In Hong Kong, Mohammed al-Jasser, the head of the Saudi Arabian Monetary Authority affirmed that the US dollar’s role as the world’s reserve currency is coming to an end when he stated, “The dollar is still preeminent in its role as a reserve currency.” We should recall former US Federal Reserve Chairman Alan Blinder’s statement, “The last duty of a central banker is to tell the public the truth” (PBS’s Nightly Business Report, 1994) and thus be astute enough to realize that the often hollow words of Central Bankers serve as a contrary indicator of the truth.
When listening to a Central Banker speak, one should recall the infamous balcony scene from the classic Woody Allen film, Annie Hall (1977), as a case study for how to interpret “Central Banker speak”. In that infamous scene, though both Annie Hall (Diane Keaton) and Alvy Singer (Woody Allen) converse in English, subtitles appear in the film as they speak that reveal the true thoughts behind their hollow words. The subtitles comically reveal that Annie is insecure about her conversational skills while Woody is thinking about sex throughout the whole conversation, thoughts that betray the very words they speak. As history very frequently reveals Central Bankers’ words to be the exact opposite of their thoughts, all Central Banker’s public declarations should be accompanied with subtitles as well.
So here's my subtitled version of Mohammed al-Jasser's words:
Saudi Central Banker Mohammed al-Jasser: “The dollar is still preeminent in its role as a reserve currency.”
Subtitle: “Since we still predominantly accept US dollars for the sale of our oil and we know the US dollar is doomed, I will publicly tell the world that we support the dollar. Perhaps my words as an authoritative Central Banker can fool people into believing the dollar is a safe haven and perpetuate this already faltering US dollar bear market rally to provide us with adequate time to execute an exit strategy to dump our remaining petrodollars before the US dollar implodes.”
Those that are looking towards this latest US dollar bear rally as confirmation of a year-long uptrend for the US dollar in 2010 are likely to be hugely disappointed.