Hi M.D. - it being the weekend and all, let me continue off-topic a bit - although I feel you are right in that your point that there will be a + impact on the price of oil is right.

The Chinese are proposing to continue to peg the ren min bi, but instead of fixing it to the USD, to fix it to a basket of currencies.

First point - they will not allow the ren min bi to take a dramatic surge in value; it would cause massive internal disruptions.

It is the impact on the USD that will be possibly more significant. At present, the USD is percieved as a "safe haven" currency. This is in spite of colossal economic difficulties - budgetary deficint of almost unimaginable orders of magnitude, a chronic trade balance of hundreds of dollars a year, impending unsecured liabilities (pensions primarily), industries in difficulty.

If Canada were facing these problems, the CSD would trade down around the level of peso. )Exaggeration for dramatic impact). I would argue that a large component of the value of the USD is psychologically based on the past 60 - 70 years of wqorld economic history.

Now here comes China and basically says we have little confidence in the USD; we are going to peg to other currencies.

Could this trigger a significant slide in the value of the USD? Which of course would help the price of oil, but even though I have a chunk invested in the oil sector, I think would not be nice for any of us.

Comments from American friends???