Republicans Anonymous

Sounds like China has decided to pull the plug on W and his Bush League minions:

China signals reserves switch away from dollar
By Geoff Dyer in Shanghai and Andrew Balls in Washington
(Financial Times)
Published: January 5 2006 20:13 | Last updated: January 6 2006 02:43
China indicated on Thursday it could begin to diversify its rapidly growing foreign exchange reserves away from the US dollar and government bonds – a potential shift with significant implications for global financial and commodity markets.

Economists estimate that more that 70 per cent of the reserves are invested in US dollar assets, which has helped to sustain the recent large US deficits. If China were to stop acquiring such a large proportion of dollars with its reserves – currently accumulating at about $15bn (€12.4bn) a month – it could put heavy downward pressure on the greenback.

It sounds as though W's wonderful job managing the economy will soon rank right up there with Brownie's performance at FEMA. About the only thing propping up the Bush Economy has been foreign financing. If the Chinese stop buying, so will everyone else.

Meanwhile, Iran is about to take their own massive strike against the US dollar. They're going to open an oil market (a "bourse") using euros - meaning all those US "petro-dollars" currently tied up by folks buying and selling oil in US dollars will be converting them to euros. This will cause another massive run on the dollar:

Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse

by William Clark
(media monitors network)
"A successful Iranian bourse will solidify the petroeuro as an alternative oil transaction currency, and thereby end the petrodollar's hegemonic status as the monopoly oil currency. Therefore, a graduated approach is needed to avoid precipitous U.S. economic dislocations."
(Emphasis in original)

Yep, smart money says the dollar is headed straight down the toilet. This will in turn cause the price of all exports, including oil, to skyrocket. Suddenly that Prius is looking like a good investment:

Will the Iranian Oil Bourse Threaten the Dollar?

Tuesday, September 13, 2005
(The Trumpet)

Iran continues to push its weight around. Now it proposes to begin pricing oil in euros. Unfortunately, just about everyone would benefit—except the United States.

For half a century, the American dollar has been the reserve currency of the world. Seventy percent of all currency reserves are in American dollars.

This has a lot to do with the fact that oil, the most important commodity traded in the world, is mostly priced in U.S. dollars. The majority of countries, being oil importers, have to buy their oil in U.S. dollars. This, together with related economic considerations, encourages them keep most of their foreign currency in dollars.

The debt-burdened U.S. economy is dependent upon this high demand for its currency in order to remain afloat. The day this demand comes to end will portend disaster for the American economy.

There is a move underway, however, to effect just such a reversal of the dollar’s fortunes. In particular, the world’s second-largest producer of crude oil—and declared enemy of the United States—Iran, seeks to end the predominance of America’s currency.

Several weeks ago, Tehran reconfirmed that it plans to create a euro-based exchange in oil—to compete with the London and New York dollar-denominated oil exchanges, both American-owned.

The proposed March 2006 launch of the Iranian oil bourse (iob), if successful, would give the euro a foothold in the international oil trade, solidifying its status as an alternative oil transaction currency. This, in turn, could be a catalyst for a major currency flight from the dollar to the euro—and a disaster for America.