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Summer advocated that foreigners back away from buying US debt instruments (whose purchase requires them to hold dollars). In this morning's "The Daily Pfennig", Chuck Bulter had this to say:

"Our friends over at Lehman Brothers issued a report today that tells us that Central Banks around the world reduced their allocation of dollars in their reserves during the past year from a 72% average to 68%... That's a big jump... And I'm afraid that's just the beginning of the move away from a dollar denominated currency reserve by Central Banks, which will lead to reduced dollar assets held by institutions in those countries and so on...But, that's just me thinking aloud!"

As I said, there are lots of swirling currents to be detected and interpreted, but Summer's importance seems that of a scarecrow, not the market-mover his boss was, the former and beloved TreasSec, Robert Rubin.


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