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U.S. need not fear challengers to dollar, Fed official says

Scorpio

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#1
U.S. need not fear challengers to dollar, Fed official says


The United States would not necessarily lose out if other currencies emerged as alternatives to the dollar's status as the world's so-called reserve currency, a top U.S. central banker said on Tuesday.

William Dudley, president of the Federal Reserve Bank of New York, did not comment on U.S. interest rates in a speech. Rather he said Americans should not be concerned if, for the right reasons, other currencies started to eat into the dollar's 60-percent share of foreign exchange reserve holdings.

"I don't see this as a zero-sum game," Dudley, one of the most influential Fed policymakers, said in prepared remarks to a conference in Zurich that was closed to reporters.

"If other countries' currencies emerge to gain stature as reserve currencies, it is not obvious to me that the United States loses," he said, as long as it "is being driven by their progress, rather than by the U.S. doing a poorer job."

The dollar supplanted the British pound in the last century to become the world's most important reserve currency, or one that is widely held and traded globally because it is easily and safely exchanged into local currencies.

In November, the International Monetary Fund admitted China's yuan into its benchmark currency basket alongside the dollar, euro, pound sterling and yen.

"I believe that the most important goal must be to keep our own house in order," Dudley said at the conference hosted by the IMF and the Swiss National Bank. "If we do this, then I expect that the U.S. dollar will earn the right to remain the most important reserve currency in the world."

(Reporting by Jonathan Spicer; Editing by Diane Craft)

http://www.reuters.com/article/us-usa-fed-dudley-idUSKCN0Y10MG
 

the_shootist

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#2
What would you expect them to say? :belly laugh:
 

BarnacleBob

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#3
The $ in many ways mimics the recognized instant liquidity provided by AU & AG in the FOREX world of instant exchange. The $ as a reserve currency is safe & sound for as long as the $ provides the exchange liquidity. This is accomplished by & thru foreign banks holding actual physical dollars in "call" inventory & $ denominated UST's serving as the primary local bank capital & credit reserve facility...

Theres are numerous reasons that demand for UST's have not declined, on the contrary, demand for these IOU's have increased almost exponentially. This is observable and provable almost everyday, which serves as the evidence that the $ collapse bears are misrepresenting the current state of the $ in functioning global trade.... In fact, there is such a volume of rising demand into $ & $ denominated assets that the rising values have & are creating roadblocks for the centrist planners & monetary authorities alike.... Simplisticly speaking, global trade needs a weaker $ DXU, not a stronger one, which isnt being achieved due to high demand for these financial assets.... "the one world currency" so to speak.

I would be very careful betting upon a $ collapse anytime soon... When AU & AG decline in $ price, dollar holders may purchase PM's at a discount relative to other competing currencies, vis-a-vis... investors seeking to build an inventory stash of metals would seek a higher $, hence accumulating a hoard at discounted prices, while specs already positioned would seek a lower $ to create notional capital gains.

In real terms the window for "real" gains relative to PPP is a short lived lucky strategy... For as the economy rebalances the general price index to a lower $ & higher POG, the PPP index gains are highly diminished in purchasing power terms.

In my experience, the highest value of POG in purchasing power parity (PPP) relative to the $ was around $750-$800 toz., & once again on the short lived POG spike to $1900.... However, AU & AG have served their purpose in maintaining the original purchasing power while printing a notional capital gain....
 

Unca Walt

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#4
The OP triggers an old memory for its similarity:

I remember being 20 miles out on a fishing boat with the waves causing huge rolls and pitches.

The captain comes outa the wheelhouse to tell us:

"Don't worry, this boat can take it."

To which I shouted:

"THEN WHY THE HELL ARE YOU BRINGING IT UP??!!"
 

Aurumag

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#5
When the fraudulent fed tells me NOT to worry about the FRN...





It's time to worry about the FRN.
 

FunnyMoney

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#6