U.S. Dollar Markets Left to Runs Its Natural Course

October 6, 2009 by · Leave a Comment
Filed under: Currency News 

If gold’s jump to a new high during New York is any indication, it looks if the U.S. dollar is on a downward trend at the moment.  Don’t let that lull you into complacency either.  As we see, if we have a serious downturn, investors turn to the dollar as a safe-haven bet and that makes it rise rather quickly.

I would like to see the Yuan much higher so their exports are as attractive as they have been.  I don’t believe we do enough to give protection (yes I said it) to our native producers.  We are at double-digit unemployment so encouraging job creation in non-service areas of the economy is what is needed to get the income that is needed to support a middle-class and correct our massive trade imbalance.

Dow Jones, Istanbul – Big ideas failed to gain traction at the International Monetary Fund’s annual meeting, but that was because natural processes have already paved ahead.  IMF Managing-Director Dominique Strauss-Kahn’s proposal of making the IMF a global lender of last resort was politely downsized to a research project.

And the unchanged language on currency used in the Group of Seven communique issued here over the weekend masked the fact that markets are now being left to bid the U.S. dollar down and, eventually, push up the Chinese yuan.

Finance officials from almost 200 nations gathered in Istanbul to discuss how to refashion the global financial and monetary system in the wake of a credit meltdown that triggered fears of a replay of the 1930s. But they turned out largely to be actors in a play whose script is reaching its denouement with the unsurprising revelation that Asia will be the next global locomotive.

World Bank President Robert Zoellick, who asked for more money but had to agree to raise loan prices for developing nations, summed it up: “Bretton Woods is being overhauled before our eyes,” he said in a concluding speech to the IMF’s governing board, a reference to the conference that led to the IMF’s creation.

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