Economic Edge » Decline of U.S. Dollar

Korea & Syria Diversify Away From U.S. Dollar

EconEdge — Fri, 23 Feb 2007 18:31:06 +0000

More dollar dumping —

According to The Financial Times, The Bank of Korea plans to diversify its foreign currency reserves to gain higher returns. Apparently the bank is not happy with the U.S. dollar (and who can blame them?). The Bank of Korea plans to invest part of the nation's huge international reserves ($240 billion—the world's fifth largest) in overseas stocks (notably the blue chips of advanced countries) in an effort to gain higher returns. Korea's move follows a policy switch in China which also wants to diversify its $1 trillion+ of foreign reserves (70 percent or more of China's reserves are held in dollar-denominated assets).

Kuwait May Dump the Dollar to Protect Its Economy

EconEdge — Thu, 01 Feb 2007 01:58:39 +0000

In an earlier post, I wrote about how the euro is gaining popularity as countries begin to reduce their dependence on the U.S. dollar. Last Wednesday, Kuwait announced that it may abandon the dollar, in favor of a basket of currencies, to protect its economy. This decision is being studied by Kuwait's central bank.

Could the Euro Replace the Dollar as the World's Reserve Currency?

EconEdge — Tue, 23 Jan 2007 20:40:12 +0000

The U.S. dollar remains the world's reserve currency (for now), with central banks holding 2/3rds of their reserves in dollars. But, according to recent news, the dollar's status as the world's reserve currency is changing. The dollar is being challenged by the euro, which is now five years old.

U.S. Mint Forbids Melting Pennies & Nickels

EconEdge — Mon, 18 Dec 2006 13:42:43 +0000

Pennies and nickels are now worth more melted down than at face value.

In an earlier post, I wrote about how the government is losing money by minting pennies and nickels. It now costs 1.73 cents to create a penny, and 8.34 cents to create a nickel (6.99 cents for the metal, plus the cost of production).

Inflation is NOT beneficial

EconEdge — Thu, 27 Apr 2006 04:09:45 +0000

From Puru Saxena, who produces Money Matters, a monthly economic publication that highlights investment opportunities.

Some argue that inflation is a good thing, a necessity in the modern economy as it facilitates trade. Personally, I don't buy into this concept because throughout the 19th century, we witnessed mild deflation, yet our world made huge progress over that period.

Foreign Direct Investment, Inflation & Declining Dollar

EconEdge — Fri, 21 Apr 2006 17:27:41 +0000

From "Finster", a regular contributor to the Daily Reckoning Discussion Board…

A log chart of the foreign direct investment (FDI) over the past seven years, shows in grisly detail the decline and fall of the U.S. dollar. By this measure, the U.S. dollar has lost 13.8% of its value over the past two years, with prices increasing an overall 16.0% over that time frame.

The Gold Standard Gets No Respect

EconEdge — Fri, 31 Mar 2006 03:58:24 +0000

A very good (and somewhat controversial) article by Chris Mayer. Originally published last year. Most finance/econ folks have strong views about deficit spending and the gold standard. Guess it's time to create some controversy…

Economic Indicators & U.S. Debt

EconEdge — Wed, 29 Mar 2006 20:35:57 +0000

Random economic thoughts for the day…

We are currently in a commodities bull market (driven, in a large part, by China's demand for raw materials, and the decline of the dollar). Witness the huge run-up in commodity prices over the past three years. This chart shows the increase of the Reuters CRB Commodity Index. Have a look at the sharp rise from 2003-2006.

Gold Hits 25-Year High

EconEdge — Thu, 23 Mar 2006 05:05:38 +0000

From The London Times…

Merrill Lynch predicted that gold would hit $600 an ounce in the long term after its recent rise above $500. Last month, the precious metal hit a 25-year high of $579.50 an ounce amid concern among investors that America's huge trade gap would force a weakening of the dollar. The Chancellor sold 395 tonnes of Britain's gold reserves between 1999 and 2002, generating $3.5 billion. At yesterday's London closing price of $554.10, he would have generated more than $7 billion (£4 billion)."