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Dollar Reaches Breaking Point as Banks Shift Reserves
Ye Xie and Anchalee Worrachate
Bloomberg
Monday, Oct 12th, 2009
Central banks flush with record reserves are increasingly snubbing dollars in favor of euros and yen, further pressuring the greenback after its biggest two- quarter rout in almost two decades.
Policy makers boosted foreign currency holdings by $413 billion last quarter, the most since at least 2003, to $7.3 trillion, according to data compiled by Bloomberg. Nations reporting currency breakdowns put 63 percent of the new cash into euros and yen in April, May and June, the latest Barclays Capital data show. That’s the highest percentage in any quarter with more than an $80 billion increase.
World leaders are acting on threats to dump the dollar while the Obama administration shows a willingness to tolerate a weaker currency in an effort to boost exports and the economy as long as it doesn’t drive away the nation’s creditors. The diversification signals that the currency won’t rebound anytime soon after losing 10.3 percent on a trade-weighted basis the past six months, the biggest drop since 1991.
“Global central banks are getting more serious about diversification, whereas in the past they used to just talk about it,” said Steven Englander, a former Federal Reserve researcher who is now the chief U.S. currency strategist at Barclays in New York. “It looks like they are really backing away from the dollar.”
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35 Responses to “Dollar Reaches Breaking Point as Banks Shift Reserves”
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October 12th, 2009 at 5:21 am
Are we ready?
Anderson Baldwin Carter Choate
Clemente Gonzalez Gravel Grayson
Kaptur Kucinich McKinney Nader
Paul Perot Sheehan Ventura
chris killz blog Reply:
October 12th, 2009 at 6:35 am
Get your gold while you still can.
If you don’t have money for gold, get ready to become a prospector. It’ll be hella worth it when golds 3 or 4k. If we make it that long.
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Patrick Seamus Reply:
October 12th, 2009 at 8:39 pm
Silver is the better bargain right now and is also more readily spendable. Get a good supply of both. Silver is your checking account, gold is savings.
Shotgun shells and Jack Daniels couldn’t hurt either.
danny2 Reply:
October 12th, 2009 at 10:12 am
nobady is going to do anything unfortunately this is the way it is, hunker down and get your stuff ready.
Jim Shores Reply:
October 12th, 2009 at 3:56 pm
So the FED and the NWO just killed our financial future and want a promotion to lead the world because they are so smart. Can anyone think of anything they have done right since 1913? Can anyone list anything our “government” has done right in this century? They are either very stupid or very corrupt. Maybe both. We have had a major financial catastrophe every 7-8 years since they stole our government or bought it from the traitors we elected. The only growth industry I see is in building gallows for criminals that use government guns to steal all we earned by hard work. JD Wells of KLIF is an example of a NWO shill; he actually is anti-golld and pro FED and calls himself a conservative. He is pure con. So is that little wimp Jeff Bolton and the obnoxious fraud Ed Wallace. The “star” of KLIF is Glenn(BECKY)Beck. Who are their advertisers? Are the advertisers awake or just stupid?
lowervolts Reply:
October 13th, 2009 at 1:14 am
Stand way back +10! Word on the street is Benny @ the Fed Reserve & Timmy Boy @ treasury have lost all control & things are going to blow just after the 1st of November!
October 12th, 2009 at 5:31 am
Compared to gold all fiat papers are going down, not?…
October 12th, 2009 at 5:37 am
http://www.KeepTheTruthAlive.com
October 12th, 2009 at 6:28 am
Here are the numbers, Fed Reserve Debt Creation and US National Debt, running up faster then an out of control slot machine in Vegas. Debt currently being left to our kids by the banker traitor SCUM and our banker C sucking politicians
http://www.usdebtclock.org/
October 12th, 2009 at 6:31 am
http://www.youtube.com/watch?v.....re=channel
October 12th, 2009 at 7:50 am
….and yet the moron Cramer is predicting a dollar rally. I ask “How?”
Jim Shores Reply:
October 12th, 2009 at 4:04 pm
What, Cramer is a financial adviser, does Seinfeld invest with him?
October 12th, 2009 at 8:04 am
Folks, looking at the markets around the world, I believe we are DAYS AWAY from an absolute collapse of the dollar and when it happens, you can expect that you will NO LONGER be able to buy ANYTHING with your Dollars, no food, fuel, rent or anything that is exchanged in Americas former currency…….THE DOLLAR.
