Wednesday, November 07, 2007

Dollar at all time low so many countries are starting to go - elsewhere

posted by Bill Arnett @ 1:35 PM Permalink

bush loves to talk about what an "excellent and strong" economy America has, but even putting aside completely the subprime mortgage collapse rapidly approaching, our monetary policy has been so bad that ever more countries are abandoning the dollar as their currency of choice.

See this excellent piece about seven countries that may very well abandon the dollar, and I'm not even talking supermodels here:
[…]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.
The list of countries? Saudi Arabia, South Korea, China, Venezuela, Iran, Sudan, and Russia. By coincidence these are all oil exporting countries or heavy oil importers, so switching to, say, euros instead of dollars, they won't lose 39% of the value of their investments because of the plummeting dollar.

The article give a great breakdown of the consequences of each of these countries abandoning the dollar and changing to other currencies, and in some cases, it is already happening.

The consequences are dire and could easily cause a recession in America and possibly the world.

So the next bush official that tries to tell you how fabulous our economy is, go read reports such as these for a glimmer of the real truth.

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