Posted on 11/07/2007 7:41:37 AM PST by BGHater
Sterling has pushed through the $2.10 barrier for the first time in 26 years after the Chinese government indicated it is prepared to diversify some of its huge foreign-exchange reserves.
The pound stormed to as high as $2.1021 in trading in London, a level not seen since the early Thatcher era, and many currency experts now predict it go higher despite signs that the UK economy is slowing.
The greenback's renewed weakness was sparked by comments from Cheng Siwei, vice chairman of China's National People's Congress, who suggested China will diversify some of its $1.33 trillion (£660bn) of foreign-exchange reserves.
Mr Siwei told a conference in Beijing: "We will favour stronger currencies over weaker ones, and will readjust accordingly."
Besides sterling, the dollar was down against 14 of the world's 16 biggest currencies this morning, hitting the lowest since the 1950s versus the Canadian dollar, reaching a new record against the euro and its weakest in more than 20 years against the Australian dollar.
Sterling's move higher comes a day before Bank of England Governor Mervyn King and the rest of the Monetary Policy Committee are due to give their latest decision on interest rates.
While the majority of economists expect interest rates to be left at 5.75pc, the surge in the currency is likely to put parts of the country's manufacturing industry under pressure.
The flight from the dollar is helping to fuel oil's assault on the $100-a-barrel mark and investors' appetite for gold, which is denominated in the US currency. The dollar was also hit yesterday by a report that the Fed's loan officer survey reported evidence of an incipient credit crunch across broad reaches of the US economy, with banks tightening lending standards on prime mortgages, auto debt and consumer loans.
Stop spending money we DON'T HAVE
Every cloud has a silver lining.........Our exports become cheaper, theirs become more expensive............
And since a lot of the consumer goods we use are imports, the masses of Americans (translate “voters”) get screwed.
Beautiful. That’s really great. True progress.
Oh yeah, democrats think they were elected to trim spending. The message they heard is raise taxes and spend more. Democrat success equals higher taxes and higher spending. W isn't helping trim either.
Screwed? Hardly.... Consumer goods from SAUDI ARABIA, CHINA, VIETNAM, PAKISTAN, TAIWAN, KOREA, etc...... This may be a good thing. Manufacturing of consumer goods has left our shores. Now maybe the tide will turn and factories that once were shuttered, will re-open with the latest in technology to re-ignite the American Industrial fires...........
Keep falling for that snow job. First off, China, the biggest exporter, does not revalue their currency, so there is no advantage there.
This is hitting you and every American in the pocket, and we are on the verge of a total banking and currency collapse, and everybody is sleeping through it all.
It's Thursday, October 24, 1929, and everybody is happy, there are two chickens in every pot, and a car in every garage, and it's all going to go on forever. The Wall Street Journal and the Treasury Secretary tell us so.
Calling President Hoover!
This could lead to some very bad results here. This is not going to give life to manufacturing in the US.
But it may cripple the country with some very bad side affects including inflation and very high energy prices.
It is time to be very concerned with all the US dollars China holds, if they start liquidating that, there’s big trouble ahead.
Now maybe the tide will turn and factories that once were shuttered, will re-open with the latest in technology to re-ignite the American Industrial fires...........
Uh no. Probably not.
I haven't seen a "worst economy since Hoover" post around here in a while. They always amuse me.
Oh. Wait. You're serious?
Well, that’s one way to look at it.
Don’t think of “Just petroleum”, but clothing, appliances, electronics, cosmetics, iron and all sorts of other “imports” as well. When we lost or manufacturing base to overseas “cheap labor” we lost a lot more than just jobs. This may be the beginning of a turn-around. All those ships from China waiting to be unloaded in our ports, will now be waiting to be loaded with our stuff going in the opposite direction.............
Not exactly. Any imports we get from China -- which pegs its currency to the U.S. dollar -- aren't affected by foreign exchange rates.
This is why I've long speculated that the U.S. government HAS ALWAYS BEEN IN FAVOR OF CHINA'S CURRENCY MANIPULATION POLICY, despite numerous public statements to the contrary.
Step back and look at the big picture. I’m usually as bullish on this country as anybody, but I think this macro trend is very serious and should not be underestimated. It’s reminiscent of the decline of Sterling as a world currency, and Britain as a leading world power, about sixty years ago. It took the public there about ten or twenty years to realize what had hit them.
If china dumps the dollar then aren’t they shooting themselves in the foot in terms of what they’re going to have to pay for oil?
It is my belief that China can't de-link the yuan from the dollar because the yuan would actually FALL against the dollar over the long term (it's basically a worthless currency on its own).
Correlation doesn't prove causation.
So instead of ships bringing us neat stuff other people made, we'll have ships taking away the neat stuff we made. How on earth is this a good thing for America?
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