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Dollar Decline “Irreversible”
The Independent
November 17, 2007
The decline of the dollar, symbol of US global hegemony for the best part of a century, may have become so entrenched that some experts now fear it is irreversible.
After months of huge and sustained turmoil on the money markets, lack of confidence in the world’s totemic currency has become so widespread that an increasing number of international traders are transferring their wealth to stronger currencies such as the euro, which recently hit its highest level against the dollar.
“An American businessman over here who is given the choice would take anything but the dollar,” David Buik of Cantor Index said yesterday. “I would want to be paid in yen, and if not yen then the euro or sterling.”
Matthew Osborne, of Armstrong International, added: “The majority would say sterling. There are a few dealers in the City who may take the view that they’ll take dollars now, while they’re cheap, and hold on to them for 12 months.
“But the problem is so serious that there are people who in July or August might have been thinking, ‘I’m paid in dollars, how annoying’ for whom it’s now a question of, ‘Do you have a job; do you have a bonus?’ “
The collapse of the sub-prime mortgage market in the US, which is fuelling the dollar unrest, has already brought down one British bank, Northern Rock, and has forced others to declare vast losses. Yesterday, just as it appeared that the dollar might have finally reached its floor, there was another warning that the sub-prime crisis is going to get worse. The US Treasury Secretary Henry Paulson, warned an international business summit in South Africa: “The sub-prime market, parts of it will get worse before it gets better.” Huge numbers of US homeowners are still cushioned by introductory interest rates set when they took out loans in 2005 or 2006, he said. When these introductory offers run out, their interest payments will increase, setting off another wave of defaulting and repossessions. And the dollar is enduring its rockiest spell in recent memory.
Goldman Sees Subprime Cutting $2 Trillion in Lending
Bloomberg
November 16, 2007
Nov. 16 (Bloomberg) — The slump in global credit markets may force banks, brokerages and hedge funds to cut lending by $2 trillion and trigger a “substantial recession” in the U.S., according to Goldman Sachs Group Inc.
Losses related to record home foreclosures using a “back- of-the-envelope” calculation may be as high as $400 billion for financial companies, Jan Hatzius, chief U.S. economist at Goldman in New York wrote in a report dated yesterday. The effects may be amplified tenfold as companies that borrowed to finance their investments scale back lending, the report said.
“The likely mortgage credit losses pose a significantly bigger macroeconomic risk than generally recognized,” Hatzius wrote. “It is easy to see how such a shock could produce a substantial recession” or “a long period of very sluggish growth,” he wrote.
Goldman’s forecast reduction in lending is equivalent to 7 percent of total U.S. household, corporate and government debt, hurting an economy already beset by the slowing housing market. Wells Fargo & Co. Chief Executive Officer John Stumpf said yesterday that the property market is the worst since the Great Depression.
Citigroup Inc., the biggest U.S. bank, and Merrill Lynch & Co. have led companies writing down more than $50 billion on securities linked to subprime mortgages. The risk of further losses by banks has pushed their borrowing costs above the average for investment-grade companies, according to Merrill Lynch indexes. Citigroup paid bondholders the highest yield relative to benchmark interest rates in its history this week.
Will Dow-gold ratio hit one-to-one again?
http://www.thestar.com/Business/article/276972
Markets poised for severe fall: Bank of England
http://www.telegraph.co.uk/mon….cnking115.xml
Stiglitz: Greenspan To Blame For Crisis
http://www.bloomberg.com/apps/news?…6mHrJk&refer=us
Wells Fargo: Housing worst since Great Depression
http://www.guardian.co.uk/feedarticle?id=7080215
China State TV To Viewers: Dump The Dollar
http://mparent7777-2.blogspot.com/…p-dollar.html
Cost Of The Crunch $2 Trillion, Says Goldman
http://www.forbes.com/2007/11/16/gold….ed=rss_news
Goldman Sees Subprime Cutting $2 Trillion in Lending
http://www.bloomberg.com/apps/new…A&refer=home
Suddenly ‘world’s biggest financial institutions are paying more to borrow in the corporate bond market than the average company’
http://www.bloomberg.com/apps/…fqw&refer=home
Investors Should Spank Banks for Betraying Trust
http://www.bloomberg.com/apps/news….4&refer=home
Pound Poised for Biggest Weekly Drop Against Dollar Since 2005
http://www.bloomberg.com/apps/new…8&refer=uk
Warning over rate rise by ‘devious’ lenders
http://www.telegraph.co.uk/news/main.j…1/17/nrates117.xml
Fed Pumps $47bn Into System, Goldman Sachs Warns Recession
http://noworldsystem.com/2007/11/17/fed…s-recession/
Gold falls below $800 and Oil Slides $94 a Barrel
http://noworldsystem.com/2007/11/16/g…-a-barrel/
Jim Rogers Urges People To Sell Dollars
http://www.bloomberg.com/apps…d=aXH9wCx1oydw
Gold steadies as bargain hunters resurface
Gulf states’ dollar peg comes under threat
Pound hits fresh 4-yr low vs euro after weak data
Economists in poll expect credit turmoil to continue: WSJ
UK: Fastest rise in food prices for 14 years
Forex – Pound sinks as Oct retail sales show flagging sentiment
Bank’s grim warning over UK economy
Consumer inflation posts increase
Inflation, gold: Back to the 1970s?
Goldman Sachs bets credit crisis will worsen
British taxpayers face paying £730 EACH to cover Northern Rock in plans to ‘nationalise’ bank
Carnage on Wall Street as loans go bad
Treasury Market Inflation Anxiety Renewed
‘Sub-prime black hole is getting scarier’
California, Ohio, Florida Cities Lead U.S. Foreclosure Filings
US dollar will get stronger: Bush
Dollar to stay anchor of China’s reserves: Chinese official
When I start seeing Jay-Z flashing euros instead of the dollar, I know our economy is in trouble
Talk of Worst Recession Since the 1930s
Recession fears grow as inventories swell
Recession fears grow as inventories swellOECD Says the Full Effect of the Sub-Prime Mess is Still in Front of Us
MBIA, Ambac Downgrades May Cost Market $200 Billion
Paulson Becomes Boxed-in by `Strong’ Dollar Chant
88% Erosion and Purchasing Power
Bear Stearns Cuts Subprime Assets, Limits Writedown
Orlando Foreclosure Filings Up 184%
Judge rules against the banks!?
Crude Oil = $98; Gold = $845
Wall Street Sees Worst Weekly Point Loss Since 9/11
Gold bounces above $800 after 1 percent drop
It’s the FIRE Economy, stupid
Dollar Crisis: None dare call it ‘conspiracy’
Subprime Losses May Reach $300/400 Bil
Sterling falls as risk aversion leads to carry unwind
Time for the White House to Rescue the Dollar?
Bets against the dollar unlikely to slow this quarter
Even a weakened dollar still rules
World stocks hit 8-week low
With the dollar’s fall, intervention idea gains force
Currency Controls Return as Central Banks Fight Gains
The Risk of a Systemic Shock to the System is “Alarmingly High” – Morgan Stanley
Wall Street’s money machine breaks down
Oil Price Rise Causes Global Shift in Wealth
Global credit crisis intensifies
Ron Paul to Bernanke: How can we solve inflation with more inflation?
U.S. Economic Collapse News Archive
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