http://www.bloomberg.com/apps/news?pid=20601087&sid=a2O1PM.i.kIY&refer=home

” Dec. 28 (Bloomberg) — The dollar’s share of global foreign-exchange reserves fell to a record low in the third quarter as demand for U.S. assets waned after the subprime- mortgage market collapsed.

The dollar accounted for 63.8 percent of reserves at the end of September, down from 65 percent three months earlier, the International Monetary Fund said today in Washington. The euro’s share rose to 26.4 percent from 25.5 percent. IMF quarterly figures go back to 1999, the year the euro was introduced.

The figures suggest central banks diversified out of the dollar as it fell to the lowest level in a decade. Investors sold a record amount of U.S. securities in August when defaults on subprime mortgages rippled through financial markets and the Federal Reserve signaled it would cut interest rates.
…”

http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20071228/FOREIGN/110571739/1001&template=nextpage

Influential Financial Times columnist Martin Wolf recently wrote that the global credit crunch “is a huge blow to the credibility of the Anglo-Saxon model of transaction-oriented finance capitalism.”

“A mixture of crony capitalism and gross incompetence has been on display in the core financial markets of New York and London. … Not for a long time will people listen to U.S. officials lecture on the virtues of free financial markets with a straight face.”

The World Central Banks are exploding the global money supply by running the electronic printing presses on overdrive. That can only result in significantly higher inflation rates. I guess it is just too easy to press the “print” button when the bills need to get paid. In the upcoming New Year, adjust your personal financial investments accordingly into tangible assets (ie. natural resource stocks, energy stocks, food commodity stocks, gold mining stocks, gold and silver, etc.).

http://www.cnbc.com/id/22406067/for/cnbc

Chinese regulator says more US rate cuts will have `harmful effect’ on dollar

updated 6:11 a.m. ET Dec. 27, 2007

BEIJING - Further cuts in U.S. interest rates would have a “harmful effect” on the dollar and the international finance system, a Chinese finance official wrote in a commentary Thursday in an official newspaper.

The dollar’s fall against many currencies has prompted investors to sell dollar-denominated assets, Hu Xiaolian, director of the State Administration of Foreign Exchange, wrote in the Financial News, a newspaper published by the central bank.

“If the (U.S.) federal funds rate continues to fall, this will certainly have a harmful effect on the U.S. dollar exchange rate and the international currency system,” Hu wrote.

Financial markets closely watch official Chinese comments on the dollar because Beijing keeps a large portion of its US$1.4 trillion in reserves in U.S. Treasury securities and any change in China’s investment strategy could affect exchange rates.

In news further away from home, and yet no less relevant, the director of SAFE has suggested that “if the (U.S.) federal funds rate continues to fall, this will certainly have a harmful effect on the U.S. dollar exchange rate and the international currency system.”

http://money.cnn.com/2007/12/27/news/international/bc.apfn.as.fin.china.us.dollar.ap/index.htm