Thanks Bush and Greenspan, great job. Next the peso will take over the dollar. Or is thi sby design?????AMERO??????


Euro displaces dollar in bond markets
By David Oakley and Gillian Tett in London

Published: January 14 2007 22:08 | Last updated: January 14 2007 22:08

The euro has displaced the US dollar as the world’s pre-eminent currency in international bond markets, having outstripped the dollar-denominated market for the second year in a row.

The data consolidate news last month that the value of euro notes in circulation had overtaken the dollar for the first time. Outstanding debt issued in the euro was worth the equivalent of $4,836bn at the end of 2006 compared with $3,892bn for the dollar, according to International Capital Market Association data.

Outstanding euro-denominated debt accounts for 45 per cent of the global market, compared with 37 per cent for the dollar. New issuance last year accounted for 49 per cent of the global total.

That represents a startling turnabout from the pattern seen in recent decades, when the US bond market dwarfed its European rival: as recently as 2002, outstanding euro-denominated issuance represented just 27 per cent of the global pie, compared with 51 per cent for the dollar.

The rising role of the euro comes amid growing issuance by debt-laden European governments. However, the main factor is a rise in euro-denominated issuance by companies and financial institutions.

One factor driving this is that European companies are moving away from their traditional reliance on bank loans – and embracing the capital markets to a greater degree.

Another is that the creation of the single currency in 1999 has permitted development of a deeper and more liquid market, consolidated by a growing eurozone.

This has made it more attractive for issuers around the world to raise funds in the euro market. And, more recently, the trend among some Asian and Middle Eastern countries to diversify their assets away from the dollar has further boosted this trend.

René Karsenti, executive president of ICMA, said: “It is the stable interest rates in Europe that have helped and the fact that [the euro] has strengthened and shown resilience.”

Since the start of 2003, the European Central Bank’s main interest rate has fluctuated only 1.5 percentage points, ranging from a low of 2 per cent in the middle of that year to 3.5 per cent, its rate today. Bush has erased everything my grandfathers fought for, how could you still like this guy???

In comparison, the Fed funds rate, the main US interest rate, has fluctuated 4.25 percentage points, ranging from 1 per cent in the middle of 2003 to 5.25 per cent, its level today. The euro has also risen to trade around $1.30 against the dollar, from around parity three years ago. Sterling issuance has grown in the past three years, reinforcing its attraction as a niche currency among some investors. The yen, in comparison, has fallen out of favour.

Overall, international capital markets have doubled in size in terms of bond issuance during the past six years.

Copyright The Financial Times Limited 2007


http://www.ft.com/cms/s/572b41a6-a41...0779e2340.html

Couldn't be because that Americans have a NEGATIVE savings rate, and the Country is living on credit cards, could it?

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How soon do we get our rebates, free health care, lower taxes, better schools, and cheap energy?

I say it is becuase we left the gold standard and now just print FIAT currency.

Or, maybe it could be things like the EPA, an incredible minimum wage, and tons of people enamored with foreign made goods. You know, all of those things also depreciate the value of the dollar.

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"If I didn't live in Ohio I would love to live in Texas, it's the only place where drinking beer and kickin' ass is still accepted." -Roman

And, every industrialized country prints fiat currency. If we didn't have a flexible currency we wouldn't be able to grow as an economy because money is a capital good, and strictly fixed, irreplacible capital goods means a fixed amount of production forever.

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"If I didn't live in Ohio I would love to live in Texas, it's the only place where drinking beer and kickin' ass is still accepted." -Roman

Maybe we should join the EU...

Yeah, I expected rates to continue to rise to bring back some value in the dolar, especially since fourth qrtr GDP was at 3.3% growth. This may be a bad time to buy a house. This is why I always talk about a fiscal g-ment overhaul, our spending is out of control in all areas. We're gonna have to make some drastic changes probably within the next decade or our economy is gonna be toasts by the 40's.

This has nothing to do with Bush, and EVERYTHING to do with the american insatiable appetite with credit and overspending.

Someone else on here said it best as well, our appetite with cheap, foreign made goodies....we are our own worst enemy!!

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"A committee is a group of people who individually can do nothing but together can decide that nothing can be done."
Fred Allen

"A government that robs Peter to pay Paul can always depend on the support of Paul."
George Bernard Shaw

"Politics is the art of choosing between the disastrous and the unpalatable."
John Galbraith

Unless you're poor like me, I would transfer my funds to Euros until the dollar collapses and is replaced with the Amero.

Even if for some crazy reason the dollar defies all laws of economic physics, I still believe one would fare better with the Euro in the coming couple of years.

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FREE THE SHEEPLE!

And americans don't save.

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"A committee is a group of people who individually can do nothing but together can decide that nothing can be done."
Fred Allen

"A government that robs Peter to pay Paul can always depend on the support of Paul."
George Bernard Shaw

"Politics is the art of choosing between the disastrous and the unpalatable."
John Galbraith