May 05, 2008

USD reserve currency shift -- some numbers

Some figures on the decline of the dollar as reserve currency:

  • emerging-market countries shrank their dollar holdings from 71% (1997) to 61% (2007), while growing their foreign exchange holdings over fourfold.
  • the euro component of emerging market reserves grew from 19% (2000) to 28% (4th Q 2007).
  • Japan's exports are now often invoiced in Yen: 34% (2001) to 40% (now). Back in 1971 it was almost all in dollars.
  • dollars held outside the US: from 1.83% (2002) down to 1.22% (2006), as measured in percentage of world trade.

For the Americans, this is the maths behind the current too-good-too-bad economy in the USA. For the economists, it is interesting because the monetary tool is not helpful when all these dollars flood back unwanted. For the financial cryptographers, it's a great time to be in the currency business. For the gold community, it's their decade!

Note that we have predicted this for some time, but these are fundamental shifts and they move so slowly that any discussion is fraught until the numbers come in.

2003, 2004, 2006, 2006

Posted by iang at May 5, 2008 10:48 AM | TrackBack

See the statistics on derivatives.. . like, $516 Trillion outstanding value,

Posted by: Todd at May 5, 2008 02:29 PM
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