Dollar's share in foreign exchange reserves

In this article, You can understand the long-term dollar's confidence decline and the reduction of
 dollars share in world foreign exchange reserves on the basis of  IMF and Federal Reserve Bank of St. Louis's announcement.
(Reference is in the end of this article.)

Please check the following chart.

The first following chart draw the annual dollar's share in world foreign exchange reserves from 1995.
The second following chart draw it quarterly from 1999.

The share of dollar in world foreign exchange reserves has reduced in the long term.
 
The share appeared to be bottoming out in Q2 2011.  However, after all, it is the merely temporal dead cat bounce .
 
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Decline of the US dollar index

Then, Let's try to compare the change of the dollar index and the dollar's share in world foreign exchange reserves. Both values are bottoming  out in 2011. 

If you look at only the chart from 2000,  you might think it looks like the bottom and the upward trend is ongoing. 
However, You should not forget to capture the change of long-term span.
 
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Let's see the following chart drawn from 1973 (the start year of dollar index). 

40 year's chart has formed a completely downward trend line. Falling trend is ongoing. If you look at in 40 years span, the dollar index has not recovered.

d3


















The following chart is a graph chart in comparison with changes in the gold price.
Axis of the dollar index is in the upside-down in order to compare easily.

Technically speaking, the dollars Index will return to the opposite trend from here because it is supported by the support line.

What happened after the peak of dollar index in the past?. Gold price has increased significantly.

(Gold prices is  yellow line and right axis , the dollar index is blue line and left axis)
080702

















Government debt continue to increase

I think the bounce of  Dollars Index will complete soon and gold price will rise in the future. 

The confidence to dollar is shaken. In this background, there is a twin deficit of the United States. By a large trade deficit and a government debt, the value of the dollar has been steadily diluted.

The following graph draws the transition of the dollar index and the U.S. government debt to GDP. 
The axis of Government debt to GDP is reversing as for easy comparison.

Government debt continues to grow over the past 40 years.
Depending on the increase of government debt, the dollar index also decreased. 

Especially, government debt has increased significantly in the collapse of Lehman Brothers shock, 2008.

(Government debt is yellow line and right axis , the dollar index is blue line and left axis)
0807



















Then, I compare the transition of government debt and the gold price. Gold price  increased significantly along with the government debt growth. This trend will not change in the future.

080703

















At the end

Up to this point, you confirmed important resources. There are US dollars share in world foreign exchange reserves, dollar index, US government debt and gold prices.

Over the long term, every time the US hegemony and the value of US dollar were reduced, the gold price has been inflated.

And now, I guess we are just facing to the US bubble collapse again.
 
This time, We are standing just before the dawn.
 
Gold price will explode soon after collapse of US economy.



References

Shares of U.S. dollars in total Reserves excluding Gold (Annual)

(Percent)
1995 59.0
1996 62.0
1997 65.1
1998 69.3
1999 71.0
2000 71.1
2001 71.5
2002 66.5
2003 65.4
2004 65.5
2005 66.5
2006 65.1
2007 63.9
2008 63.8
2009 62.0
2010 61.8
2011 62.3
2012 61.3
2013 61.0
2014 63.1
 

Shares of U.S. dollars in total Reserves excluding Gold (Quarterly)

(Percent)
1999Q1 71.2
1999Q2 72.1
1999Q3 70.7
1999Q4 71.0
2000Q1 71.5
2000Q2 72.0
2000Q3 72.3
2000Q4 71.1
2001Q1 72.3
2001Q2 72.7
2001Q3 71.4
2001Q4 71.5
2002Q1 71.6
2002Q2 68.5
2002Q3 67.5
2002Q4 66.5
2003Q1 66.4
2003Q2 66.2
2003Q3 66.7
2003Q4 65.4
2004Q1 67.1
2004Q2 67.4
2004Q3 66.9
2004Q4 65.5
2005Q1 65.1
2005Q2 65.8
2005Q3 66.1
2005Q4 66.5
2006Q1 66.2
2006Q2 65.7
2006Q3 66.1
2006Q4 65.1
2007Q1 65.1
2007Q2 64.9
2007Q3 63.9
2007Q4 63.9
2008Q1 62.9
2008Q2 62.6
2008Q3 64.2
2008Q4 63.8
2009Q1 65.2
2009Q2 62.8
2009Q3 61.5
2009Q4 62.0
2010Q1 61.7
2010Q2 62.5
2010Q3 61.6
2010Q4 61.8
2011Q1 61.0
2011Q2 60.5
2011Q3 61.6
2011Q4 62.3
2012Q1 61.5
2012Q2 61.5
2012Q3 61.2
2012Q4 61.3
2013Q1 61.8
2013Q2 61.8
2013Q3 61.4
2013Q4 61.0
2014Q1 60.8
2014Q2 60.8
2014Q3 62.5
2014Q4 63.1
2015Q1 64.1
 

Trade Weighted U.S. Dollar Index, Federal Debt: Total Public Debt, Gold Fixing Price  

