My Problem With Investment Newsletters

February 6, 2007 - There are a healthy number of analysts that argue against the continued devaluation of the dollar due to China’s enormous position of about U.S. $1 trillion of dollar denominated reserves. The argument being made in very simple terms goes like this: (1) All discussions about the dollar’s demise are false because if China believed that the dollar was going to weaken, why would it hold on to such a huge amount of dollar denominated reserves; and (2) China will continue buying and holding dollars because it makes their exports cheap, and in order to sustain the growth of their economy they must keep their exports cheap compared to American goods. Read more …

2 comments February 6th, 2007