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-- Posted Sunday, 25 October 2009 | Digg This Article | | Source: GoldSeek.com
So long as the Chinese renminbi is linked to the US dollar billionaire hedge fund manager George Soros says he does not see how the decline in the US dollar can go too far. It is this sort of simple logic from the man who broke the Bank of England for a $1 billion profit in 1992 that makes currency traders sit up and pay attention. Mr. Soros has also made some bad calls but his $7 billion fortune stands as testimony that he is right more often than he is wrong. Lack of confidence In an interview with the Financial Times he also noted: ‘There is a general lack of confidence in currencies and a move away from currencies into real assets’. Americans are obsessed with the Fed and its money printing while ignoring the inconvenient truth that this is happening all over the world. The Chinese stimulus package equivalent to 14 per cent of GDP dwarfs the American plan, and is pumping money into the economy at a furious – some would say unsustainable – pace. Meanwhile, observers have become quick to predict the demise of the US dollar while perhaps not appreciating that what they are forecasting has already happened. The dollar has, for example, lost half its peak value against the euro, and is desperately low against the yen. Dollar rally? All currency values are relative and the US dollar may be close to the limit of its decline against other major currencies whose governments are also having to bail out their economies in difficult times. Indeed, there is quite a good reason to expect a dollar rally. That would come if global stock markets decide to end their current rally which seems more to do with liquidity sloshing around than economic fundamentals. If Mr Market switched in manic fashion from optimism to pessimism then falling stock prices would produce an automatic rally in the US dollar as we saw last autumn. Would that also undermine the current interest in ‘real assets’ that Mr. Soros notes? That is a tougher call but industrial commodities would surely suffer in a reassessment of the economic outlook. Precious metals might hold on as a safe haven like the US dollar, although that did not hold true a year ago.
-- Posted Sunday, 25 October 2009 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
 
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George Soros Sees Renminbi Link Saving the US Dollar
