In November 2001, the authorities again restructured the public debt, this time exchanging dollar denominated bonds for domestic guaranteed loans.

The public sector was at the time running a broadly balanced budget, although government expenditure was partly funded by short term dollar denominated bonds (tesobonos).

In neither scenario does it make sense to hold huge amounts of dollar denominated assets today. Therefore, foreign speculators should, any day now, dump their dollar denominated assets onto the market, and so bring about the dollar decline that they so fear.

While China s government should make greater efforts to rebalance the economy by conventional measures, it also should focus more attention on adjusting the currency structure of the country s gross assets and gross liabilities. In particular, China should try to replace its dollar denominated assets with renminbi denominated assets, and its renminbi denominated liabilities with dollar denominated liabilities.

Thus, while a significant proportion of expenditure is denominated in euros, some dollar expenditures remain.

Of course, an earlier attempt was made to create a commercial market in SDR denominated claims. Back in the 1970 s, there was some limited issuance of SDR denominated liabilities by commercial banks and SDR denominated bonds by corporations.

If foreign holders of dollar bonds become concerned that the unsustainability of America s situation will lead to higher interest rates and a weaker dollar, they will want to sell dollar bonds. If that feeling is widespread, the value of the dollar and the price of dollar bonds can both decline without any net change in the holding of these assets.

If rich country central banks can buy long term bonds, then emerging country central banks can buy dollar denominated bonds. Even countries that practice inflation targeting and have otherwise vowed to let their exchange rates float Brazil, Colombia, Peru, and Chile, for example have done it, and in large quantities.

The actual budget increase cannot be determined simply by noting a change in the dollar denominated amount.

The Japanese government has been able to sell its bonds to domestic buyers because of the high rate of domestic saving. The excess of saving over investment has given Japan a current account surplus, allowing the country to finance all of the government borrowing domestically, with enough left over to invest in dollar denominated bonds and other foreign securities.

For the first time ever, in 2004, the Inter American Development Bank issued bonds that are denominated in the currencies of the countries in the region.

Expanding local currency bond markets could expedite a shift from dollar denominated cross border loans to local currency loans, bringing benefits to both investors and borrowers.

In October, Rosneft issued 11 billion worth of ruble denominated bonds (an unparalleled amount for the Russian market, equivalent to 70 of the total value of corporate bonds issued in Russia this year). The coupon on these bonds was actually 1.5 percentage points below sovereign bonds of similar maturity, which is also unusual, especially given that Rosneft currently is subject to Western sanctions.

For the US, the fundamental cause of imbalances is not a strong dollar, but America s over consumption and over borrowing. A strengthening dollar would worsen the US trade balance, but a weakening dollar could cause panic in capital markets, which might push up risk premia on dollar denominated assets, including US government securities, in turn leading to an economic slowdown and a further weakening of the dollar.

If China is serious about elevating the SDR to reserve currency status, it should take steps to create a liquid market in SDR claims. It could issue its own SDR denominated bonds.

Second, China s foreign assets are denominated almost exclusively in US dollars, while its foreign liabilities are denominated mostly in renminbi. As a result, whenever the US dollar declines, China s net international investment position (the difference between its external financial assets and liabilities) deteriorates and so does its investment income balance.

For example, WIPO's budget is denominated in Swiss francs and UNIDO's regular budget is denominated in euros.

The external deficit of the United States is financed mainly by Central Banks that invest their foreign exchange reserves in dollar assets, for which euro denominated assets represent a serious alternative.

This fear of a stronger dollar is the real reason for concern, bordering on panic, in many emerging economies and at the IMF. A significant strengthening of the dollar would indeed cause serious problems for emerging economies where businesses and governments have taken on large dollar denominated debts and currency devaluation threatens to spin out of control.

The euro was expected to acquire an international role, eventually improving Europe s resilience in the face of economic shocks. There has been a surge in euro denominated international bonds, but the liquidity of foreign exchange markets is no higher for the euro compared to the national currencies it replaced, and the euro remains a long way from challenging the supremacy of the dollar.

