World Central Bank Warns Of Collapsing US Dollar

"The dollar clearly remains vulnerable to a sudden loss of private-sector confidence," the Basel, Switzerland-based BIS said in its 77th annual report today. "The reliability of public-sector inflows has also become more uncertain." Central banks may reduce purchases of dollars and allow their currencies to strengthen in a bid to curb inflation, the BIS said. They may also invest a greater proportion of new foreign-exchange reserves outside of the U.S. to earn higher returns, adding to the "threat" to the dollar, it said. . . . " . . . central banks in Asia . . .could slow down accumulation of reserves and let their currencies rise. Then the dollar will fall . . ." . . . The U.S. needs to attract about $2.1 billion a day [to borrow to pay its bills] . . . . . . The U.S. currency fell 0.6 percent to $1.3470 per euro in the past week. The dollar dropped to a record low of $1.3681 on April 27. The euro has climbed 2.1 percent against the dollar this year. . . . The Indian rupee has gained 8.6 percent against the dollar in 2007 . . . The Chinese yuan has climbed 2.4 percent so far this year . . . (And then, of course, there is the dear Canadian loonie, shining bright, and hopefully not to be dragged down too far by the dollar wreckage!) Here is the full article: Dollar 'Vulnerable' to Drop in Investment, BIS Says Bloomberg News, 24 June 2007 http://www.bloomberg.com/apps/news?pid=20601103&sid=aHlb_k7gVajg&refer=news [Proofreader's note: this article was edited for spelling and typos on June 26, 2007]

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