金融时报: 美元时代结束了, 逐渐崩溃, 央行清仓甩卖

rayfromsea

http://ftalphaville.ft.com/blog/ ... tral-bank-firesale/
The dollar era is over: a long, slow collapse and a central bank firesaleSovereign Wealth funds won’t take over the world, but their meteoric growth will have one sure effect: the dollar era is over.
According to a Merrill Lynch note to clients, we’re in the begginings of a global readjustment that will end the dollar’s dominance as the “gold standard” currency for the world’s economies. The dollar is likely entering a long, slow decline - followed by a crash.


What’s interesting is that Merrill draws explicit attention to the decline of the gold standard as an historical foil for the dollar’s outlook:

Following the demise of the gold standard, central banks only slowly moved to reduce the share of gold in their reserves. This process occurred in stages and placed downward pressure on gold prices through the diversification. From this we identify the phases involved and apply them to the USD.


The process, says Merrill, will occur in three stages. We’re entering the second.

Step one - denial
The first phase in the process of reserves diversification is almost over. The first step, we believe, was for central banks to deny that the process is occurring. A few years ago most central banks’ response to the question of diversification was to deny that there was a need to do so. Now, there are many central banks discussing the possibility of diversification and their desire to do so.


Step two - don’t sell, don’t buy
The second phase is for central bank reserve managers to diversify USD holdings in a relatively passive way. They do not actively buy as many USDs from incoming flows and do not sell existing stocks. Given US financing needs even this sort of passive diversification will put downward pressure on the USD.



Step 3 - first-mover advantage and co-operation
The final stage will be to diversify the existing stock of reserves outside of USDs. Given that many central banks have large USD holdings, any move to sell existing stocks will place sharp downward pressure on the dollar. As a signaling device this is an important stage. If it were known to the general market that central bank X were selling its USD holdings, other central banks would wish to sell before the dollar weakened. There is a distinct first mover advantage in this process.


In other words, Merrill identify a long and slow decline for the dollar. And at the end of the third stage, a possible collapse. That “first mover” advantage Merrill refer to is effectively a central bank firesale - which could have serious implications for the US economy. Merrill hints that one way to avoid that might be some kind of international treaty similar to the Washington Gold Agreement:

Washington Gold Agreement was implemented to provide a structure to central bank gold sales. This signaled a base in the price of gold. Similarly, we believe that central banks will ultimately come to some agreement on USD sales to limit the risk that USD selling becomes a downward spiral. Until this time the USD may be subject to periodic episodes of intense pressure and face an uphill struggle when cyclical influences would normally favor it.


Expect the whole process to be mired in acrimony - politicians are already making use of the dollar’s current travails as a stick to beat the government with, or else argue for more “patriotic” business measures. Add to this the notion that behemoth SWFs - whose strings are pulled from Beijing, the Kremlin or the Arabian Gulf - are behind US troubles, and there’s a huge political football waiting to BE kicked about. So how long might it be before Norway - with its $315bn SWF, the world’s second largest - joins the axis of evil? By Merrill’s reckoning, 5-10 years:

This process is likely to be a long-term dampener for the USD. The diversification out of gold took 20 years; the move out of USD-only based portfolios should be relatively shorter but still lengthy. It takes time to accommodate global agreements and co-ordination and then physically diversify the massive level of existing stocks. At best guess this should be a 5-10 year process.


So if you’re thinking of a holiday to the US, wait a bit - you’ll get a lot more bang for your buck. Why not visit Norway instead, while you still can?

This entry was posted by Sam Jones on Friday, October 12th, 2007 at 12:06 and is filed under Capital markets. Tagged with merrill lynch, SWF.



[ 本帖最后由 rayfromsea 于 2007-11-7 21:30 编辑 ]