Before the summit, Arkady Dvorkovich, economic adviser of the Kremlin, it had advance: China and Russia will raise their position which the global exchange system needs the creation of several regional currencies of reserve, which soon they could become international. China has around 70% of its reserves in dollars. According to Reuters, during the meeting of the G8, the Chinese state advisor, Dai Bingguo, it made a call to that the world diversifies the reservations system and aims at relatively stable types of change, in which represents a clear attack the American currency. Frequently BSA has said that publicly. All the kind context against the dollar. It will follow debilitdose in the medium one in the long term? Obama was had it jeopardize to maintain its value.
The strength of the currency is part of the economic strategy of the American government. The question happens to know how much effort will be arranged to make Obama achieve this objective and how much it will be able to support the temptation that can generate to him a dollar weak, beneficial for the competitiveness of the American economy. The investors already are making their bets against the dollar. Axel Merk, administrator of the bottoms Merk Hard Currency (MERKX) and Asian Currency (MEAFX) Funds, recognized in The Wall Street Journal that is taking long positions against the dollar because it sees a future weakening of the North American currency. First of these bottoms one is made up in a 24% of liquidity in Euros, 17% in crowns Norwegians (stimulated by the income who the country perceives by its petroleum exports), around 35% in commodities related to the currencies of Australia, New Zealand Canada, and a 14% in gold.
Another great bet that exists in the market is by the inevitable appreciation that it will have they yuan as soon as the Chinese government bristle before the pressures, mainly of the USA so that the currency is fortified in front of the dollar. This bet by yuan is realised through covers of type of change which becomes to traverse bets with great banks in the direction in which it behaves yuan. The world knows that in the short term it cannot loosen the hand to him to the dollar by two reasons. First it is the great commitment of the investments of the international reserves of the countries in assets denominated in dollars. The second reason is that the dollar is serving as containment dock before the increase of the uncertainty in the markets. If the dollar, that is one of the few reliable refuges for the investor, falls, then the crisis can reach unmeasurable dimensions. In the medium and long term, nevertheless, the dollar already is lost its world-wide leadership that is translated in a smaller global demand of assets denominated in this currency, which will be debilitating it against the impossibility of the USA to maintain it. Original author and source of the article.