Thursday, 11 June 2009

Less dependency on US dollar as reserve currency is to be welcomed

The diversification away from dollar denominated holdings by foreign central banks, as being implemented now by Russia and Brazil (with China surely to follow) is actually to be welcomed.

It will help to move the global financial system away from its current predicament which is that there is a single point of failure - the US Treasury market - in a highly interconnected system.

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