7 Countries Considering Abandoning the US Dollar (and what it means)

http://www.currencytrading.net/2007/7-countries-considering-abandoning-the-us-dollar-and-what-it-means/


It’s no secret that the dollar is on a downward spiral. Its value is dropping, and the Fed isn’t doing a whole lot to change that. As a result, a number of countries are considering a shift away from the dollar to preserve their assets. These are seven of the countries currently considering a move from the dollar, and how they’ll have an effect on its value and the US economy.

-snip holds the 7 countrie's whys and wherefores - Saudia Arabis, South Korea, China, Venezuela, Sudan, Iran, Russia-

What does this all mean?

Countries are growing weary of losing money on the falling dollar. Many of them want to protect their financial interests, and a number of them want to end the US oversight that comes with using the dollar. Although it’s not clear how many of these countries will actually follow through on an abandonment of the dollar, it is clear that its status as a world currency is in trouble.

Obviously, an abandonment of the dollar is bad news for the currency. Simply put, as demand lessens, its value drops. Additionally, the revenue generated from the use of the dollar will be sorely missed if it’s lost. The dollar’s status as a cheaply-produced US export is a vital part of our economy. Losing this status could rock the financial lives of both Americans and the worldwide economy.
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reading the reasons of each country for dumping the dollar will set your hair on end

unf*ingbelievable!

It's an old story: David slays Goliath.

There has been ample warning and yet our "leadership" has not taken heed. Naturally they've taken care of themselves first...

the neo cons

congress and voting won't do it

And I hate to say this, but I agree with you.

I feel like I'm on a sinking ship and many of the fu*king people around me won't believe it until their feet are wet.

where neocons and fundie xtians have little power.

"I mean, you can skip right over the fact that there were absolutely NO people from Iraq, Iran, or Afghanistan who attacked America on 9/11, and that almost all of the Terra-rists were Saudi. That's not important. Saudis are, like, um, totally with the whole Occult Cabal THANG that we republicon homelanders are into, and that's good enough for me. I love 'em. And you know, you are either with me or against me (my republicon homelander fascist goons will be monitoring, so be sure and say something SWEET about me if you feel the urge to post in this thread)."

- Commander AWOL

which is why Wall Street hasn't been reacting as expected, by rallying when the rates are cut. Everybody knows Bernanke is sitting around with his thumbs up his ass not knowing what the hell to do next and that it will never occur to anybody in the GOP or Wall Street branch of the Dems what it will take to get the economy back to health.

What worked 15 years ago is not going to work now, to put things bluntly. What worked 15 years ago will make things far worse now. If they keep doing this, it will finally cause China to let the Yuan float, and that will throw this country into a very deep recession---if we're lucky.

certainly am no economist but I was wondering the other day if something like this would have more effect. Fortunately, my wife an I are in pretty good shape but the economy and times out there are not good for many.

I was wondering if the credit card companies instead of raising the rates on those that are late or miss a payment would cut their interest for a grace period at least and work with them through the necessary period of time.

Banks & mortgage companies instead of throwing the people out on the street, the same, work with them and they would have someone living in the home taking care of it instead of it sitting empty and going down hill.

Now I realize there are some you cannot work with so I am allowing that they would make that determination of those who are not trying.

The CEOs and CFOs that caused this totally screwed up mess, take a good size pay cut until they get their companies back on foot again instead of laying off the employees who did not cause the problem in the first place.

Just a thought.

that one can't get blood from a rock. So stop trying, ya greedy bastards!

A lot of people will be thrown out of their homes. CEOs and CFOs will take the money and run rather than take pay cuts. They will attempt to ride it all out, but being greedy bastards from the get go, will probably lose much of what they stole in high yield/high risk investments.

Eventually, the new crop of CEOs and CFOs will do just what you say, along with renting houses they foreclose on, keeping the foreclosed people in their homes until the market finally turns around to the point that all the surplus property can be put up for sale again. That cuts their carrying costs while making the foreclosed houses less attractive to vagrants, vandalism and vermin.

