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"In times of stress big money runs to the US$ for safety and other currencies / gold get clobbered."
My comment:
There's already been a reply about the need to get US dollars for this.
Sydneysider, haven't you yet worked out why Lehmans was allowed to go bust? The US dollar was crashing in July, gold and commodities were running hot. The US economy was cactus and interest rates needed to dramatically fall.
Now how could this be done without obliterating the US dollar and sending gold on its next leg up way over US$1000?
Very simple. By letting Lehmans go bust it set off derivatives spot fires everywhere. Leveraged hedge funds were then punished for correctly investing in commodities and became forced sellers. This had a snow balling effect, smashed commodities worse than in the Great Depression and sent the US dollar soaring.
No matter how terrible the US economic and financial news was, because of this deleveraging there was an unprecedented demand for US dollars. And so US interest rates could be cut to zero without at the time destroying the US dollar.
But how many people have been hurt by this carefully concoted plan? Never mind. Just collateral damage.
It's only a matter of time before the US dollar trades according to its fundamentals. Its fundamentals are that of a country that is so far in debt and getting worse in debt that some believe it is in reality insolvent. (PS. Have you noticed the US States now calling for bail outs just to keep operating?)
