Ever Wonder How Money Was Created? (If you guessed the Fed or the Mint, you're wrong)
World Abandoning US Dollar as Standard for International Trade
Excerpt:
The foreign exchange markets are not solely about exchange rates. They are about values, smooth flowing of international trade, about trust and reliability. The sight of the $ falling over a long period of time, with bounces and recoveries that don't change the downward trend is far more than simply a drop in value!The $ is steadily weakening, but more than a drop in the $' international value is happening here. The loss of confidence is in the $ is accelerating each time it slips one or more percent on a persistent basis, with small short recoveries being seen in the midst of this decline. How important is this loss of confidence? Critical for it precedes policies, which long-term will lessen the role of the $ to one of the world's top 5 currencies.Growing surplus holders don't want to dump the $ for fear of losing value in the remaining ones in their portfolio, but don't think that a dumping of the $ is what it will take to remove it from the position of principal global currency. All realize that it is the knowledge of the declining value of the $ that will bring on a major toppling of that currency. So it is a choice of a steady ‘controlled' fall or a steep decline to disaster. To get perspective on the global scene what is the thinking out there?
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How China Could Crash The US Dollar on a Whim
Excerpt:
China has several economic “weapons” at its disposal for countering the US, ranging from the manipulation of its currency to the diversification of its burgeoning stock of forex reserves. It also has several less blunt options to choose from, such as enabling Chinese companies to compete more directly and effectively with US companies, and opposing the US in securing a domestic energy supply. On all of these fronts, the US is essentially being held hostage, since it has become so dependent on China as the world’s factory. Ultimately, it seems unlikely that China will deliberately butt heads with the US unless it is first provoked, but America should nonetheless be on its guard, since its economy hangs in the balance.
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US Heads for Recession as Foreign Investors Rush for the Exit from US Dollar Holdings
Excerpt:
The days of the dollar as the world's “reserve currency” may be drawing to a close. In August, foreign central banks and governments dumped a whopping 3.8% of their holdings of US debt. Rising unemployment and the ongoing housing slump have triggered fears of a recession sending wary foreign investors running for the exits. China, Japan and Taiwan have been leading the sell off which has caused the steepest decline since 1992.
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US Dollar Vulnerable to Interest Rate Cut, China Dumping US Bonds
Excerpt:
Speculators, investors, and central bankers have figured out that the US government and the Bernanke Fed will not protect the dollar - not when millions of Americans are having trouble making their mortgage payments. The US money supply is increasing - nearly five times faster than GDP growth. And now, fearing a Japan-style deflation, the Fed is likely to cut rates later this month.The Chinese have one of the largest dollar piles in the world.“Is China quietly dumping US Treasuries?” asks Ambrose Evans-Pritchard in the English press.“A sharp drop in foreign holdings of US Treasury bonds over the last five weeks has raised concerns that China is quietly withdrawing its funds from the United States, leaving the dollar increasingly vulnerable.”
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