They will wait for people to move to the streets and the killing starts before they declare Martial Law in America. Then, when things get really ugly, they will integrate the Amero into the system and will charge you $10.00 for one Amero and they will make you believe you are getting a good deal since the Dollar has been devalued to NOTHING.
This has all been planned for much longer than you or I have been alive. Gold, Silver and a system of Barter will be the only way we will be able to make it when this happens.
Good Luck People!
October 12th, 2009 at 8:16 am
I believe that people need to be educated as to what the fractional reserve banking system is and how central banks operate. I was thinking that there is no real good way to make this very widely know. Many people give lip service to “ending the Fed,” but I wonder how many actually know how money is created and why it is unsustainable. Unless it is widely known and understood, the next monetary system will probably be a lot like the one that just failed. (And failure is how the wealth is tranfered, really. So it’s not really a big failure to those who established the system…)
Anyway, it occured to me that some kind of a letter could be written to inform and educate principles and faculty at private high schools. I think they still teach students how to do math in the private schools, don’t they? I tried to teach it briefly in a public school and I couldn’t believe what I saw. They truly are f’ing up the schools on purpose. Anyway, in the letter, it could be suggested to watch Paul Grignon’s “Money as Debt.” Google Video search it. It could also be suggested as a project for the students to create an imaginary system that would work and be fair to all. It would be a great exercise and a great learning experience.
The foundation of our monetary system is fatally flawed. It is unfairly designed to transfer wealth. People need to understand how it works so that we know what questions to ask and what to gaurd against in the future. It is not enough to root for the Fed’s demise. We must be prepared to recognize the difference between a good system and a bad one.
Public school’s might get on board too as they still have local control. Why don’t we educate the educators? Educate cops, military, and educators. You wake young people up and then you’ll really have an army. But, for Christ’s sake, try to sell awakening as something good. Too many of you are failing at getting the message out because it’s all doom and gloom. Maybe we could focus on how great the world will be when everybody learns some critical stuff. And the money thing is the biggest. Six billion people depend on it. It is by far the most important issue facing the world.
Andrew Reply:
October 12th, 2009 at 3:02 pm
Money as Debt is a good video, but keep in mind that if the interest earned from their “credit” equals the amounts lost from bankruptcies, the system could theoretically work. I still think it sucks because even if the central bankers did it well (which they don’t), it gives them too much power and the ability to pay people too much for stuff that really doesn’t help society or is productive (which leads to higher prices).
Richard Todia Reply:
October 12th, 2009 at 5:20 pm
I believe you just said that if enough people go bankrupt, and don’t pay back their debts to the banks, then the system could work. Is that what you said? Or do you mean, if enough banks go bankrupt, and some agency (FDIC) steps in…? Its’ a real stretch to say such failures would constitute the system “working.” What happens to the money supply when so many people have gone bankrupt that they can’t borrow anymore (which is kind of what’s going on today)? Answer: The money supply shrinks and more and more foreclosures and bankruptcies are certain. The system is like a kind of game of musical chairs that requires exponential growth in order for everybody to have a chair (i.e. be able to pay their bills). As populations slow their growth (or shrink), such economic growth is virtually impossible.
Seriously, failure is built into the system. You could have the smartest, most ethical people in the world running it and failures and the transfer of real wealth would still happen. To say that, if we have enough failures, then the system could theoretically work is just ludicrous. Failure is what transfers the wealth. That is the mechanism.
Furthermore, it is just plain dangerous to be dependent on a money supply that is 95% phantom money. Societies (the civilized world) should not be subject to a money that might or might not be in existence tomorrow. When the supply shrinks substantially, we all just look at each other like we are stupid. We don’t know what to do or how to trade without money. We are forced to borrow in order to survive . The accumulation of real capital is the fortune of only a few. Economies slow and virtually die because we are so stuck in this paradigm.
Top – down, bottom – up, side – to – side, every which way, the system is the just plain stupid. How can you not see that? Maybe we really are headed for disaster.
Richard Todia Reply:
October 12th, 2009 at 5:22 pm
Everybody wants a revolution, but nobody will know what to do when that happens. “Meet the new boss. He’s the same as the old boss.” (The Who)
October 12th, 2009 at 8:18 am
Aren’t these the same global banks that we bailed out?
