Created Thu 24th Sep 10:50am PST by 
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Will a new global reserve currency replace the US Dollar in 2010?
Background: HSBC bids farewell to dollar supremacy
The sun is setting on the US dollar as the ultra-loose monetary policy of the US Federal Reserve forces China and the vibrant economies of the emerging world to forge a new global currency order, according to a new report by HSBC. "The dollar looks awfully like sterling after the First World War," said David Bloom, the bank's currency chief.
"The whole picture of risk-reward for emerging market currencies has changed. It is not so much that they have risen to our standards, it is that we have fallen to theirs. It used to be that sovereign risk was mainly an emerging market issue but the events of the last year have shown that this is no longer the case. Look at the UK - debt is racing up to 100pc of GDP," he said. Crucially, China and rising Asia have reached the point where they can no longer keep holding down their currencies to boost exports because this is causing mayhem to their own economies, stoking asset bubbles. Asia's "mercantilist mindset" of recent decades is about to be broken by the spectre of an inflation spiral. The policy headache was already becoming clear in the final phase of the global credit boom but the financial crisis temporarily masked the effect. The pressures will return with a vengeance as these countries roar back to life, leaving the US and other laggards of the old world far behind.
Full News Article @ Telegraph.co.uk
http://tinyurl.com/ljkxv4
The sun is setting on the US dollar as the ultra-loose monetary policy of the US Federal Reserve forces China and the vibrant economies of the emerging world to forge a new global currency order, according to a new report by HSBC. "The dollar looks awfully like sterling after the First World War," said David Bloom, the bank's currency chief.
"The whole picture of risk-reward for emerging market currencies has changed. It is not so much that they have risen to our standards, it is that we have fallen to theirs. It used to be that sovereign risk was mainly an emerging market issue but the events of the last year have shown that this is no longer the case. Look at the UK - debt is racing up to 100pc of GDP," he said. Crucially, China and rising Asia have reached the point where they can no longer keep holding down their currencies to boost exports because this is causing mayhem to their own economies, stoking asset bubbles. Asia's "mercantilist mindset" of recent decades is about to be broken by the spectre of an inflation spiral. The policy headache was already becoming clear in the final phase of the global credit boom but the financial crisis temporarily masked the effect. The pressures will return with a vengeance as these countries roar back to life, leaving the US and other laggards of the old world far behind.
Full News Article @ Telegraph.co.uk
http://tinyurl.com/ljkxv4
Settlement details:As reported by a major mainstream news source.
Forecast history %
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| No |
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Question suspends in 1 year
- Activity: H$63,393 |
- Predictions: 29 |
Comments: 3
Get widget!Predictions (29)
dnicolo1
predicted No (H$20 at 93%)
kruijs![[Power User]](http://www.hubdub.com/images/icon_superuser.gif "This user is a super user"){kind=icon}
predicted Yes (H$100 at 7%)
notablenotices
predicted No (H$100 at 71%)
bohnanza
predicted No (H$1,000 at 72%)
cookietime
predicted No (H$750 at 80%)Comments (3)
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http://www.hubdub.com/m36796/Will_a_new_global_reserve_currency_replace_the_US_Dollar_in_2009
http://www.ft.com/cms/s/0/2b5e1908-c8e3-11de-8f9d-00144feabdc0.html?nclick_check=1
Gold prices yesterday surged to an all-time high after India's central bank bought 200 tonnes of the precious metal, swapping dollars for bullion as the country's finance minister warned that the economies of the US and Europe had "collapsed".
India's decision to exchange $6.7bn for gold, equivalent to 8 per cent of world annual mine production, sent the strongest signal yet that Asian countries were moving away from the US currency.
The purchase by New Delhi's Reserve Bank from the International Monetary Fund pushed gold prices to a record $1,087.45 per troy ounce, up 2.7 per cent on the day, as traders bet that other central banks would also become buyers. Pranab Mukherjee, India's finance minister, said the acquisition reflected the power of an economy that laid claim to the fifth-largest global foreign reserves: "We have money to buy gold. We have enough foreign exchange reserves."
He contrasted India's strength with weakness elsewhere: "Europe collapsed and North America collapsed."
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