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Strategies & Market Trends : The coming US dollar crisis
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To: Real Man who wrote (25012)11/30/2009 7:24:47 AM
From: RockyBalboa  Read Replies (1) of 71406
 
But if the rule should hold, the balance has not been reached perhaps.
This can happen on both sides - devaluing the dollar increases the value of gold, oil and other currencies held in reserve and otoh reduces the short term funding needs.

Read: print dollars and purchase new issues until the $ value of the non-dollar reserves equates the remaining borrowing needs. It is pretty clear than once this is reached the pendulum should swing back.

I agree with your mention that the debt held by foreigners is $ denominated. But even in that case, the maturing paper needs to be repaid (and be it with then cheaper dollars), IF the foreigners do not use the dollars to buy matching amounts of new issues. Even if those transactions are only accounting entries it will change the perception.
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