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A new liquidity crisis looming. Could a declining USD spark a currency crisis? (update 1)

Posted by Adrian on November 30, 2007

As discussed on morbius glass with The decline of the USD. Will Saudi Arabia unpeg their Riyal (SAR) currency from the USD?, A new liquidity crisis looming. Could a declining USD spark a currency crisis? and Federal Reserve cuts 25 basis points, dropping the US interest rate to 4.50% – October 2007. I discussed the worrying problem of a declining USD. The Federal Reserve has indicated, courtesy of Paulson and Bernanke, that there is most likely a Fed cut coming in December 2007 that will exasperate the eventual collapse of the USD.

Gary Dorsch a contributor to the website Financial Sense. Has written a clear and objective piece of the extremely worrying aspect of the coming Fed rate cut decision and the fact that Iran and Venezuela hold so much more leverage (oil) than Washington would like to believe. Also the threat of Middle Eastern countries un-pegging their currencies from the USD and dumping the USD as a currency to trade with.

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2 Responses to “A new liquidity crisis looming. Could a declining USD spark a currency crisis? (update 1)”

  1. […] the currency crisis. As summarized last on morbius glass in ‘A new liquidity crisis looming. Could a declining USD spark a currency crisis? (update 1)&#82… ; with commodity prices booming (thanks to a dying USD) – will the commodity produces want to get […]

  2. […] I posted in morbius glass in 2007 about the potential for the USD to be de-pegged from certain curre…. So I think we are going to see the US dollar peg disappear very soon, opting for the stronger EUR. We may see a huge decline on the USD in the next quarter; with the Fed clearly losing control of inflation in the US. […]

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