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KISS THE DOLLAR GOODBYE



Dollar facing 'power-shift': analysts
Oct 11 03:18 PM US/Eastern
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The dollar's position as the world's leading reserve currency faces increas...



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The dollar's position as the world's leading reserve currency faces increased pressure as the financial crisis allows emerging economies greater influence on the world stage, analysts said.

A report last week in The Independent claiming that China, Russia and Gulf States are among nations prepared to ditch the dollar for oil trades has heightened the uncertainty surrounding the US currency's future.

The dollar slumped against rivals last week in the wake of the British daily's controversial report.

"The US dollar is being hurt by the continued talk of a shift away from a dollar-centric world," said Kit Juckes, an analyst at currency traders ECU Group.

"Three conclusions stand out very clearly. Firstly, the shift in economic power away from the G7 economies is continuing. "Secondly, there is a growing acceptance amongst those winners that one consequence of this power shift will be to strengthen their currencies.

"And finally, as long as the US economy is not strong enough for any rise in interest rates to be conceivable for a long time, the dollar's underlying downtrend will remain in place," added Juckes.

The Independent, under the front-page headline "The Demise of the Dollar", reported last Tuesday that Gulf states, together with China, Russia, Japan and France, were considering replacing the dollar as the currency for oil deals.

"In the most profound financial change in recent Middle East history, Gulf Arabs are planning -- along with China, Russia, Japan and France -- to end dollar dealings for oil," wrote The Independent's Middle East correspondent Robert Fisk.

They would switch "to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar," added Fisk, citing Gulf Arab and Chinese banking sources.

It was getting weak under Bush due to his deficit spending and trying to get the debt financed. So don't tell me that by PURPOSELY quadrupling that debt will not collapse the dollar. The other countries NO longer will finance our debt because it's out of control. They know what their doing.