Foreign countries are not only talking about diversifying out of US dollars, but they are actually doing it.
Why should we care? Inflation and higher taxes to pay the higher interest on the federal debt. Lots of inflation as the Federal Reserve has to print money to buy the Treasury debt that the foreigners are not buying. If the dollar does fall a lot more, big profits can be made by putting some cash now into gold, euros, swiss francs, or the British pound, and then converting the money back when needed after the dollar falls lower.
As the dollar falls, the price of oil will keep rising, and the cost of most goods will rise.
Any other comments about the falling dollar?
Oil Producers Shun Dollar
“Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements. The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency. ”
Iran Okays Replacement of US Dollar with Euros
“In case the West pulls through with its planned economic sanctions on Iran, Tamaddon said the country would still have access to its monetary accounts based on the euro.
Iran’s minister of finance announced last week that the government had decided to replace the US dollar with the euro in its international transactions.
He said that the move was in response to the Bush administration’s hostile policies towards Iran. “
