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Tibetan Monks May Hold Clue
to Dollar's Future: Amity Shlaes
Amity Shlaes
Bloomberg
Wednesday, April 9, 2008
These days, nobody seems to doubt that the U.S. dollar will
lose its status as the world's reserve currency. To watch the
financial news channels you would think that the dollar-yuan relationship
is so unstable that the only question is whether it will be Ben
Bernanke or Chinese monetary authorities who will determine the
details of the breakdown.
Perhaps the dollar won't surrender its anchor role so soon. And
perhaps that loss, if it comes, will happen because of events
that take place nowhere near men in suits at a central bank. Maybe
the answer to the dollar's riddle can be found in the cellphone
photo image of a Tibetan monk in crimson and orange squaring off
with a Chinese soldier.
Two economists at Deutsche Bank AG, David Folkerts-Landau and
Peter Garber, and a colleague, Michael Dooley of the University
of California at Santa Cruz, are making the case that the dollar
will remain an anchor. Their research concedes that the old dollar
order, that of Bretton Woods, may be past. But it suggests we
are in a second order, a Bretton Woods II, one that can be surprisingly
stable.
(Article continues below)
The Deutsche Bank argument starts with facts on which we all
agree. The Chinese regime made a deal with its people: It would
give them jobs and cars. The people would allow the regime to
stand.
The Chinese leaders used exports to drive the growth that created
those jobs. Their success put upward pressure on their own currency.
To keep its own workers' exports cheap, the Chinese government
resisted that pressure and intervened heavily in exchange markets,
snapping up U.S. Treasuries.
Full
article here.
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INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
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