Jim writes:
Anthony D'Costa wrote:
I am having difficulty in figuring this out: how rising oil prices and
the
falling dollar create millionaires in countries that have large net
imports
of oil and their dollar holdings is worth less in domestic currencies.
I
can understand this for Russia with massive new found oil revenues but
India
and China the wealth creation is due to something else, at least that's
what
I think.
you're generally right: the fall of the US$ doesn't help those rich
folks in countries whose currencies are fixed to the dollar (e.g.,
China) directly, while the rise in oil prices doesn't help those in
countries that import oil. But it might do so indirectly, since rich
folks often diversify out of their home country currencies and out of
assets in their home countries. (Often those two diversifications are
the same thing.)
==================================
Anthony makes a good point, but the comparisons were likely made in USD's,
so the yuan/rupee/real/ruble holdings would be inflated by devalued dollars.
I believe there are still serious limits on how much individual Chinese can
diversify overseas.
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