Tuesday, November 13, 2007

Currency Mayhem, still here...

But have the mercantilists' really won over the West? Should we all learn Mandarin and worship only to the East? Some may think so but now the rising economies are faced with massive losses on their dollar assets as it falls in value, a drop in demand from their expert markets as their growth rapidly slows and not enough domestic demand to keep themselves going if exports start to fall. On top of this the currency pegs they are trying to hold are costing them huge amounts of cash; transferred in the main to western currency speculators. Finally, with all the money having nowhere to go there are huge bubbles of their own, see the Shanghai stock market as the leading example, which are going to lose billions of dollars for unsavvy investors in the not-so-distant future.

An interesting take on the falling Dollar.

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