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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: orkrious who wrote (30698)4/15/2005 2:59:30 PM
From: Taikun  Read Replies (1) of 110194
 
Ork,

<but the rest of the world has plenty of excess dollars they want to get rid of.>

That is not a prudent way to run a central bank. As long as there are USD-denominated commodities and goods in a country's trade, it behooves that country to hold USD. If you reallocate to Zloty, for example because you think Zloty are safer but instead the Zloty crashes and USD goes up because say Buffett covers his short, then your country can't buy energy, food, weapons and anything else denominated in USD.

This week the WSJ had an article on S. Korea and how they will maintain their USD allocation. ie no reduction.

I don't see it.

D
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