Coming on the heels of announcements by Venezuela and Iran that they may ask buyers to pay for oil in euros rather than US dollars comes news that the value of euro notes in circulation is set exceed the value of circulating dollar notes, according to calculations by the Financial Times.
Yesterday, the United Arab Emirates anounced that it was switching 8% of the nation’s foreign exchange reserves from US dollars to Euros. According to the Bank for Internaional Settlements, the share of foreign-exchange deposits held in dollars by OPEC fell to a two-year low of 65% during the second quarter of 2006.
Perhaps more troubling is the announcement by China in November that it would look to diversify its foreign-exchange reserves, the largest in the word at $1trillion (US), away from the US dollar. China holds a large portion of US debt.
In August, Italy announced it was selling off a large portion of its dollar reserves and instead buying British pounds. Recently, the US dollar hit a 14-year low against the pound sterling. Indonesia is also moving towards the euro and away from the dollar.
maybe it’s time to buy some gold bars…