Dollar Reserves Are Shrinking by Design
From Reuters, today: The Bank of Italy reduced its dollar reserves from 84% down to 63% during 2005. "Our expectations of Fed policy did not play any role," said an unnamed bank official.
"The emerging market economies of Asia and the Middle East have already started lowering their dollar exposure. . . .The broad point about the reserve story is that it is about diversification out of dollar given the risks. The pound seemingly is increasing in prominence as an alternative." (Tim Fox, forex strategist at Dresdner Kleinwort in London.)
Countries such as the United Arab Emirates and Russia have said they are shifting out of dollars and into other currencies like the euro.
From these reports, it seems that the shift is underway. We must pray that it will not culminate in a massive exit from the dollar. That would be a financial disaster for us and for much of the rest of the world. The central banks of the world know this fact and would like to sneak out of some dollars over time to prevent a sudden great loss in the dollar value and their reserves in dollars.
As always such news is good for precious metals and mining stocks. Gold has been showing more life over the last week. For the last 24 hours, gold hit a high of $653.50 this morning at 8:42 and a low of $638.60 yesterday at noon. Gold is currently at $650.10 and looks to be moving upward. Silver has been showing signs of life, as well, with a high of $12.58 today and a low of $11.95 last evening.
Mining and gold stocks: BGO 5.73; CBJ 3.39; CDY 1.72; CEF 9.26; DROOY 1.44 (Glad to have added some at 1.33 the other day); EGO 4.81; GPTC 0.19; GSS 3.13; HMY 14.31; IAG 9.96; KRY 2.73; MRB 3.18; NEM 52.90; NTO 5.31; PAAS 20.58; QEE 0.38; RNO 1.88; SSRI 21.63; XVE 8.35. All are responding fairly well.
The DJI have moved above 11,00 to 11,310 or so. That is good news for those in the general market. But I still believe there is great overall risk in general stocks. I stay with gold and silver bullion; mining, natural resource, and defense stocks; high dividend trusts; and foreign currencies. For foreign currencies, I use World Markets of Everbank.com. For the stocks, I use discount internet brokers which offer quick trades and low commissions.
Once again, we are looking forward to worship service on the Lord's Day. As Christians, it is our responsibility to meet together with the household of faith in corporate worship. Certainly, we can each go to the Lord directly, but He commands us to join in corporate worship. He even gave us an example of this as He lived on this earth. Dare we insult Him by not joining in corporate worship? We must not!
Best to each, Doug
"The emerging market economies of Asia and the Middle East have already started lowering their dollar exposure. . . .The broad point about the reserve story is that it is about diversification out of dollar given the risks. The pound seemingly is increasing in prominence as an alternative." (Tim Fox, forex strategist at Dresdner Kleinwort in London.)
Countries such as the United Arab Emirates and Russia have said they are shifting out of dollars and into other currencies like the euro.
From these reports, it seems that the shift is underway. We must pray that it will not culminate in a massive exit from the dollar. That would be a financial disaster for us and for much of the rest of the world. The central banks of the world know this fact and would like to sneak out of some dollars over time to prevent a sudden great loss in the dollar value and their reserves in dollars.
As always such news is good for precious metals and mining stocks. Gold has been showing more life over the last week. For the last 24 hours, gold hit a high of $653.50 this morning at 8:42 and a low of $638.60 yesterday at noon. Gold is currently at $650.10 and looks to be moving upward. Silver has been showing signs of life, as well, with a high of $12.58 today and a low of $11.95 last evening.
Mining and gold stocks: BGO 5.73; CBJ 3.39; CDY 1.72; CEF 9.26; DROOY 1.44 (Glad to have added some at 1.33 the other day); EGO 4.81; GPTC 0.19; GSS 3.13; HMY 14.31; IAG 9.96; KRY 2.73; MRB 3.18; NEM 52.90; NTO 5.31; PAAS 20.58; QEE 0.38; RNO 1.88; SSRI 21.63; XVE 8.35. All are responding fairly well.
The DJI have moved above 11,00 to 11,310 or so. That is good news for those in the general market. But I still believe there is great overall risk in general stocks. I stay with gold and silver bullion; mining, natural resource, and defense stocks; high dividend trusts; and foreign currencies. For foreign currencies, I use World Markets of Everbank.com. For the stocks, I use discount internet brokers which offer quick trades and low commissions.
Once again, we are looking forward to worship service on the Lord's Day. As Christians, it is our responsibility to meet together with the household of faith in corporate worship. Certainly, we can each go to the Lord directly, but He commands us to join in corporate worship. He even gave us an example of this as He lived on this earth. Dare we insult Him by not joining in corporate worship? We must not!
Best to each, Doug
posted by Doug @ 9:05 AM
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