Foreigners Pull the Plug on Dollar Recycling Program
Posted on: Sep 18th, 2008 | By Doug Casey | Filed under US Dollar & Forex Trading
Foreign buyers exited the market for U.S. dollar-denominated debt and securities when the credit crisis surfaced in August of 2007. And their return since is proving to be somewhat tentative, as revealed in the latest U.S. Treasury International Capital (TIC) report on capital flows. In July 2008, foreigners once again fled the scene, and were net sellers in U.S. capital markets to the tune of $25.6 billion.
The stability of U.S. credit markets relies on foreigners recycling their trade surpluses back into the U.S. economy by purchasing dollar-denominated IOUs. As large financial institutions continue to tumble, and the Fed turns on the printing press in an attempt to limit the damage, the flight to safety will mean a flight from the dollar and further trouble for U.S. markets.
The financial storm we’ve been forecasting is now hanging over Wall Street, but it’s not too late to tailor your investment portfolio to weather the storm. Providing a sound investment strategy during times of financial upheaval is part of the foundation of Casey Research and there’s no better way to keep in touch with the reality of the world we live in and how to invest accordingly than with the The Casey Report.
Source: Foreigners Pull the Plug on Dollar Recycling Program
Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.