Sunday, 8 November 2009

The US dollar, is it really weak

Recently the Chinese government increased their gold reserves up to 1,054 tons or 76% of their reserved currency.

The CBGA (Central Bank Governors Agreement) suggested that each country's central bank should maintain 15% of their cash reserves in gold.

Gold is, now , being accepted as a benchmark to measure the US inflation instead of crude oil. Please see the following figure and decide if the dollar is fundamentally weak.

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