Barack Obama may have finally destroyed America’s #1 advantage

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In July 1944, just weeks after the successful Allied invasion of Normandy, hundreds of delegates from around the world gathered in Bretton Woods, New Hampshire to determine the future of the global financial system.

The vision was simple: America would be the center of the universe, and every other nation would revolve around the US.

This arrangement ultimately led to the US dollar being the world’s dominant reserve currency which still remains today. Continue reading

China cuts US debt holdings amid Fed taper

China reduced its holdings of US Treasury debt in December by the most in two years as the Federal Reserve announced plans to slow asset purchases.

US government bonds held by China – the biggest US creditor – fell by US$47.8 billion, or 3.6 per cent, to US$1.27 trillion, the largest decline since December 2011, Department of the Treasury data released on Tuesday shows. At the same time, international investors increased holdings by 1.4 per cent, or US$78 billion, in December, pushing foreign holdings to a record US$5.79 trillion. Continue reading