After experimenting with ridiculously usurious interest rates and steeply hiked minimum payments on credit card debt, a new crop of CFOs will realize they can't get blood from stones and cut those rates and payments accordingly, while freezing the debt at its present level.

Empoloyees will be laid off, period, because the guys at the top will not consider pay cuts. They will have to be replaced by cheaper executives. In any case, a steep recession combined with frozen credit will decrease demand for goods and services to the point that it will feed a great deal of unemployment.

Remember, demand is what creates employment, not supply. Until we return to demand side economics, we are in for a very rough ride in this country.

No Pubs & sorry to say, few Dems recognize that, at least in recent times, the Pubs screwup the economy, drastically increase the Nat'l Debt, and cut taxes on the rich to the bone, then the Dems get elected to fix the mess. They have no other option but to raise taxes again!

but the repukes, Fox News; Cavuto, Limbaugh keep calling it raising taxes. Like Charlie Rangle says, they are only putting taxes back to where they were when Bush cut them for the filthy rich & such and they actually can cut taxes for the middle and lower middle class.

Of course putting the taxes back to where they should be is called "raising taxes" for the repukes.

Actually, one thing I wish they would do and I think would help the working man is cut the payroll tax.

Social Security, Medicare & Medicaid. All of thos programs are in pretty dire condition right now. To get SS back on track, I think the best solution is to raise the cap. YES that will be viewed as a tax hike, but so be it! Hell, when I firt started working, the cap was in the low $20,000's. I can't even remember how many times it was raised over my working lifetime, but we all survived just fine!

Medicare is another problem all together, and I sure don't have ANY anaswers for that!

for social security. Has anyone brought that up yet? There really are a lot of ways which would be fair to all for getting more tax revenue to pay for things but it is always a battle. Frigging lobbyists.

for us. Our very last chip then becomes simply our nukes. That is one big difference between now and then.

the royals won't last one day and their country will fall.

The others might, but the resultant chaos will set off the next world-wide depression/economic collapse, which in turn will wipe out the short term gains they will realize by abandoning the greenback. OTOH, there is great "opportunity" in chaos so they may have determined that the risk is worth it.

My guess is that Venezuela will convert to the Euro and Russia is very likely to. China is nothing without our market to sell into so I put them into the unlikely column.

BTW, I and many others here have been spot on in predicting all of this for well over a year. We are about to learn why "may you live in interesting times" is a curse.

corporate newsstream--some months ago, that there was a meeting of China, Russia and I think the third one was India, about how to curtail the lawless U.S. bully, particularly as to an attack on Iran. It didn't say what their strategy might be, but my first thought was economic, and my thoughts turned to China, of course, which holds a lot of our debt paper. A blink from the Chinese and we could be in disaster city. And all three of these countries have nukes. In fact, I'd kind of figured that this was WHY Bush/Cheney haven't attacked Iran--that they have been warned. However, this current story would seem to indicate that the punishment has only begun. Perhaps a warning was issued, our madmen scoffed at it, and now we're seeing the consequences of that.

It's hard to figure what Saudi Arabia could gain from a U.S. financial collapse (or serious decline). Don't they own a lot of property and businesses here? And, as you say, the Saudis are dependent on U.S. military support.

As for Venezuela, the Bolivarians want a South American "Common Market," and common currency. But I guess Venezuela might go to the euro, temporarily, especially if this a concerted, multi-country strategy to stop an attack on Iran, and/or to punish the U.S. for Bush Junta crimes. The South Americans--and particularly the Venezuelans--are frigging sick of U.S./Bush/corporate predator games--backing coups, funding rightwing "opposition groups," winking at rightwing death squads in Colombia, and the constant stream of lying abuse and disinformation from the Bush State Department and its lapdog corporate press, against a democratic country--Venezuela. I've seen evidence that even some of the rightwing Latin American leaders are irritated at it--especially at destabilization and overthrow efforts. There is quite an independence movement under way on the continent. When the Bush Junta blocked Venezuela's seat on the UN Security Council, the OAS countered by voting Venezuela onto its Human Rights Commission. That about sums up Latin American opinion of the Bushites and their treatment of Venezuela.

