The dollar era is over

13Oct07

This is what Merril Lynch’s report says. Here are some predictions:

In the near term
– Inflows into “safe” sovereign assets will continue.
– The Middle East will dominate inflows into “riskier” assets

In the medium term
– A “massive shift” into riskier assets
– A shift out of government and into private sector assets
– A shift out of USD and into non-USD assets
– The centre of SWF gravity moving from the Middle East to Asia and Russia


“Merrill are saying there is going to be a long and slow decline for the dollar. And at the end of the third stage, a possible collapse. That “first mover” advantage is talking about a central bank firesale- which could have serious implications for the US economy.”

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