Trade Weighted U.S. Dollar Index Total U.S. Public Debt (% of GDP) Gold Price
(U.S. $ per Troy Ounce)
1973-01-01 101 33 74
1973-04-01 97 32 104
1973-07-01 98 32 110
1973-10-01 102 32 100
1974-01-01 100 32 149
1974-04-01 101 31 163
1974-07-01 103 31 149
1974-10-01 101 31 174
1975-01-01 99 31 178
1975-04-01 101 32 167
1975-07-01 106 32 157
1975-10-01 106 33 142
1976-01-01 106 33 132
1976-04-01 107 33 127
1976-07-01 106 34 114
1976-10-01 107 34 127
1977-01-01 107 34 139
1977-04-01 106 33 145
1977-07-01 106 33 146
1977-10-01 101 33 161
1978-01-01 100 33 178
1978-04-01 97 32 179
1978-07-01 94 32 202
1978-10-01 93 32 214
1979-01-01 95 31 238
1979-04-01 95 31 259
1979-07-01 94 31 316
1979-10-01 96 31 413
1980-01-01 101 31 632
1980-04-01 93 31 545
1980-07-01 93 32 649
1980-10-01 96 31 629
1981-01-01 100 31 519
1981-04-01 108 31 479
1981-07-01 109 31 421
1981-10-01 105 31 421
1982-01-01 114 32 362
1982-04-01 119 32 333
1982-07-01 121 34 380
1982-10-01 116 35 427
1983-01-01 119 36 463
1983-04-01 120 37 427
1983-07-01 122 37 417
1983-10-01 123 37 388
1984-01-01 122 37 384
1984-04-01 128 38 379
1984-07-01 135 38 346
1984-10-01 138 40 335
1985-01-01 138 40 302
1985-04-01 136 41 319
1985-07-01 126 41 323
1985-10-01 120 44 325
1986-01-01 114 44 344
1986-04-01 109 45 342
1986-07-01 105 46 381
1986-10-01 104 47 405
1987-01-01 97 47 406
1987-04-01 98 48 450
1987-07-01 98 48 457
1987-10-01 87 48 474
1988-01-01 88 49 454
1988-04-01 93 49 452
1988-07-01 94 49 427
1988-10-01 89 50 415
1989-01-01 93 50 394
1989-04-01 98 50 374
1989-07-01 95 50 367
1989-10-01 92 51 389
1990-01-01 94 52 406
1990-04-01 92 53 365
1990-07-01 87 54 382
1990-10-01 85 56 381
1991-01-01 91 57 371
1991-04-01 93 58 360
1991-07-01 88 59 358
1991-10-01 84 61 360
1992-01-01 89 61 351
1992-04-01 85 61 339
1992-07-01 84 62 347
1992-10-01 91 62 338
1993-01-01 89 63 329
1993-04-01 89 64 361
1993-07-01 90 64 376
1993-10-01 92 64 374
1994-01-01 90 64 384
1994-04-01 87 64 382
1994-07-01 86 64 386
1994-10-01 87 64 385
1995-01-01 81 64 379
1995-04-01 81 65 388
1995-07-01 84 65 384
1995-10-01 85 64 385
1996-01-01 87 65 400
1996-04-01 88 64 390
1996-07-01 88 64 385
1996-10-01 88 64 376
1997-01-01 93 64 351
1997-04-01 93 63 343
1997-07-01 95 62 323
1997-10-01 98 63 307
1998-01-01 99 62 294
1998-04-01 100 62 300
1998-07-01 98 60 289
1998-10-01 95 60 294
1999-01-01 98 60 287
1999-04-01 100 59 273
1999-07-01 95 58 259
1999-10-01 96 58 296
2000-01-01 98 58 291
2000-04-01 100 55 280
2000-07-01 104 55 277
2000-10-01 103 54 269
2001-01-01 110 55 264
2001-04-01 110 54 268
2001-07-01 107 55 274
2001-10-01 111 56 279
2002-01-01 112 55 290
2002-04-01 102 56 313
2002-07-01 104 56 314
2002-10-01 100 58 323
2003-01-01 97 58 353
2003-04-01 92 59 347
2003-07-01 90 58 363
2003-10-01 85 59 392
2004-01-01 85 59 408
2004-04-01 87 60 394
2004-07-01 85 60 401
2004-10-01 79 60 434
2005-01-01 82 61 427
2005-04-01 85 60 428
2005-07-01 84 60 440
2005-10-01 86 61 485
2006-01-01 85 61 554
2006-04-01 81 61 629
2006-07-01 82 61 622
2006-10-01 82 62 614
2007-01-01 81 62 650
2007-04-01 79 61 668
2007-07-01 75 62 679
2007-10-01 73 63 788
2008-01-01 70 64 926
2008-04-01 71 64 897
2008-07-01 76 68 871
2008-10-01 80 74 798
2009-01-01 83 77 908
2009-04-01 78 81 923
2009-07-01 74 83 960
2009-10-01 74 85 1101
2010-01-01 75 87 1111
2010-04-01 79 89 1196
2010-07-01 74 90 1227
2010-10-01 73 92 1370
2011-01-01 70 94 1387
2011-04-01 69 93 1507
2011-07-01 73 95 1705
2011-10-01 73 96 1687
2012-01-01 73 98 1691
2012-04-01 74 98 1609
2012-07-01 73 99 1651
2012-10-01 74 101 1721
2013-01-01 76 102 1633
2013-04-01 78 101 1416
2013-07-01 75 100 1325
2013-10-01 76 101 1273
2014-01-01 77 104 1292
2014-04-01 76 102 1288
2014-07-01 81 102 1284
2014-10-01 85 103 1201
2015-01-01 92 103 1220
2015-04-01 90 1192

IMF eLibrary DATA

http://data.imf.org/?sk=E6A5F467-C14B-4AA8-9F6D-5A09EC4E62A4&sId=1408202905739

Federal Reserve Bank of ST. Louis.

https://research.stlouisfed.org/