Over the last three months, banks put 63 percent of their new cash into euros and yen — not the greenbacks — a nearly complete reversal of the dollar’s onetime dominance for reserves, according to Barclays Capital. The dollar’s share of new cash in the central banks was down to 37 percent — compared with two-thirds a decade ago.
Currently, dollars account for about 62 percent of the currency reserve at central banks — the lowest on record, said the International Monetary Fund.
Let me repeat. Paulson/Geithner/Obama/Bernanke DID NOT fix the financial crisis, they just threw money at it without fixing the underlying problems. Patting themselves on the back for saving the US is entirely premature.
whiskyrebellion
krugman says a dropping dollar is good, and will spur domestic manufacturing…
Ian Welsh
To some extent, yes. But not as much as is needed, because it isn’t dropping against the currency that matters.
tc
Of course you (and I) sound like Chicken Littles to most folks. They need proof, as in standing ankle deep in broken sky. I think at this point it’s more like the denial you used to see in a formulaic Irwin Allen disaster film. People are afraid to think of what lies ahead, so they just follow the instructions of the misguided authority figure.
Right now they are scarfing up real estate again, at least around here, because allegedly Austin has “never” had a bubble (although Texas used to be famous for its cycles of r/e booms and busts, the previous one ending in 2001/2002, that all went down the memory hole).
The result is we don’t have a (perfectly rational) panic and rush for the exits by the masses, but rather a nice controlled soft landing where the big money gets to exit first. The rest of us will be toast, like Whitesnake fans stacked in a doorway.
Formerly T-Bear
Just checked, $1.49+ will buy €1.00. The price of oil is W.Tex Intermediate $75.+ bbl, Brent $73.+ bbl.
Conclusion: The dollar is being punished.
bernard
but but but the dow jones industrial average broke the 10,000 barrier today 14 october 2009 for the first time in over a year so the economy must be recovered and the Great Recession is over and we just need to stop questioning our betters and quit being nattering nabobs of negativity and we just need to get out there and do our patriotic duty which is buybuybuy spendspendspend goindebt goindebt goindebt and keep our pie holes shut and basically just shut the f*** up and not worry about the increasing unemployment or all of the disappearing jobs that are never coming back ………..
Paul
Clearly, there are people who saw this coming (economic collapse), knew/know why it happened, and more importantly have solutions. What is to be gained by not fixing the systemic problems? It can’t be just idealogical differences; or can it?
Ian Welsh
People got and are getting rich under the old system. In addition it’s what they’re comfortable with and know. They also genuinely believe that if their asses aren’t saved everyone will go down with them. That isn’t true, imo, but it’s quite natural for them to believe it. And folks like Geithner, Bernanke and Paulson are products of the system, they believe in the system, the big executives are their friends and peers, etc…
Paul
Not an answer I wanted to hear but one I suspected. Thanks.