Euro Selling Has Stopped

The new numbers of the Currency Composition of Official Foreign Exchange Reserves (COFER) have been released and it shows that the the world has stopped selling euros (Table 1). Claims in euros have increased from $US 1.413 trillion to $US 1.423 trillion, an increase of 0.7%. Claims in U.S. dollars have increased from $US 3.513 trillion to $US 3.548 trillion, an increase of 1%. Interestingly, the increase in U.S. dollar claims is flattening out as compared to previous quarters, indicating U.S. dollar weakness.

In the previous three quarters, the claims in euros had been going down ($US 1.472 in Q2 2011 to $US 1.438 in Q3 2011 to $US 1.413 in Q4 2011). But that decline has stopped for now. I believe this reversal means that it’s time to start buying into the euro again in the short term.

Table 1: Currency Composition of FOREX Reserves

To read the full analysis, go HERE.

USD is losing reserve currency status

It is apparent in the timeline below that the whole world is trying to back away from the “reserve currency” of today: the US Dollar. More and more political games are going to be played and this will eventually result in the Great War of our century (as Gerald Celente calls it). It all started in end 2010 but the games are accelerating. If you pay attention to the countries involved, you will see that Asia itself is trying to create an Asian reserve currency.

Here’s what is happening:

• 24 November 2010: Russia and China want to back away from the USD to lessen their dependencies on the US dollar. They will try using their own currencies for settlement.

• 24 July 2011: China wants to export their goods to Iran in exchange for oil. Thereby bypassing the USD and US financial sanctions. (that is also why USA is trying to go to war with Iran, just to make it more difficult for the Chinese)

• 25 December 2011: China and Japan promote direct trading in yuan and yen to reduce costs of USD currency interchange. Japan buys Chinese government bonds (instead of US government bonds).

• 29 December 2011: India comes to play and wants to strenghthen bilateral trade with Japan. Thereby boosting the rupee. Japan will invest in Indian infrastructure projects.

• 07 January 2012: Dmitri Medvedev proposes Iran and Russia to drop the USD and buy the rial and ruble in bilateral trade. Thereby ignoring U.N. sanctions imposed on trade with Iran.

• 20 January 2012: India starts paying Iran for oil in rupees, ignoring U.N. sanctions imposed on trade with Iran. India is relying heavily on Iran’s oil.

USD is losing reserve currency status