Of late, I've noted a particular global corporate predator "news" campaign to paint the Chavez government ss irresponsible, profligate and incompetent in its management of Venezuela's oil.* Now that I think of it--the big deal that Venezuela just signed with China is probably the reason why. Also, Exxon-Mobile is smarting, because they think that Chavez (that is, the Venezuelan poor) didn't pay them enough for the oil infrastructure in the buyout. Exxon-Mobile appealed to the World Bank to try to get them some more money (to add to their billions and billions and billions). And, to make really bad hair days for them all, the Bank of the South (started by Venezuela, which has five or six member countries) is cutting into World Bank/IMF loan shark profits, by providing social justice-friendly loans to third world countries, starting in South America. So there is much reason for seething hatred of the Chavez government in corporate board rooms.

I think I would gage WHO might be involved in a "get off the dollar" strategy for curtailing Bush/Cheney & co. by who our fiends are demonzing or provoking. Venezuela certainly qualifies. And Russia (the missile thing) would be another. Iran, of course. But the Bushites have been deadly quiet about China, even as Chinese imports poison American children. That's the sort of thing you'd think they would throw a fit over--all maudlin and hypocritical--if they thought China was messing with them.

China has much reason to try to prevent a Bushite attack on Iran. They get a lot of their oil from Iran. But the Bushites' behavior doesn't point to them. China could be playing a quieter game of it, though--with very veiled threats, but nothing to set off Bushite alarm bells.

Anyway, I'm thinking we're in a money war, on top of everything else. Countries not just fleeing the dollar for monetary reasons, but doing so for political reasons, and out of serious concern for world stability. Being inside the U.S. (and given our corporate news media), we don't get much of a sense of how the rest of the world views us--as an out-of-control, trigger-happy, utterly conscienceless, lawless super-power, that the American people are powerless over, and that no one can control. We may be in for a hard lesson in what less powerful countries can do, if they band together.


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*(See "NYT's Tina Rosenberg Goes to School on Venezuela's Oil, and Flunks," at http://www.venezuelanalysis.com/analysis/2808.)

I'm going to go and post a rant now, some of which will relate to this, so stay tuned...

China is nothing without our market to sell into so I put them into the unlikely column.

They have a more controllable economy and population.

They have diversified their exports away from the US. I think only about 20% of their exports go the the US.

A 20% slump in an enconmy that's been growing 10% / year is more tolerable for them than a 20% slump would be for us.

Their US Dollar reserve is about %1.5 trillion. Even if they lost half in a devaluation of the US Dollar, that's less than we're spending on Iraq. If the US gets belligerent about it, they can seize US assets in China.

It has been since the beginning, and has been repeatedly warned against for well over 20 years. Even Nixon knew enough to tread lightly, slowly, and to secure agreements on measurable progress with the Chinese before making the deal. It was one idiot neo-cons and corporatist Democrats, with their astonishing ignorance of China's culture and methods, that put us in this completely untenable position.

The percentage of China's exports to us is significantly greater than 20%, closer to 40% once upon closer examination, and the remaining 60+% is with countries far more sophisticated than the yahoo's that currently run our national policies, so they cannot afford to make the ultimate play quite yet.

However, you are right in the medium term. The window is closing on our opportunity to control/influence their actions. Given another 2 - 5 years of the completely insane policy begun by the Clinton administration and accelerated by the White House squatters that run our country now, and we will become inconsequential.

And, storing it until we can finish in the spring. We are also buying necessities, now. The depression is coming. We are already
in a full blown recession, no matter what the spin babblers say....

Batten down the hatches. If you NEED to buy something & can afford it, buy it now before the worth of our currency is gone.

I want to get paid in Euros.