Reply #2: The problem is

[Yael]

that China & India are among the largest holders of US$ in reserve currency (Japan is first). The more the $ weakens, the less of a position they will hold and the more they will go toward the Euro as their hedge.

A little background: Hand in hand with pulling us off the gold standard and onto fiat currency (unbacked money), Nixon put together a deal with OPEC wherein OPEC would only trade oil in dollars. That system/agreement still exists today and the 2 oil trade centers are NYC and London.

IMO, the main reason we bombed Iraq wasn't for their oil. Hussein threatened to open a new oil trading center (called a "bourse") that would trade exclusively in Euros. This would lead to the world's nations dumping bajillions of US$ onto the market while stockpiling Euros -- thus deflating the US$ 'overnight'.

We are clamoring after Iran now. Google "Iran Oil Bourse" and you will know why this country is such a hot topic where nations like N. Korea and Sudan are taking a back seat.

:hi: