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July 5, 2009 / Jeb

China Promoting Dollar at G8,Selling the Dollar on Wall ST

It is quite comical the meetings at the G8 and how China is making bullish comments on the dollar right after taking a huge investment in Teck Cominco.  The reality is the Chinese government are making huge bets on mining companies.  It’s not only the Chinese but many Asian companies are diversifying away from the dollar and into natural resources.  They are also looking to manage risk and seek higher returns than treasuries and the dollar.

This is a highly sensitive issue as many governments are concerned of the risk of the dollar collapsing.  The G8 is trying its best to make a quiet movement away from the dollar without crashing the markets.

Although you may hear them making comments at the G8 that gets headlines, reality which is dictated by actions in the financial markets dictate otherwise.  We might see the dollar make a one or two day move on the news, but it is only temporary.  The dollar will not continue to be the world currency.  It is only a matter of time.  The world is coming back to a reality that the only time tested for centuries true currency is gold and natural resources.

Actions on the street speak louder than words at G8.

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