Great quote on the dollar today. Hat-tip to Jack Crooks of BlackSwanTrading.com for bringing it to my attention:
“If money is a moral contract between government and its citizens, we are being violated. The rest of the world, meanwhile, simply wants to avoid being duped. That is why China and Russia—large holders of dollars—are angling to invent some new kind of global currency for denominating reserve assets. It’s why oil-producing Gulf States are fretting over whether to continue pricing energy exports in depreciated dollars. It’s why central banks around the world are dumping dollars in favor of alternative currencies, even as reduced global demand exacerbates the dollar’s decline. Until the U.S. sends convincing signals that it believes in a strong dollar—mere rhetorical assertions ring hollow—the world has little reason to hold dollar-denominated securities.” — Judy Shelton at the Wall Street Journal
XX Sean’s note: For an opposing view — and remember, a good trader is always open to opposing views, studying them to find the weaknesses in his own view – go read “The Rumors of the Dollar’s Death are Much Exaggerated” by Martin Wolf at the Financial Times.
Interestingly, Mr. Wolf defends the dollar, but concludes by saying a new international currency would be a good thing, and we need alternatives now. He’s either confused or his definition of dollar health is different from the one used by most of the central bank jawboners.
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