Chronicles Of Depression 2.0: #041

Authorities lose patience with collapsing dollar

Jean-Claude Juncker, the EU’s ‘Mr Euro’, has given the clearest warning to date that the world authorities may take action to halt the collapse of the dollar and undercut commodity speculation by hedge funds.

Momentum traders have blithely ignored last week’s accord by the G7 powers, which described “sharp fluctuations in major currencies” as a threat to economic and financial stability. The euro has surged to fresh records this week, touching $1.5982 against the dollar and £0.8098 against sterling yesterday.

“I don’t have the impression that financial markets and other actors have correctly and entirely understood the message of the G7 meeting,” he said.

Mr Juncker, who doubles as Luxembourg premier and chair of eurozone financiers, told the Luxembourg press that he had been invited to the White House last week just before the G7 at the urgent request of President George Bush. The two leaders discussed the dangers of rising “protectionism” in Europe. Mr Juncker warned that matters could get out of hand unless America took steps to halt the slide in the dollar.

Emphasis added by me.

That frenetic moron in the White House has less than year left to still ruin this nation — and it looks like he’s intent on doing so!

David Woo, currency chief at Barclays Capital, said the Europeans and Americans are talking past each other. Whatever the G7 wording, Washington is happy to watch the dollar slide. “They are not going to worry unless there is a knock-on effect on US equity or bond prices. So far that hasn’t happened. There are no signs that the dollar decline has turned disorderly,” he said.

European industry has managed to live with the high euro so far, but the damage of major currency shifts can take years to surface. “The moment will come where the exchange rate level will start to cause serious harm to the European economy,” said Mr Juncker.

Emphasis added by me.

George Soros, the hedge fund baron who “broke” Europe’s exchange system in the early 1990s, said yesterday that the euro could never anchor of the global system. “I don’t think the euro can replace the dollar as the main world currency. The euro is not a truly attractive alternative,” he said.

Emphasis added by me.

Screeeeeech. That’s me hitting the brakes with a huge WTF?!

Has Soros developed Alzheimer’s? Or has one of the best writers coverage our impending financial meltdown made an error here?

Into the WABAC Machine, Sherman!

They’re Singing, Bye Bye Miss American Pie … – posted on January 24, 2008 at 6:22 pm

George Soros, the financier who made a fortune betting against the pound, went so far Wednesday as to say that the downturn would put an end to the long status of the dollar as the world’s default currency.

Emphasis added by me.

And:

Chronicles Of Depression 2.0: #025
– posted on April 11, 2008 at 3:41 pm

[Soros] envisions a time, not so distant, when the dollar is no longer the world’s main currency and people will have a harder time borrowing money.

Emphasis added by me.

So, which of these statements is the real George Soros?

Here is the shadow of doom:

A key reason for the 30pc rise in the euro agasint the dollar over the last two years has been the move by Asia central banks and Mid-East wealth funds to parking huge sums of newly acquired wealth in European bonds as an alternative to the dollar.

BNP Paribas said Asian surplus countries and commodity exporters have accumulated $1,160bn in reserves over the last year alone. US Treasury data shows that only 19pc of this was invested in dollar assets. This is a sharp break with past practice. A large chunk of the money was invested in euro-zone securities. The question is whether China, Saudi Arabia, and others, have now reached euro saturation.

Emphasis added by me.

One point one six zero trillion dollars in reserves. “Reserves” is a fancy word for free-and-clear money.

Those dollars are our tanks of gas and technology purchases.

Explore posts in the same categories: C.O.A.T. - Money, Depression 2.0

One Comment on “Chronicles Of Depression 2.0: #041”

  1. SKFK Says:

    I don’t think Soros is contradicting himself. I think what he means is that Euro may end up as the global currency by default, but it may lead to other problems. On your April 11th quote, he’s basically saying that it would become more difficult to borrow money under Euro as the dominant currency. Basically a difference between “what will happen” and “what should happen.”


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