October 12th, 2009 at 8:21 am
Keeping the dollar low for export? The only things the US has to export is weapons, lies and desolation.
October 12th, 2009 at 9:32 am
LaRouche Demands Bankruptcy Reorganization Now
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July 28, 2009 (LPAC)‑‑Political economist and statesman Lyndon LaRouche today called for the immediate bankruptcy reorganization of the entire Federal Reserve System, before the dollar‑based global financial system crashes. LaRouche warned last week that, by no later than the end of the current fiscal year, or weeks earlier, even as early as sometimes during August, the system will crash, probably weeks before the year‑end data is released. In fact, the present world economy is already hopelessly bankrupt for as long as the U.S.A. and world systems remain dominated by monetarist systems.
“Although we can say, contrary to all wishful thinking, that the system is doomed, by no later than October 15, and therefore, immediate action is required weeks, even two months before October 12th of this present year,” LaRouche explained. “We must cancel the $24 trillion bailout immediately during the weeks just ahead, and put the system through an orderly bankruptcy reorganization, as specified under our Federal Constitution. The entire Federal Reserve System must be put into receivership. There is no way that the Fed can honor those intrinsically fraudulent bail-out efforts underlying the still cancerous growth of current nominal financial obligations. Reducing the obligations of legitimate national and state chartered banks to the magnitude of Glass-Steagall standards, either will be done, through bankruptcy reorganization now, or the United States itself will soon cease to exist. Without such a proceeding in bankruptcy as I specified during the period from July 27, 2007 into that September, there is presently no hope for the continued existence of the U.S.A. or any among the nations of Europe, in their present forms.”
LaRouche elaborated, “Right now, the overwhelming majority of states are bankrupt‑‑perhaps as many as 46 or 48 states. Very soon, we are going to have people dying in the streets in various states, if the current Obama‑controlled policies are allowed to go on, past the end of this month. We must put the entire Federal Reserve System through bankruptcy reorganization, return to Glass‑Steagall standards. Protect the necessary commercial banking functions, let the speculators go broke. The very survival of the United States, in the short‑term, is on the table. Right now, 30 percent of our people are unemployed. In 38 states, there are no funds to provide for unemployment insurance. People are going to be dying, in the immediate days and weeks ahead, if we do not get a dramatic change in policy out of the White House.
“President Obama is breaking down, his policies are collapsing‑‑like his so‑called health care reforms, which are nothing more than a mirror image of Hitler’s 1939 euthanasia policies. We must have the institutions of government assert reality, take charge of a collapsing Presidency, or the country‑‑the whole world‑‑will soon plunge into a New Dark Age. The conditions for such a New Dark Age already exist. Therefore, we must act now, before it happens.”
LaRouche explained, “The bailout of Wall Street and London was ill‑conceived from the beginning. If we don’t reverse that policy, cancel the bailout, right now, we will be responsible for the destruction of the United States. We had a chance to act in the Summer and Autumn of 2007 when I first proposed my Homeowners and Banks Protection Act (HBPA), but no action was taken at that time. Now, $24 trillion in bailout money later, the entire system is about to blow, when the end‑of‑the‑year figures are made public.
“The root causes of this looming catastrophe,” LaRouche concluded, “date back much earlier. They are the result of the cultural and other so‑called reforms of 1968, which brought us to this point. It is not too late to act, but we now have days and weeks, not months. If the needed changes have not been enacted before Labor Day 2009, all hell will break loose. So let those in the governing institutions of this country come to their senses. Take the only action that can save this country and the world from disaster. Put the entire Federal Reserve System through bankruptcy reorganization. Protect those commercial banking functions that are vital to our economy. Launch a massive investment in job‑creating high‑technology infrastructure: nuclear power, high‑speed rail and maglev, water management. Rebuild our healthcare infrastructure. Do this through the creation of a National Bank, through the establishment of our Constitutionally‑mandated system of national credit, legislated by the U.S. Congress and signed into law by the President of the United States. The Federal government must issue longterm credits, at 1‑2 percent interest, for these vital infrastructure projects, creating tens of millions of new productive jobs. All of this can be done, under our Federal Constitution, by act of Congress, and by the stroke of the President’s pen. When the very survival of the United States is at stake, there is no excuse for inaction or delay.”
