[Euric]

Both Korea and Russia announced today that they will begin to diversify their dollar debt holdings. This is not the same thing as central banks slowing or ending their purchases of new dollar debt. This is central banks selling off existing dollar debt.
Central banks gave the US a reprieve since the beginning of the year by allowing the dollar to strengthen against major currencies on the condition that the Bush administration make serious moves to reign in the huge twin deficits. Even though the Bush administration made some gestures by proposing a budget with massive cuts in spending in some areas, the Bush administration increased spending in others.

Central banks around the world are realising that the US never intended to cut its spending habits and never intends to pay its debts.The only solution is to end support and allow the US dollar and economy to sink.Thus forcing the US into a policy of belt tightening even if it means the US standard of living must come to an end.
link and link

[savethehumans]

I've thought for awhile that eventually the rest of the world will get sick of the USA, and band together against the country so that they can cover each other's back when the repercussions hit. This looks like another move in that direction, even if S. Korea DID backtrack...for now....

[pea-jay]

I keep wondering to myself will we have a dollar collapse before peak oil or not. If the other countries conspired to wreck our economy in the attempts to preserve resources for themselves, it sure would work. If the ensuing recession snares their economies, the true peak could be shoved back several years.

The question is--will they pull the trigger, pop a cap in uncle sam or not rock the boat and preserve the status quo as long as possible?

I go back and forth on this one a lot.

[americandream]

I keep wondering to myself will we have a dollar collapse before peak oil or not. If the other countries conspired to wreck our economy in the attempts to preserve resources for themselves, it sure would work. If the ensuing recession snares their economies, the true peak could be shoved back several years.

The question is--will they pull the trigger, pop a cap in uncle sam or not rock the boat and preserve the status quo as long as possible?

I go back and forth on this one a lot.

I reckon these guys are scared witless at losing Uncle Sam...after all he's their mentor and guardian angel in a world full of sharks....wasn't it uncle who freed up a lot of them to cruise the auto highways of life to the the joys of shopping malls.....but at some point in time the dollar buckets gonna pop its rivets with the sheer burden of unsustainable debt coupled with increasingly pricey commodities.

[Doly]

It isn't a coincidence that dollar is so weak around the time of peak oil. One of the main reasons the trade deficit is huge is because the States have to buy tons of oil. So I expect that both peak oil and "peak debt" will unfold at the same time.

[MonkeyMia]

If the ensuing recession snares their economies, the true peak could be shoved back several years.

depression not recession.

[Mercani]

What will happen if the dollar sinks and a global depression starts before peak oil?

Maybe after then we will never recover, but most people still will not realize peak oil, and hope that we will recover soon. The depression will be atributed to the result of American non-saving consumer and global imbalances.(trade deficits, undervalued currencies, etc)

What do you think?

Actually this strategy can be planned and implemented by China, Russia, Korea and others if they are just realizing the concept of peak-oil. This way they will (and the world) will gain some time to prepara for peak oil while reducing oil consumption very fast.

Of course I fear that after everything is clear in the minds of governments then 3rd World War might be inevitable.

Somebody asked Einstein about the 3rd World War, he replied "I don't know about the 3rd, but the 4th will probably be done using arrows, stones and spear ! "

[SD_Scott]

Uncle Sam visits South Korea?
This morning I was watching CNBC and they explained that yesterdays drop in the Dow and the dollar was due to South Korea's statement on diversifying their holdings. I guess they have changed their mind. HMMMMMMM

[Euric]

Both Korea and Russia announced today that they will begin to diversify their dollar debt holdings.

I searched both the articles you linked for "Russia" and it wasn't mentioned - do you have a reference for the Russia part of this? Thanks.

http://business.scotsman.com/index.cfm?id=203372005

Andrew Busch, global foreign exchange strategist with Harris Nesbitt in Chicago said: "South Korea’s plan to change reserve ratios comes on the heels of Russia saying the same thing. This has fuelled speculation that Japan may do the same. That basically hit us and it ignited the euro to rally and continue to put in new highs against the dollar".


http://biz.yahoo.com/ap/050223/dollar_3.html

BERLIN (AP) -- The U.S. dollar recovered a bit Wednesday after a monthly survey found German business executives less optimistic about Europe's biggest economy and South Korea denied it plans to sell the currency.


