official, and according to Bloomberg, warned of a dollar firesale if economic growth forecasts for America dropped below 1 per cent. The IMF cut the US forecast to 1.9 per cent on Wednesday - down from a July estimate of 2.8 per cent.
Sakakibara, who is currently a professor at Tokyo’s Waseda University said that “Some form of intervention would be necessary to stop it, and that would require coordinated effort from all three major economies.”
Which is, of course, deeply foreboding. Sakakibara is not a lone voice either. His remarks echo comments made by Merrill Lynch. The bank’s economic research team produced a report last week on sovereign wealth funds which also predicted the demise of the dollar. Its predictions included some kind of international agreement akin to the Washington treaty that sealed the fate of the gold standard:
The Washington Gold Agreement was implemented to provide a structure to central bank gold sales. This signalled a base in the price of gold. Similarly, we believe that central banks will ultimately come to some agreement on USD sales to limit the risk that USD selling becomes a downward spiral. Until this time the USD may be subject to periodic episodes of intense pressure and face an uphill struggle when cyclical influences would normally favor it.
The latest figures from the Treasury department don’t look great either. In August, China’s ownership of U.S. government bonds fell by 2.2 percent to $400 billion, the fastest pace since April 2002. Taiwan’s slid 8.9 percent to $52 billion , the most since October 2000. But Japan dumped the most, shedding $23bn of T-bills. Mr Yen’s compatriots seem to agree with him.
But take heart! Alan’s still on side. Bloomberg also report that the former Fed chair told an exclusive audience in Seoul (the media were barred) that he felt the dollar could weather the turbulence. “His view is that the markets are clever enough not to overreact,'’ said one participant. Which makes us wonder, what Mr Greenspan now makes of this summer’s events?
THE DOLLAR IS STILL OVERVALUED
Started by
Insider
, Oct 19 2007 01:55 AM
3 replies to this topic
#2
pdx5
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- Traders-Talk User
- 9,530 posts
I want return OF my money more than return ON my money
Posted 19 October 2007 - 02:57 AM
Dollar might go to half its current value...but that will take a couple of years.
So long as Americans import hundreds of Billion dollars more than they export
every year, US dollar can go only one way------>DOWN
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule
#3
HoseB
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- Traders-Talk User
- 1,061 posts
Member
Posted 19 October 2007 - 05:51 AM
Dollar might go to half its current value...but that will take a couple of years.
So long as Americans import hundreds of Billion dollars more than they export
every year, US dollar can go only one way------>DOWN
You appear quite sanguine to the likelihood of your money losing buying power. It will be the equivalent of the Gummint going into your personal balance sheet and confiscating 1/2 of it at gun point.
Most Americans don't seem concerned about the pending $USD devaluation... even see it as "good", somehow.
For government to destroy its people's money is a big deal... A VERY BIG DEAL! I see it as about the 3rd worst thing they could possibly do... right behind murdering its people or enslaving them.
Edited by HoseB, 19 October 2007 - 05:52 AM.
40,000 headmen couldn't make me change my mind....
#4
JAP
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- Traders-Talk User
- 575 posts
Member
Posted 19 October 2007 - 08:21 AM
Dollar might go to half its current value...but that will take a couple of years.
So long as Americans import hundreds of Billion dollars more than they export
every year, US dollar can go only one way------>DOWN
You appear quite sanguine to the likelihood of your money losing buying power. It will be the equivalent of the Gummint going into your personal balance sheet and confiscating 1/2 of it at gun point.
Most Americans don't seem concerned about the pending $USD devaluation... even see it as "good", somehow.
For government to destroy its people's money is a big deal... A VERY BIG DEAL! I see it as about the 3rd worst thing they could possibly do... right behind murdering its people or enslaving them.
Amen.
