This past month has been a pretty hard time for US Dollar, it has lost a lot of value against gold and EURO, and that is why the Oil is so expensive these days nearly $95, People already stop buying US bonds usually they were buying $97 billions and now only $19 billions WHAT A DEFICIT!!! this is a very very bad situation for a country that get use to live beyond they can, and now the situation is getting worse some 6 countries are taking steps to drop Dollar:
Saudi Arabia, closest US oil provider, is taking measure to avoid any recession like in the US so they are not going to cut interest rate, this country has $800 billion on US Bonds if they start selling them it would begin a massive stampede to do the same.
South Korea, they have plans to diversify their invests outside since 2005, but now they are getting ready to shift from Dollar, cuz that currency lot value agains oil, Euro and against their own money, so plans of selling $1 billion in US bonds are very real now, on august 2007 they sold $100 million of US bonds. Asia alone has $2 trillion in US Securities and other invesment instruments.
CHINA, since they decided to drop the peg of Yuan with Dollar and decide that currency would be floating against other currencies, Yuan appreciate agains Dollar, but NUCLEAR OPTION against Dollar is still an option cuz USA want to put some trade sanctions agains them, so they use their huge amount of US bonds and instruments like a bargain chip.
RUSSIA, want to establish an alternative way for trading oil and commodities (not in dollars), since 2005 they decide to put more EUROS on the Money reserves and to put EURO Peg to Ruble.
IRAN, the most likely to abandon US DOLLAR, their first move to ask Japan to pay any Oil exports in euros, and also since 2006 they made the idea of an Oil bourse in their country to trade commodities (oil & Gas) in Euros. In October 2007 85% of their Oil sells where in other currencies (NO MORE DOLLARS)
VENEZUELA, the bad boy of Latin America, they start selling oil to 12 countries in the region in EUROS, also PDVSA invesment are now in Euros only no more Dollar, he stated some argument in OPEC on 2000 to stop using PETRODOLLAR and change to other currencies.
This 6 countries represent a lot of OIL WEALTH (except Korea), they are trying to protect their own interest and economy, so if they start droping US DOLLARS it would be a high impact on US Economy.
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