Word: dollarization
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...held by money managers). And while by no accounts does it dictate the airline's strategy, the government aids SIA in many ways. Tax breaks on the carrier's aircraft help SIA maintain one of the youngest fleets of any major airline. The government helpfully paid the multibillion-dollar construction cost of Singapore's impressive Changi Airport, the airline's hub since 1981 and one of the best airports in the world...
...there are deeper reasons to fear a persistently weak dollar. For decades, various emerging markets in Asia and the Middle East have either officially or unofficially matched their currency rates to the dollar to limit their own currency fluctuations and thus stimulate trade. Since these countries tend to be exporters, they have also historically generated buckets of surplus dollars, which they funneled into U.S. Treasury bills, attracted by the dollar's long-term stability. This arrangement benefited the U.S., providing it with a bountiful source of buyers willing to fund its debts, despite the relatively low interest rates on offer...
...economy seemed poised to weather the U.S. sub-prime crisis with relative aplomb. But, suddenly, something approaching panic has gripped the world's financial community. The headlines are grim. The U.S. housing slump is worsening. Banking giants such as Merrill Lynch and Citigroup are posting record losses. The U.S. dollar is getting pounded by the British pound - and virtually every other currency. Oil has run up as high as $98 per bbl., and gold - the traditional doomsday investment - has topped $800, its highest level since the early 1980s...
Such doubts are fueling a broader loss of faith in U.S. assets. Nowhere is this more pronounced than in the dollar's stunning decline. Since the start of 2006, it has plunged 24% against the euro and 18% against the British pound. But how big a problem is a weak dollar, and for whom? It might pain U.S. tourists shopping in cities like London or Paris. And it's a mounting worry for European and Asian manufacturers doing battle with U.S. exporters, whose products are made cheaper on the global market by a dwindling dollar. But for these U.S. manufacturers...
China, Japan and others welcome the chance to scale back their U.S. holdings, but even the hint of a sale could send the dollar tumbling - as happened earlier this month when a Chinese official suggested China might shift some of its currency reserves to offset the "weak" dollar. The notion that the days of the dollar's dominance are numbered is, in fact, increasingly popular. In September, Alan Greenspan, former chief of the U.S. Federal Reserve, said it's "absolutely conceivable that the euro will replace the dollar as [the] reserve currency, or will be traded as an equally important...