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Petro Dollars Headed Back Into Us Dollar

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LONDON: Major oil exporting countries have placed a record $82 billion with international banks in the third quarter of 2005, acceding to the Bank for International Settlements.
This recycling has helped the dollar to gain strength, according to data by the bank. OPEC countries had shunned the dollar between 2001 and 2004 in the wake of 9/11 and on the fear that the dollar was overvalued. This trend had caused a slide in the value of the dollar.
Now, the bank says a steady rise in the interest rates in the U.S. has brought the OPEC customers back to the dollar.
The bank's report revealed the share of OPEC petrodollars being placed in Britain fell to 25 per cent
in the third quarter compared with 35 percent in 1985. The U.K. banks' total liabilities to non-OPEC oil exporters rose to 35 per cent in the third quarter from 22 per cent in 2002.

This report suggests that the US $ is headed back up not just because of higher IR. Where does this leave Gordon? He will have to raise the rates in the face of the building economic recession or preside over another sterling crash. Or both. Can anyone hear the sound of escaping air?*


From the bubble that is :lol:

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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