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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (25202)	1/24/2005 1:27:10 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

After 2 years of shifting, is that news bullish or bearish for the US$? I suppose one could make a case either way. At any rate, the more shifting that has been done, the less shifting there remains to come IMO. Mish

To: gregor_us who wrote (25202)	1/24/2005 4:51:31 PM
From: regli	Read Replies (2) \| Respond to of 110194

This shifting is very significant and in my opinion extremely bearish for the dollar. What I found of particular interest is the quote: “More than 90 per cent of central bank reserve managers said that the income from reserve management was "important" or "very important".” This tells me that political considerations are starting to play a bigger role even for central bankers, not surprisingly as the profits from central banks often filter into government coffers. Given how the U.S. is viewed in many of dollar holding countries and then have to sell dollar losses on reserves to the public looks to become a bigger issue. I therefore wouldn’t be surprised to see more shifts out of dollar reserves accompanied by significantly increased trade in currencies like the Euro. New political alliances will result in closer economic ties and cooperation. I soon expect an announcement of Russian crude deals with the EU in Euros perhaps followed by an EU China arms sales agreement using Euros as the settlement currency. Combined with the concerns about U.S. fiscal management, it might only take a few of these symbolic developments to cause a serious problem for the dollar as they will signal a new era in reserve management and therefore the official demise of the U.S. dollar as the single reserve currency.