Dear Comrades In Golden Arms,

So you think the dollar can remain in this range as the momentum of usage drops?

Do you really think foreign buying of US Treasury instruments is going to rise to meet the increasing offerings?

You are kidding yourself when even a state of the USA, Japan, wants diversification.

Have you asked yourself why so many want diversification? That cannot be because these nations feel the dollar is going to increase in value.

What does China, Indian, Russia and Japan know that the US sheeple do not? They know that hyperinflation is a currency event, not an economic event. They know that MOPE does not have legs when the matter is a reserve currency.

MOPE does not have legs when the matter is a reserve currency because the decision makers at their level understand economics even if they have not practiced it according to their understanding of it.

They know that Confidence in the dollar is its only value input.

They know that when the currency to be at cause to hyperinflation is a reserve currency the world is in deep trouble.

DPJ's Nakagawa Says Japan Should Diversify Reserves
By Keiko Ujikane and Kyoko Shimodoi

July 13 (Bloomberg) -- Japan's opposition party, leading in polls ahead of next month's election, said the nation should consider shifting its $1 trillion of foreign reserves away from the dollar and buying International Monetary Fund bonds.

"In the medium to long term, we need to do what we can to avoid the risk of currency losses or economic turbulence that could result if the dollar were to swing," Masaharu Nakagawa, the shadow finance minister in the Democratic Party of Japan, said in an interview in Tokyo on July 9. "Many countries are starting to diversify their reserves."

Japanese investors are the biggest foreign holders of Treasuries after China with $685.9 billion of the securities in April, and Finance Kaoru Yosano said last month his trust in the bonds is "unshakable." The DPJ yesterday beat the ruling Liberal Democratic Party in elections for Tokyo's city assembly, boosting its prospects ahead of national polls that Prime Minister Taro Aso today called for Aug. 30.

"The current reality of Japan's foreign-currency reserves is that their heavy weighting toward dollar assets means any fall in the dollar's value leads to valuation losses," said Susumu Kato, chief economist in Tokyo at Calyon Securities, the investment banking unit of Credit Agricole SA. "The DPJ is opposed to a foreign-currency reserve policy that is so wholly skewed to the dollar."

The yen traded at 92.39 per dollar at 2:11 p.m. in Tokyo from 92.54 late July 10. It has gained 4.3 percent this month.

'Unshakable' Trust

Nakagawa said Japan should consider purchases of new bonds issued by the International Monetary Fund that will pay an interest rate pegged to the fund's basket of currencies -- the dollar, euro, yen and pound -- and known as Special Drawing Rights. The dollar is the principal component of SDRs. The IMF said this month it would issue bonds to its 186 members for the first time.

"We should start considering that as an option," Nakagawa said. "I am not saying we should do it right away. If everyone starts doing it all of sudden, it may sway the dollar." He didn't say Japan should sell any of its dollar holdings.