Sovereign wealth funds bailing on the U.S. dollar....

[marmar]

from the Financial Times:



Sovereign funds cut exposure to weaker dollar
By Henny Sender in New York

Published: July 17 2008 03:00 | Last updated: July 17 2008 03:00

Some of the world's largest sovereign wealth funds are seeking to reduce their exposure to the US dollar in a sign of global concern about the currency.

One big sovereign fund in the Gulf has cut its dollar-denominated holdings from more than 80 per cent a year ago to less than 60 per cent, while China's State Administration of Foreign Exchange (SAFE) has been looking to strike deals with private equity firms in Europe as a part of a strategy to reduce its dollar holdings.


http://www.ft.com/cms/s/f3114836-539a-11dd-8dd2-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Ff3114836-539a-11dd-8dd2-000077b07658.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3Dsovereign%2Band%2Bfund%2Band%2Bdollar%26aje%3Dtrue%26dse%3D%26dsz%3D%26x%3D10%26y%3D10

[TexasObserver]

1. Yes, if the dollar declines continues, the market "gains" are illusions.

Only by comparing the US dollar to the EURO and the Canadian dollar can one really understand what the US markets have done the past five years. the 11K plus of the DOW right now is highly devalued from the 11K numbers during the latter part of the Clinton years.

The US dollar is worth less almost daily.

[dipsydoodle]

2. Rats

leaving a sinking ship,

[Arctic Dave]

3. Ouch. This can't be very good.

Maybe this is another reason for *'s reversal on Iran, nobody was going to fund him to blow up another country and destroy their economies too.

[no_hypocrisy]

4. Does that mean that China won't want to continue buying our debt?

[whistle]

5. I needed to look up an explaination for what sovereign wealth funds were and here...

...is what I found:

Sovereign wealth funds, as defined by the U.S. treasury (PDF), are government investment funds, funded by foreign currency reserves but managed separately from official currency reserves. Basically, they are pools of money governments invest for profit.

<MORE>

http://sovereignwealthfunds.wordpress.com/2008/01/22/what-is-a-sovereign-wealth-fund-a-working-definition/