So do the BRICS think the dollar is a good investment? No. Then why buy more of it. For the same reason people send good money after bad. The BRICS collectively have between 2-3 Trillion US dollars. If they start dumping them or even *appear* to be dumping them, then that drives down the value of their holdings.
What the BRICS have to do is keep the illusion going that the dollar is sound. That it is strong. That their faith is "unshakable". They have to do that with the right hand. Meanwhile with the left hand, they use those dollar assets as collateral to buy real, tangible assets.
Rare earth metals, http://bbs.chinadaily.com.cn/viewthread.php?gid=2&tid=638041
US Real Estate, http://www.msnbc.msn.com/id/29162036/
Military build up, http://uk.reuters.com/article/idUKTRE54363X20090504
Of course they need the US dollar to stay strong. The easiest way to defeat an enemy is to lull them to sleep with a false sense of security.
The US is too obsessed with the latest pop event of the day to notice.
So go long the dollar short term, but in the long term (2020) understand that the US dollar is doomed unless Washington changes it ways.
Posts
No comments:
Post a Comment