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More News on the Assault on the Dollar

News today from the United Nations on their desire to end the Reserve Currency status of the dollar. This is getting very concerning.

us-dollar-bear

Here is the link to the graph above (copy/paste into your browser): http://stockcharts.com/h-sc/ui?s=$USD&p=D&yr=1&mn=0&dy=0&id=p53713895954&a=179728818

You can see the downtrend in the dollar and today’s continued downward move. This is not being taken seriously by most people, it seems to me, but it will have a big impact on investing activities in future months if not years.

Below is an article about the United Nation’s decision to crush the dollar. The fall of the dollar may be the over-riding macro investment theme for some time to come. I am in the process of analyzing how it impacts our investment themes and will publish it in our Investment Strategies newsletter. In the meantime, we have increased our foreign exposure and our exposure to companies with significant foreign sales as a hedge against any potential panic once business-entertainment TV finds this issue.

Take care and check back for more updates on this topic.

UN calls for new reserve currency
Oct 6 07:17 AM US/Eastern

The United Nations called on Tuesday for a new global reserve currency to end dollar supremacy which has allowed the United States the “privilege” of building a huge trade deficit.

“Important progress in managing imbalances can be made by reducing the reserve currency country?s ‘privilege’ to run external deficits in order to provide international liquidity,” UN undersecretary-general for economic and social affairs, Sha Zukang, said.

Speaking at the annual meetings of the International Monetary Fund and World Bank in Istanbul, he said: “It is timely to emphasise that such a system also creates a more equitable method of sharing the seigniorage derived from providing global liquidity.”

He said: “Greater use of a truly global reserve currency, such as the IMF?s special drawing rights (SDRs), enables the seigniorage gained to be deployed for development purposes,” he said.

The SDRs are the asset used in IMF transactions and are based on a basket of four currencies — the dollar, euro, yen and pound — which is calculated daily.

China had called in March for a new dominant world reserve currency instead of the dollar, in a system within the framework of the Washington-based IMF.