From that same article: “Recent data from the Bank for International Settlements suggest the pace of diversification away from the dollar has been gradual, partly because dollar deposits by Organization of the Petroleum Exporting Countries have offset decreases from other countries, he said.”
So the diversification has started. Also, I expect to see less Tbill buying from UK. Lower gas prices means fewer dollars going to OPEC –> fewer dollars for them to invest in Treasuries (OPEC money flows through UK in Fed Flow of Funds report, so we should see a decrease in UK buying of Treasuries since last month) –> less demand for Treasuries and $ US -> higher interest rates and lower value of US $. So higher oil prices would make the US $ climb, and that is exactly what happened in the last 2 years. Does anyone have any insight on this?
FSD, the dollar’s value is tied to its fundamentals, namely supply and demand. If the Fed stops printing money and pays off some of the deficit, and we reduce our consumption and produce more and import less, then the dollar will gain value. At least that is my simplistic understanding. So we cannot return to any mean as long as we keep violating the fundamentals underpinning a strong dollar.
So I need to open a full service brokerage account to buy euro bonds? That is what I will do. Thanks for the info.
I can’t believe I was stupid enough to lose 33% of my money in the last few years, because I believed in the “full faith and credit” of the US government. I sure was fooled into thinking the dollar was a strong reserve currency. I’m seeing the light, and it’s not too late to act.
