By Rocky Vega
10/12/09 Stockholm, Sweden – Bloomberg reports today that central banks “are increasingly snubbing dollars in favor of euros and yen,” which is doing no favors for an already beaten down US dollar.
In a somewhat contrary perspective, Naked Capitalism points out that the foreign central banks are still increasing dollar holdings but are shifting “marginal purchases in favor of the euro and yen.”
No matter how you slice it, the dollar is getting pummeled and in the long run its outlook is very poor. The US can’t afford to have its currency lose much more of its increasingly flagging popularity. Faith in the US dollar is waning across the globe at a time when the US needs financial support more than ever.
You can read Naked Capitalism’s perspective on diversification away from the greenback and Bloomberg’s original coverage of the dollar reaching a breaking point for more details.
Rocky Vega is a regular contributor to The Daily Reckoning. Previously, he was founding publisher of UrbanTurf and RFID Update, which he operated from Brazil, Chile, and Puerto Rico, and associate publisher of FierceFinance. He specialized in direct marketing at MBI, facilitated MIT Sloan School of Management programs, and has been featured on CBS. Vega graduated with honors from Harvard University, where he was on the board of Let’s Go Publications and directed business programs involving McKinsey, Goldman Sachs, and Harvard Business School faculty. He is also enrolled at the Stockholm School of Economics.
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