New Global View of the US
by Addison Wiggin: Anonymous
Demands on the Federal Reserve
is living in debt, Russian Prime Minister Vladimir Putin said
yesterday when asked about the Grand Bargain the U.S. Congress is
voting on today.It is not living within its means, shifting
the weight of responsibility on other countries and in a way acting
as a parasite.
cruel irony: The deficit spending justified in the 1980s to defeat
the Soviet Union became business as usual for the ensuing
cut yesterday to avert default was not that great overall
because it simply delayed the adoption of a more systemic solution,
according to Putin, who was addressing a youth camp in central Russia.
U.S. encounters a systemic malfunction, this affects everyone,
he said. Thus does the prime minister suggest, and not for the first
time, his own more systemic solution.
should be other reserve currencies.
$115 billion in U.S. Treasuries. Thats only a 10th of Chinas
holdings, but still nothing to sneeze at.
For its part,
South Korea the worlds seventh-largest holder of U.S.
dollars reserves reacted to the agreement by
announcing the Bank of Korea has tripled gold holdings over the
past two months.
The $1.25 billion
purchase is the first addition to Korean gold holdings since the
Asian financial crisis of the late 1990s.
made an announcement today. They added $900 million to their gold
stash in June.
says the Financial Times, means central banks, sovereign wealth
funds and other so-called official sector buyers are
on track to record their largest collective purchase of gold since
the collapse of the Bretton Woods system, which pegged the value
of the dollar to gold, in 1971.
gold is powering into record territory this morning, the spot price
currently up $17, to $1,637. Silver, meanwhile, has pushed past
$40 again, sitting at $40.11 as we write.
one of the frontier markets we follow is running away
from the dollar in a different direction. Cambodias stock
market, opened last month, will allow trading in U.S. dollars
but only for the next three years. Then the Cambodian riel will
take center stage.
the Asian Development Bank, U.S. dollars account for 90% of the
currency in circulation in Cambodia. But thats due to change,
says our contact on the scene Leopard Capital chief and Vancouver
speaker Doug Clayton.
dollar is losing its credibility from the reckless quantitative
easing programs of the U.S. Federal Reserve, he tells
MarketWatch. It is becoming unsafe for Cambodia to delegate
its monetary policy to the bankrupt U.S., which hopes to inflate
its way out of its recession and huge debts.
investors would initially prefer to trade shares in dollars since
that is simplest for them, he continues. But once there
are enough riels in circulation and sufficient liquidity in the
foreign exchange market, trading shares denominated in riels will
not pose any problems for investors.
with permission from The Daily
Wiggin [send him mail]
is the editorial director and publisher of The Daily Reckoning.
He is the author, with Bill Bonner, of Financial
Reckoning Day: Surviving The Soft Depression of The 21st
Century and the upcoming Empire
of Debt. His
latest book is The
Demise of the Dollar...and Why It's Great for Your Investments.
© 2011 Daily Reckoning
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