Barclays Capital

The greenback has lost its appeal as a safe haven now that investors put aside his aversion to risk and leave in search of more profitable alternatives. Barclays Capital disseminated a fact that can not pass: between the months of April and June, central banks around the world accumulated more than half of its reserves in euros, for the first time in a period of high demand, being also the first time that purchased $ fee drops to 37%. According to the Basel International Bank of payments (BIS), the dollar accounted for 62.8% of the world’s reserves at the end of the first half, less than the end of 2008 when he explained 64% of total reserves. Pablo Guijarro, AFI plotted what is happening: it is a trend that has been dragging since 10 years ago. For some economies, secede from the dollar is linked to avoid that being tied to a currency now weak follow generating them damage. Paul Gamble, director of research at saudi Jadwa Investment Bank, warns of negative consequences for the economies of the Gulf: A persistent decline in the dollar may eventually lead to more inflation, a phenomenon that will be exacerbated by the rise in raw materials that serve as refuge against a weakened dollar value. Is for this reason that it is still evaluating, logically in secret (since it could imply a new impact negative on the dollar affecting the reserves of these countries and their stability), the possibility to dismiss direct dependence of the greenback, situation followed with attention and enthusiasm by China given the huge volume of its trade relations with the Gulf countries. That the dollar will continue to weaken is for Pebble, a fact as well as its graduality: but even so, and despite all the pressures, the loss of prominence is and will continue to be very gradual.

Unfortunately I do not see that this graduality who is observing and predicts, it will be kept, Pebble can be sustained. Increasingly, the factors that threaten the sustainability of the dollar. And to make matters worse, the absence of international cooperation is worsening the situation. Gold on the other hand, is a reflection of the situation in which the U.S. dollar. The increase in your quote responds to the weakness of the dollar.

In these times in that everybody’s looking for the way to dissociate itself from the dollar, gold may appear as a big business. In this sense, the looks are put to what China can do. China’s economy has more than 29% of the world reserves in foreign currency and only 2% of them are gold. The margin so that the Chinese Government ordered purchases of gold is broad and prospects for revaluation for the precious metal are very high. Can one think in the recovery of the dollar? It is a question which, despite some economic variables that show any signs of hope, is still negative. Horacio Pozzo opportunity investment – our Global value investment report subscribers carry over 30% gain since July. And you are it will continue losing? Sold to date values: 0 Click here to subscribe original author and source of the article.