That’s Gonna Hurt
Tehran has reached a decision to end all oil sales in dollars, according to statements by Iran’s central bank governor, Ehrabhim Sheibany, in Kuala Lumpur at the end of last month.
– add that to other information noted in the article
Meanwhile, China which now holds $1 trillion in foreign reserve holdings, announced March 20 it will no longer accumulate foreign exchange reserves.
This is more bad news for the dollar, since approximately 70 percent of China’s $1 trillion in foreign reserve holdings are held in U.S. dollar assets.
About half of China’s foreign exchange U.S. assets are invested in U.S. treasuries, which are vital to financing the continuing U.S. federal budget deficits.
Dollar Extends Drop Versus Euro After Foreign Investment Falls
April 16 (Bloomberg) — The dollar extended its drop against the euro after a government report showed foreign investment in U.S. securities fell in February more than economists forecast.
[via to herd or not to herd]
Interesting. If nothing else it should address the US trade balance problem, particularly with China.
For some reason I can’t help myself from thinking of the Doors…”This is the end…”
I remember reading an interesting article a while back that detailed how Saddam Hussein was threatening to quit selling in dollars and convert to the Euro.
If I were Harper (or maybe some a bit less regressive perhaps) I would begin travelling to India, South Korea, Japan, Europe, and anywhere else that might begin to import what we are about to lose in exports to the U.S.
I have read that is is one of the “doomsday”scenarios that keep Wall Street types up at night. If this spreads to the rest of OPEC, the U.S. and by extension us are in deep doo doo.