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Oct. 29 (Bloomberg)
Bargaining while buying some trinkets in the Maldivian capital, Male, recently, I heard most unexpected words: ``You can keep your dollars.''
This tiny nation of 1,200 islands has long accepted U.S. currency out of convenience for visitors and financial sobriety. The dollar tended to do better in global markets than the local monetary unit, the rufiyaa. That may be changing and it's a bad omen for the world's reserve currency.
These things start out slowly, and in recent months I have had similar experiences from Mexico to Vietnam. In markets, restaurants, taxis and tourist shops that long accepted dollars, many are opting for local currency. The reason: concerns the dollar plunge that analysts have predicted for years is afoot and that the U.S. is uninterested in halting it.
Transformational Event
There's also a nascent realization that something transformational may be happening in global markets. Some states that long pegged their currencies to the dollar are scrapping the policy -- like Kuwait -- while others are quietly considering it. A survey by HSBC Holdings Plc found that twice as many Gulf businesses see benefits from dropping currency pegs to the dollar as those that see negative consequences.
`Rogue Nation'
President George W. Bush's handiwork doesn't help, of course. In December 2004, former Malaysian Prime Minister Mahathir Mohamad suggested Muslim countries should refuse to trade in dollars and use their economic influence to force a change in U.S. policies. The U.S. ``owes huge sums of money to the rest of the world,'' Mahathir said. ``If people do not keep giving money to the U.S., it will go bankrupt.''
For years now, Joseph Quinlan, chief market strategist at Bank of America Corp. in New York, has been warning that the U.S.'s image as a ``rogue nation'' is a key force behind the dollar's decline.
...
The USA need to emphatically distance themselves from anything to do with Bush, his NeoCons and their counterproductive state terrorism abroad while turning the country into a police state at home if they want to stem the current tide.
We need to remember that we're all of us sitting in the same boat in a very inter-connected world and that what's bad for our friends across the Atlantic isn't good for us either...
Bargaining while buying some trinkets in the Maldivian capital, Male, recently, I heard most unexpected words: ``You can keep your dollars.''
This tiny nation of 1,200 islands has long accepted U.S. currency out of convenience for visitors and financial sobriety. The dollar tended to do better in global markets than the local monetary unit, the rufiyaa. That may be changing and it's a bad omen for the world's reserve currency.
These things start out slowly, and in recent months I have had similar experiences from Mexico to Vietnam. In markets, restaurants, taxis and tourist shops that long accepted dollars, many are opting for local currency. The reason: concerns the dollar plunge that analysts have predicted for years is afoot and that the U.S. is uninterested in halting it.
Transformational Event
There's also a nascent realization that something transformational may be happening in global markets. Some states that long pegged their currencies to the dollar are scrapping the policy -- like Kuwait -- while others are quietly considering it. A survey by HSBC Holdings Plc found that twice as many Gulf businesses see benefits from dropping currency pegs to the dollar as those that see negative consequences.
`Rogue Nation'
President George W. Bush's handiwork doesn't help, of course. In December 2004, former Malaysian Prime Minister Mahathir Mohamad suggested Muslim countries should refuse to trade in dollars and use their economic influence to force a change in U.S. policies. The U.S. ``owes huge sums of money to the rest of the world,'' Mahathir said. ``If people do not keep giving money to the U.S., it will go bankrupt.''
For years now, Joseph Quinlan, chief market strategist at Bank of America Corp. in New York, has been warning that the U.S.'s image as a ``rogue nation'' is a key force behind the dollar's decline.
...
The USA need to emphatically distance themselves from anything to do with Bush, his NeoCons and their counterproductive state terrorism abroad while turning the country into a police state at home if they want to stem the current tide.
We need to remember that we're all of us sitting in the same boat in a very inter-connected world and that what's bad for our friends across the Atlantic isn't good for us either...