I find it interesting that South Korea is denying its claim to divest some of its dollar debt. If one checks the figures, one sees that the US monthly debt amounts are very close to what the US is receiving in treasury purchases. In other words they are getting just enough to cover the debts, but not much more. A country like Korea pulling back may be the catalyst that will bring future treasury sales coming short of what is needed to sustain the American economy.

If South Korea is now denying it ever made such a claim it is because they were pressured by Washington or Wall Street not to sell or face some unpleasant punishment. South Korea would have been smarter just to sell without making any announcements.

Russia, especially Putin, may want to sell as a sort of revenge for the comments George Bush made about Russian democracy in Brussels the other day. The US doesn't have the control over Russia like it has over South Korea and Japan.

Japan is in a tight predicament and is still somewhat under US control. Japan is the largest holder and purchaser of US treasories. They are literally destroying their own economy by spending every cent they make to buy US treasories. However if they don't they risk losing everything they already put in. Thus when the US goes, so goes Japan.

I'm sure the EU wants to see the US collapse, but not now. They have to prepare for it and they might not be ready. I know the EU companies are working to secure business in markets around the world so they can be less dependant on the US. It all comes down to timing.

[Armageddon]

Rense this is after they just sent 5 battleships to the balkans. something is getting ready to happen soon. n.korea, syria, or iran is going to get attacked.

[DomusAlbion]

Perhaps they'll destroy N Korea's nuclear facilities. Then Little Kim will not just be Ronrey, he'll be vely vely angly.

[k_semler]

Yet another source: KIVA.COM

jpg HOLLOMAN AFB, NM. - Air Crews and support personnel from Holloman Air Force Base are leaving the area for South Korea. Tensions between North Korea and the US continue to escallate, as the North Korean government may be preparing for a nuclear test.
The Pentagon is re-positioning 15 F-117 Stealth Fighters and 250 Airmen from Southern New Mexico to the troubled Korean peninsula. The 49th Fighter Wing will probably leave their Alamogordo base later this week. Last year, Washington dispatched two dozen Stealth fighters and 300 airmen to Kunsan Air Base in South Korea.

Anyone have a third source to verify this?

[Grimnir]

Actually, they're being sent to bomb S Korea's stem-cell research facilities.

[mgibbons19]

They're not very stealthy bombers gonig that aways if we're all sitting here talking about it now, are they?

Well, I thought it was funny at least.

[Grimnir]

They're not very stealthy bombers gonig that aways if we're all sitting here talking about it now, are they? Well, I thought it was funny at least.

It's a valid point. This could just be more posturing. Start a rumor that you're going to attack in June, conspicuously send a few bombers over at the end of May...very effective.

[BiGG]

Anyone have a third source to verify this?

US stealth fighter bombers deployed in South Korea for training

[k_semler]

I believe it now. About time we did something! we ahve been on a stand off with them for 51 years now! We should wipe the DPRK from the earth, (or specifically Kim Jung Mentally Ill.)

[Starvid]

They aren't Stealth Bombers. They are Stealth Fighter Bombers. All US Stealth Bombers are based in the US and have an intercontinental range. If they were going to bomb anyone they would fly their sorties from a US airbase. This seems to be a routine training excercise. The US has lately removed troops from South Korea (or is planning to?), and South Korea would rather go to war with Japan or even the US than with North Korea.
Relax people.

[BiGG]

k_semler, I thought you would like this one if you haven’t seen it .


A really interesting article by William Arkin on the link = "Early last summer, United States Defense Secretary Donald Rumsfeld approved a top secret "Interim Global Strike Alert Order'' directing the military to assume and maintain readiness to attack hostile countries that are developing weapons of mass destruction, specifically Iran and North Korea. Advance to Armageddon

[EnemyCombatant]

Don't get too excited boys.

You gotta bring ass to get ass!