Tuesday, March 24, 2009

Re: China to Abandon the Dollar?

Why the US dollar is still resilient

The Economic Times - India — Trillion-dollar bailouts, trillion-dollar deficits, and the largest spending bill in US history. No matter how dire the news out of the US, the dollar strengthens. It has carried on rising in spite of new bailouts for two leading financial institutions — Citigroup and AIG — a catastrophic fall in US gross domestic product and more dreadful news about the US housing market. The dollar has risen 10% against the euro so far this year, and by 7.4% against the yen.
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China challenges power of the dollar as it flexes its economic muscles

Times Online UK — China yesterday threw down a challenge to America’s 50-year dominance of the global economy as it proposed replacing the dollar as the world’s main reserve currency with a new global system under the control of the International Monetary Fund.
In a muscle-flexing move that will be seen as an attempt to exploit the big shifts in economic power created by the recession sweeping the West, Beijing said that the dollar’s role could eventually be taken over by the IMF’s so-called Special Drawing Right (SDR), a quasi-currency that was created in 1969.
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Dollar falls on U.S. toxic asset plan and home sales data

Xinhua — The dollar fell against most major currencies on Monday after U.S. government unveiled a toxic asset rescue plan and a latest report showed U.S. existing home sales jumped in February.
The Obama administration on Monday announced a program aimed at cleansing toxic assets from bank balance sheets that have frozen up lending and fueled the recession.
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