India Now Questioning the Dollar: Push For Replacement Gains Steam

Not good, and the way things are going the call to reduce if not eliminate the dollar as a cash reserve can have devastating results for the United States. China and others have questioned their use of the dollar in the face of the massive spending and fiscal lunacy of Obama and people questioning the countries solvency, to now have a country that has been quite friendly with the United States also push to replace the dollar is a troubling sign:

July 4 (Bloomberg) -- Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.

“The major part of Indian reserves is in dollars -- that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview yesterday in Aix-en-Provence, France, where he was attending an economic conference.

Singh is preparing to join leaders from the Group of Eight industrialized nations -- the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia -- at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representatives to the summit.

As the talks have neared, China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.

The solution being floated right now is combine a slew of currencies into some type of supranational currency so as to diversify the financial holdings. The implications for the United States are clear and all of these proposals are aimed at weakening our nation. Of course we have the trump card that despite Obama's spending people understand our government sort of respects private property (Unless you are a Chrysler Bondholder) keeping the US dollar a haven in the world.