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Equities News (March 28)

2023/ 03/ 29 by jd in Global News

“The petrodollar was born” in 1975. When OPEC members exclusively adopted the dollar for pricing, it “had the immediate effect of strengthening the U.S. dollar,” with the greenback becoming “the world’s reserve currency, a status formerly enjoyed by the British pound, French franc and Dutch guilder.” Today, however, “we may be witnessing the end of the petrodollar as more and more countries, including China and Russia, are agreeing to make settlements in currencies other than the U.S. dollar. This could have wide-ranging implications on not just a macro scale but also investment portfolios.”

 

Bloomberg (October 4)

2013/ 10/ 05 by jd in Global News

“The U.S. doesn’t deserve Asia’s money, not with half of its government in financial jihad mode…. The biggest economy has long taken its reserve-currency status for granted, but the events of recent days raise Washington’s hubris to entirely new levels…. The more the U.S. plays with fire with its Aaa rating, the more Asia will find an alternative.”

 

Financial Times (September 25)

2013/ 09/ 26 by jd in Global News

“Congress needs to regain its senses before disaster hits.” Without Congressional action, the government will shut down next week and in several more begin defaulting on its sovereign debt. “As the sole superpower and provider of the international reserve currency, the US owes a duty to the world, as well as to itself, to uphold one of the most basic functions of a nation state. Flirting with a government shutdown is pantomime enough. Toying with whether the US will honour its sovereign debt obligations is pure recklessness.”

 

Wall Street Journal (April 21)

2011/ 04/ 23 by jd in Global News

The Journal argues that the Federal Reserve should act more as a global central bank. “The dollar is the world’s reserve currency…. Yet for at least a decade, and especially since late 2008, the Fed has operated as if its only concern is the U.S. domestic economy.” The result has swamped countries trying to battle inflation with huge capital inflows. Domestic repercussions will also emerge. The Fed has single-mindedly expanded the money supply to stimulate the economy. “The bill is coming due in a weak dollar, food and energy inflation, and the decline of U.S. economic credibility.”

 

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