In another sign of the weakening of the US dollar, and by extension, the US empire, we have reports that the Russian Central Bank says it wants buy just under $5 billion Australian dollars. This is to reduce its dependency on the greenback which has been sliding.
Part of that is because of Australia's links with China and the Reserve Bank of Australia continuing be very hawkish when it comes to interest rates which in turn pushes up the Australian dollar.
But it's also a vote of no confidence in the US economy. America has been flooding global financial markets with US dollars. The US is trying to stimulate markets by providing easy money but it's not working because it hasn't sorted out its debt problem. And by flooding the market with greenbacks, it's reducing the currency's value. It's called Economics 101.
The Russian Central Bank is effectively saying yes it's prepared to hold some US dollars but not too much thank you. Given the risks surrounding the delinquent American economy particularly with its very high foreign debt problem, Russia wants to have less of the greenbacks than it had in the past. It's just too risky.
The big question is whether other central banks around the world will do the same. If they do, it will tell us that the days of the US as a financial power are coming to an end, possibly sooner than anyone expected.
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