Richard Todia Reply:
October 12th, 2009 at 6:21 pm
I’ve seen LaRouche’s stuff. It’s difficult to understand. He creates his own terms. But, declaring bankruptcy sound’s Ok for these emergency times. At least he has a plan. I need to examine it more. But, why the need for borrowed money to do the infrastructure projects? Why does the government need to borrow money at interest when it can more easily create it’s own?
In the end, after all of this all shakes out, we should develop a system in which it is illegal to lend something that doesn’t exist. Yes, that would mean the end of banking as we know it. But it would be the only way we could have a really dependable and stable money supply. Necessity and math could determine if and when and how much money needs to be created and spent into the system. It could and should be transparant and governed by simple laws. It would be hard money. It would be fair to all.
Richard Todia Reply:
October 12th, 2009 at 6:26 pm
Sorry. I read that wrong. Government would “issue long term credits.” That’s not that bad. A national bank is OK. I have no problem with that.
October 12th, 2009 at 9:35 am
Sorry about the dbl post but the above and more @www.larouchepac.com
October 12th, 2009 at 11:05 am
I say we implement a new currency – and then tell China; “Sorry, you gambled and lost!
October 12th, 2009 at 12:14 pm
I want to let everyone know that I am gay. I keep SPAMMING all of alex jones websites everyday because I have no life. Will you be gay with me? If so visit my poor beat up gay blog.
October 12th, 2009 at 12:14 pm
well just do it or dont crash the dollar …then maybe the govt and banksters can finally get what they deserve…an ass whooping, and hopefully a bullet behind the ear. and a smile on my face as i see it happening on the news. fuckers all of them.
October 12th, 2009 at 12:49 pm
Here we go with Global central banks and their global control grid. All part of the tyrannical NWO plan. Soon as it is in full swing, there goes the dollar. Maybe you will get a “penny’s” worth on the dollar. Save your change, at least it is made of metal.
October 12th, 2009 at 4:07 pm
What, Cramer is a financial advisor, does Seinfeld invest with him?
October 12th, 2009 at 6:10 pm
They’ll probably make gold illiegal to own.
October 12th, 2009 at 6:52 pm
it cost the fed $35,000.00 TO PRINT A MILLION DOLLARS thats $0.28571428571428571428571428571429 cents a bill (26 cents) and if they devalue it 95%, it will end up like Germany (Wamier Republic) and have to print on only one side to save momey and ink!!!. by that time they will let you print it at home!!!(the paper would cost more than the money is worth!!)
,,,.
October 12th, 2009 at 6:53 pm
it cost the fed $35,000.00 TO PRINT A MILLION DOLLARS thats $0.28571428571428571428571428571429 cents a bill (29 cents) and if they devalue it 95%, it will end up like Germany (Wamier Republic) and have to print on only one side to save momey and ink!!!. by that time they will let you print it at home!!!(the paper would cost more than the money is worth!!) :*,,,.
October 12th, 2009 at 9:50 pm
I hate when people refer to the dollar as the “greenback”. The dollar is NOT a greenback, A Greenback was money created and supplied to the public by Lincoln in response to the international bankers. It was not a fiat/debt instrument, like the dollar. A greenback dollar reads” UNITED STATES NOTE” and belonged to the U.S. Today’s dollar reads ” FEDERAL RESERVE NOTE” and belongs to the privately owned Federal Reserve bank.
October 12th, 2009 at 11:18 pm
Should you “honor thy mother and father…,if they killed, committed adultery, stole, bear false witness against their neighbor, coveted…..?
If not……..then what?
October 13th, 2009 at 12:04 am
http://www.phytopthora.com http://www.pinetreeremoval.com
October 13th, 2009 at 6:27 pm
This is a very well orcastrated plan executed by very smart individuals who have no souls and are out to enslave us all. First step is to get the population to be controlled by the dollar then you kill the dollar leaving all that need it totally out of hope or any idea of what to do. While they do there best to inflict the community with there poisonous loans and killer interest rates we are all to suffer from our grown need for material possessions. I suggest you try to get as self sufficient as possible before it is to late. I include myself when I say that. The collapse of economic boundaries is under way. This however of course excludes the ones on top outside of the economical structure. For the one’s doing the experiment outside the petri dish shall not be harmed by the overall outcome of the experiment.