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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: ggersh who wrote (1610)	10/18/2007 6:42:54 PM
From: Real Man	Respond to of 71455

They have a peg in place from the old days of emerging markets currency crises of the 90-s, so it's automatic. The peg sets the value of their currency at a constant ratio to the dollar, kind of like the currencies of the Euro countries right before Euro. Some are abandoning it, now that the dollar is tanking and the peg results in a lot of imported inflation: it's Central bank buying, and to purchase reserves, they print their own currency. High reserves makes them confident they will have the ability to fight a currency crisis in their country. It's kind of late in the game, and I think quite a few realize what's going on and try to de-peg or diversify their reserves and let their currencies appreciate against the dollar.