In January 2005, the Argentine Government presented bond holders with a new debt restructuring deal, involving 152 bonds denominated in six different currencies amounting to roughly 82 billion and subject to eight legal jurisdictions.

Expenditures for staff costs and maintenance of the premises mainly denominated in euros have been translated into United States dollars in April 2002 at an average euro to dollar exchange rate of 0,8636.

Moreover, foreign investors remain reluctant to borrow from Chinese banks in renminbi, or to issue renminbi denominated bonds in Shanghai. That will remain true as long as they fear continued outside political pressure to appreciate.

But foreign currency speculators and international investors are not looking forward to either of these scenarios. They continue to hold very large positions in dollar denominated assets, which they would not do if they thought the US faced a choice between a cheap dollar and a deep depression.

Domestically oriented macroeconomists look at the situation roughly like this at some point in the future, foreign central banks will become less willing to continue buying massive amounts of dollar denominated securities in order to prop up the greenback. When they cease their large scale dollar purchase programs, the value of the dollar will fall and it will fall hard.

Development related investments accounted for 12 per cent of the Fund apos s assets at book value, with about 43.8 per cent of these holdings denominated in currencies other than the United States dollar.

Jamaica, for example, would issue aluminum bonds Nigeria would issue oil bonds Sierra Leone would issue iron ore bonds and Mongolia would issue copper bonds. Investors would be able to buy Guatemala s coffee bonds, Côte d Ivoire s cocoa bonds, Liberia s rubber bonds, Mali s cotton bonds, and Ghana s gold bonds.

Sierra Leone would issue iron ore bonds and Mongolia would issue copper bonds. Investors would be able to buy Guatemala s coffee bonds, Côte d Ivoire s cocoa bonds, Liberia s rubber bonds, Mali s cotton bonds, and Ghana s gold bonds.

If they perceive that the dollar and dollar bonds have become riskier, they will want to change the distribution of assets in their portfolios. So, even if the dollar is still regarded as the safest of assets, the demand for dollars will decline if its relative safety is seen to have declined.

Now, Sylvia Browne is an exception, an exception in one way, because the James Randi Educational Foundation, my foundation, offers a one million dollar prize in negotiable bonds.

Select the currency in which this account is denominated.

But perhaps the strongest message is being sent via targeted sanctions on Russia s oil, finance, defense, and technology industries, as well as on Russian officials. With this approach, the US and its allies are sending a clear message to anyone who may disagree with US policy avoid using the dollar and dollar denominated bank accounts.

Renminbi denominated government bonds were issued in London, and plans were laid to create new trading platforms for the currency in several European financial centers. And Chinese policymakers made it abundantly clear how unhappy they would be with a negative decision.

The policy of making an allowance of 10 per cent of non United States dollar denominated outstanding accounts receivable as at 31 December as a provision for delays in the collection thereof, is discontinued effective 31 December 2003.

Acquisition security rights include those that are denominated as security rights, as well as those that are denominated as retention of title, arrangements and financial leases.

Bonds

We didn't detach any bonds or reattach any bonds.

LONDON Ten years on, the euro is a resounding success. A financial market heavyweight, it now outperforms the dollar, the yen, and, until recently, the mighty Chinese yuan, while euro denominated bond trading rivals the US market in size.

Expenditures and the resulting changes shown in the fund balances of these accounts are due solely to the revaluation at current rates of exchange of the outstanding claims that are denominated in currencies other than the United States dollar.

In 1988 the Governing Body recommended and the International Labour Conference subsequently approved the adoption of a system of assessments denominated in Swiss francs combined with the forward purchase of the United States dollar expenditure requirements of the budget.

b Total public debt denominated in pesos and foreign currency.

During the 1997 1998 Asian financial crisis, East Asia s economies paid heavily for excessive accumulation of dollar denominated debts. Because governments failed to defend their currencies, they lost hundreds of billions of dollars in foreign exchange reserves to international speculators.

Performance bonds

Confederate bonds.

With rebalancing will come a decline in China s surplus saving, much slower accumulation of foreign exchange reserves, and a concomitant reduction in its seemingly voracious demand for dollar denominated assets. Curtailing purchases of US Treasuries is a perfectly logical outgrowth of this process.