Syria Ends Peg of Pound to US $, Stocks Walloped

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Submitted by powayseller on July 12, 2006 - 5:14pm

My predictions are coming true every day.

The dollar will fall and the US economy is going into recession.

First, here's a story about Syria ending its currency peg to the dollar.

"Syria, accused by the United States of supporting terrorism, plans to end its currency peg to the dollar by December to reflect closer trade ties with Europe, the governor of the country's central bank said.

The bank has already converted half of its foreign-exchange reserves to euros, the central bank governor, Adib Mayaleh, said during a telephone interview from Damascus, without being more specific.

Syrian reserves, including gold, totaled $4.1 billion at the end of 2005, according to the CIA.

The amount of reserves is small, similar to the amount held by Lithuania's central bank, but investors are closely tracking moves by central banks around the globe as they shift from the euro to the dollar. The re- allocation reflects the growing clout of the euro, the world's second-most widely used currency. The shift may also be an investment decision based on the belief that the dollar has further to fall, analysts say.

Central bankers from Kuwait, Qatar, the United Arab Emirates, Russia, Sweden and Finland have indicated this year that they plan to diversify their reserves away from the dollar."

Now, for movement toward recession. Consumer spending slows, company profits decline, and stock prices will keep going down. Today, another day that stocks got walloped . The reasons for the decline given in the article should be ignored. These business writers have as little clue as I do about why the markets move a certain way. I wish they would stop writing with such certainty about the reason for the price changes.

The dollar was up today according to the article, but don't let that distract you. Down markets have little ups and downs, on the way down.

I can find lots of stories about the dollar sell-off, and foreign central banks diversifying out of dollars. If you need more proof, ask and I will provide.

In the meantime, consider putting some of your cash into non-US $. Perhaps euros. You can get FDIC insured euros through Everbank. This is not investment advice; please do your own research. If you believe the dollar will keep losing value (and most central banks now are diversifying out of the dollar), then you can diversify. Maybe 5% or 10% in euros, 10% in gold...

Submitted by DrChaos on July 12, 2006 - 10:39pm.

I heard there's a saying in boxing: "You can't beat somebody with nobody."

The Euro and its economies have their own structural problems, and their banks are at the moment concerned with the high price of the euro and plan to reduce it to help their exporters.

Japan of course has always done this, and the latin american economies as well.

I see almost everybody engaging in competitive devaluations.

I'm not convinced that banks using some euros as reserves is going to make a substantial secular difference, maybe 5 or 10%, but not a huge catastrophic problem.

If you could invest in Chinese hard assets, on the other hand----but of course the Chinese government ensures that all foreign investors will eventually get the shaft some how.

Canada is trying to reduce the loonie.

Only Russia seems happy with the increasing strength of its oil-backed ruble.

Submitted by powayseller on July 13, 2006 - 6:18am.

How do you reduce the value of your currency?

Someone posted here recently that he would invest in Canadian dollars, not in euros.

Since I can't figure out which currency is strongest, and I know the dollar has many problems (and so do the others), it makes sense to diversify.

Is there a reason I should hold all my cash in dollars?

Submitted by paramount on May 5, 2013 - 10:30pm.

powayseller wrote:
My predictions are coming true every day.

The dollar will fall and the US economy is going into recession.

First, here's a story about Syria ending its currency peg to the dollar.

"Syria, accused by the United States of supporting terrorism, plans to end its currency peg to the dollar by December to reflect closer trade ties with Europe, the governor of the country's central bank said.

The bank has already converted half of its foreign-exchange reserves to euros, the central bank governor, Adib Mayaleh, said during a telephone interview from Damascus, without being more specific.

Interesting...I wonder if there is a connection to current events in Syria?

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