Simon, with the exception of few Americans and quite a few more Chinese, everyone including the FED agrees that dollar needs to go down, so I don't think there is a conspiracy. Financial Times reports: "The wider issue of global imbalances, in which dollar depreciation, against Asian currencies at least, is viewed as part of the solution to the burgeoning US external deficit, is even seen as returning to the agenda of the G7 when it meets in Washington later this month... Mr Nordvig also sees signs that China, South Korea, Taiwan and Singapore are intervening less in the markets to weaken their currencies, reducing the flow of funds that need to be recycled into dollar assets. Similarly the issue of central bank reserve diversification from the dollar to the euro has returned after a long hibernation." As for oil being priced in Euros or some other currency, in a way it already is. Oil market is complex and hardly free, both the OPEC cartel and taxation (in Europe at least) play a significant role, but still the price is affected by what the market will bear. Continental Europe buys in Euros, Brits in Pounds, Japanese in Yens, and part of the rise in the price of an oil barrel in USD is due to the dollar in general depreciating against these currencies over the last few years. Still, pricing oil in Euros might be a good idea in general. For Middle-East trade on the whole, Euro is the most important currency. Also in the current beggar thy neighbor situation (similarities to 1920's are scary) paying for their oil in Euros should help convince Asians, and Chinese in particular that their currencies need to go up against both USD and the Euro. There are some signs that China basically wants to trade their trade surplus with USA to one with EU, and EU will not tolerate that. If we had working trans-Atlantic co-ordination, EU and USA would basically tell Chinese to let their currency revalue and let the domestic consumer economy grow, that is have the Chinese themselves buy more of the stuff they are making. And if that increases pressure to move to actual working democracy, all the better. As Martin Wolf put it, surely a developing nation like China can find better use for $800 billion than to park it in US treasuries which will yield negative interest given that USD will inevitably depreciate against RMB at some point. Then again if we had working trans-Atlantic co-ordination, a whole lot of things would be better. Cheers, Teemu Helsinki, Finland __________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com ------------------------------------------------------------------ To change your Lit-Ideas settings (subscribe/unsub, vacation on/off, digest on/off), visit www.andreas.com/faq-lit-ideas.html