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People's Daily Online>>Opinion

US dollar is just a dirty shirt

By Zi Mo (People's Daily Overseas Edition)

10:31, January 13, 2012

Edited and translated by People's Daily Online

Pacific Investment Management Company’s Bill Gross, an influential figure in the U.S. financial industry, recently advised investors to buy U.S Treasury securities, and cautioned them to stay away from the euro.

However, businesspeople seeking to make money never reveal their money-making secrets.

Gross manages Pacific Investment Management Company’s 240-billion-U.S.-dollar Total Return Fund, the largest bond fund in the world. Without investors’ knowledge, he eliminated the fund’s holdings of Treasuries last year, when others were queuing up to buy Treasuries.

Gross recently claimed the U.S. dollar is the “cleanest dirty shirt.” His view is correct. However, it should be noted that as a fund manager, Gross is good at buying low and selling high. Fund managers often take advantage of their information resources to first drive down the price of a security and buy it, and then to drive up its price and make a profit from selling it.

Both the euro and U.S. dollar used to serve as safe havens. However, the euro is now in deep crisis due to the euro area’s debt problems, and Treasury bonds are not necessarily risk-free.

Columnists of the U.K. Financial Times are still saying ironically that Washington has nothing to do with wisdom. But, from a series of market and governmental measures currently adopted by Washington, it could be seen that Washington is quite wise and intelligent: the U.S. government still raised the debt ceiling after the confrontation between the two parties and will raise it once again in Jan. 14. Although the Republican Party showed a tough stance, it showed it only for outsiders.

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Leave your comment6 comments

  1. Name

Heinz Stiller at 2012-01-16188.60.9.*
The dollar is still the world"s leading currency. But imagine for a moment, this would no longer be the case? Already, the eurozone"s economic numbers suggest, at least in part, that it is, all in all, a bigger economic actor in the world than the US. And much more important to Chinese trade, anyway. If the dollar"s privileged role would end, this currency would not have this extra-surplus demand that keeps it relatively high and US government bond rates ridiculously low. This would be a desaster not only for the US budget, but to US political hegemony as a whole. So the US are trying by covert means, e.g., by using the rating agencies, to keep rivalling currencies at bay. When the yuan will become convertible, China will face the same kind of covert economic attacks by the US as the eurozone is experiencing now.
PD User at 2012-01-1576.124.224.*
Not only dirty, they use it also to kill people
Stick Mann at 2012-01-14166.147.116.*
Every government will faced difficult choices in the coming year. Collectively everyone needs to promote harmony and responsibility. Greed and aggression will only doom everyone to pain and suffering
wende at 2012-01-1371.255.83.*
Never believe in the US traders. They will bring disaster to China's banking industries as they did in the US and in Europe. Why do you think the world's finance is in such a mess? You know the answer.
caodacheng at 2012-01-13116.53.227.*
yes,we had better take it off.

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