Role and value of U.S. dollar set to fall: Asia think tanks

[Matter-Eater Lad]

TOKYO (Reuters) - The role of the U.S. dollar as the key global currency will decline after the financial crisis, and its value may also weaken due to America's current account deficit, officials at some of Asia's top think tanks said.

 

But Asia, which is heavily invested in U.S. assets, hopes any decline in the dollar will be gradual to avoid further shocks to financial systems, the officials said on Thursday.

 

"The dollar's role will gradually be shifted," Zhang Yunling, director of Institute of Asian and Pacific Studies at Chinese Academy of Social Sciences, told a news conference in Tokyo after a meeting of Asian research groups.

 

"China hopes to have a stable and gradual transition rather than a radical revolution," he added.

 

The dollar logged its biggest daily fall against a basket of currencies in more than two decades on Wednesday as the U.S. Federal Reserve said it would buy long-term Treasuries.

 

The Fed move stirred worries that the U.S. would spew dollars into global markets, leading to an oversupply of the world's main reserve currency.

 

Chalongphob Sussangkarn, a former Thai finance minister and now president of Thailand Development Research Institute, also expressed worries about any sharp fall in the dollar.

 

"The U.S. deficit is so huge. This is why all countries, particularly East Asia, are concerned because we hold a lot of these assets. What happens if the U.S. dollar falls 40 percent? Many central bankers will be losing huge amounts of money."

 

The officials also called on East Asian leaders attending next month's G20 summit in the UK to avoid competitive currency depreciation as a way to escape from the current crisis.

 

(Reporting by Yoko Nishikawa; Editing by Kim Coghill)

 

http://www.reuters.com/article/newsOne/idUSTRE52I1OM20090319

 

 

I really hate to see Helicopter Ben getting what he wanted.:veryangry2:

 

But maybe if he gets what he wanted, the people will finally say enough is enoug hand end the Fed? Get your pitchforks ready?

[mikegoodboy2009]

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[noonsun]

pitchfork at the ready, Nick. :rolleyes:

 

nice article. thankies.

[Saffire]

This is a "pump and dump" scheme. Basically we borrow money from China to buy Chinese goods, then when it comes time to return the money, we print it.

 

It's almost exactly like shorting a stock you've got control over. At first you borrow shares at the high price, immediately sell it, and later when it's time to return the shares to the broker you buy them back at the lower price.

 

I feel sorry for the Asian folks who worked their asses off for us. Oh well, now they know better!

[Matter-Eater Lad]

This is a "pump and dump" scheme. Basically we borrow money from China to buy Chinese goods, then when it comes time to return the money, we print it.

 

It's almost exactly like shorting a stock you've got control over. At first you borrow shares at the high price, immediately sell it, and later when it's time to return the shares to the broker you buy them back at the lower price.

 

I feel sorry for the Asian folks who worked their asses off for us. Oh well, now they know better!

 

Its all how you see it, China bought America off so they could build up their industrial base and power while we decline. In the end I think this will be a win win for China. They'll take a small financial loss but we've transfered the real wealth to Asia while our countries economy has declined and production has halted.

 

They'll be able to use this over our heads for quite some time, I've said before I wouldn't be surprised if Obama comes out and says Taiwan was harboring Osama....and we need to let China in our self defense take it over.;)

 

We have a few things left to give to China like military secrets ,weapons and technology.