Well this week, I read an article where instead of analysts/economists in the US seeing the demise of the Dollar as major cause for concern, they are 'ramping it up' as being 'an opportunity'.

There is no 'Copyright' on this article, so I thought that I would share this with you because for once, I actually believe the author of this article states a pretty balanced and valid case - and importantly, he does not gloss over the US weaknesses.

Here is the article in its entirety:

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Most Americans will view China's effort to dethrone the US dollar as the world's main reserve currency as one of the biggest economic threats that this country will have to face.

But the reality is that this tectonic shift in global finance - and the economic shockwaves that will result - could provide investors with some of the greatest profit plays they'll see in their lifetimes.

No matter which camp you're in, the China-spawned changes are headed our way.

In 1990, the US banking system was 2.3 to 2.7 times the size of its counterpart in China. Friday, however, the situation has been reversed, and there is much more of an imbalance. In fact, China's banking system has 25 times the reserves of the US Federal Reserve.

At some point, the United States will no longer be able to dictate international monetary policy. Unfortunately, as our monetary policy aptly demonstrates, Washington seems to be the only player involved in this game of high-stakes global finance to not understand just how this is destined to play out.

US leaders continue to employ monetary policy as a weapon - despite the fact that most of the rest of the world views the US dollar as a liability.
At the end of World War II, virtually the entire world functioned on dollars. By some accounts, 100% of the world's money supply was the dollar. Friday that figure has dropped all the way down to 19%, says Rochdale Securities LLC analyst Richard Bove, a noted expert on the US banking system and Federal Reserve.

Now that the federal government has deployed a few trillion dollars more as bailout bucks, it's clear that the greenback has lost its mojo and the US government has lost its international monetary leverage.

Why is this worrisome? History tells us that the countries with the strongest economies tend to also have the strongest currencies. It may take awhile for the latter to catch up with the former, but the relationship is highly correlated relationship - suggesting that China's on the rise economically, while its currency is advancing with the unstoppability of a diesel locomotive operating at full throttle.

So if the US dollar gets derailed as the world's chief reserve currency - as we've repeatedly predicted is destined to take place - the world's next reserve currency is likely to be China's RMB, known officially as the renminbi.

Washington says that won't happen, since Beijing takes steps to keep the RMB from being fully tradable. That's true enough. But Beijing also understands that the dollar is a liability - which is why China's leaders are going to great lengths to establish the RMB as a viable currency all its own, while simultaneously minimizing the Red Dragon's dollar-based exposure.

In the last six months, for example, China has signed at least $95 billion in swap agreements, under which it can trade directly with countries for payment in RMB. The countries that sign these deals are getting huge discounts from China in exchange for their participation - and for buying goods from China. And the deals enable China to do an end run around the entire dollar-based currency trading system.

When it comes to this long-term plan to boost the RMB's importance, China is waging a campaign on multiple fronts. This past spring, for instance, China organized a meeting in Moscow - attended by representatives from Brazil, India and Russia - where the main goal was to supplant the US dollar as the world's main reserve currency, replacing it with a RMB-led market basket of currencies, one that is simply backed by China's renminbi, or perhaps even one based on the International Monetary Fund's so-called Special Drawing Right (SDR).

Created by the IMF in 1969 to support the Bretton Woods fixed exchange rate system, the SDR was redefined in 1973 as a basket of currencies. Friday, the SDR consists of the Euro, Japanese Yen, Pound Sterling, and US dollar.

My guess is that this gathering in Moscow was merely the first of many such meetings that we'll see take place around the world in the years to come. Expect the list of attendees to grow, as well.

Given all that we now know, the real question becomes: What happens if China succeeds and the RMB displaces the greenback as the world's top transactional currency?

The list of potential implications is very long, and includes several scenarios that are almost apocalyptic. But most of the outcomes raise as many questions as they answer.

Let's consider the Top Five:

�Global Gloom Leads to US Doom: The US dollar goes into freefall for the simple reason that if no country has to hold dollars any longer, they won't. Instead - thanks to the ragged state of the US government's finances - many countries will dump greenbacks fast as they can, which will only put additional pressure on an already-strained US financial system, which in turn will further damage our economy.

�Inflation Inflates: Inflation will strike here with a vengeance, as anything bought, sold or priced in dollars will instantly rise in price to offset this fall.

�Repatriation Risk: With the dollar serving as the world's de facto currency, US companies bear very little exchange rate risk when the time comes to repatriate assets or make currency-related adjustments. That would change overnight and prices throughout the value chains would rise sharply to compensate.

�Money Costs More: The cost of money itself would rise. If the dollar falls, not only will there be massive selling pressure against it, but the cost of borrowing it will rise dramatically as lenders raise rates to cope with the increased risk of dollar-based transactions.

�Death By Debt: And finally, if there is another reserve currency, other countries will no longer have to buy our debt, and you can guess where that will leave us - especially given the fact that we've taken on trillions in new debt to help finance our way out of our current mess.

My best guess is that we won't see any one of these things in isolation, but will instead experience a blending of several or all of them. To the extent that China continues to absorb our inflationary influences, buy our debt in measured doses and maintain its reserves, we'll probably have a measured decline in the value of the dollar - but not the catastrophic fall many in the doom, gloom and boom crowd are predicting. At the same time, I also see the IMF change course in the next few years to reflect China's increasingly substantial influence and monetary power.

On the individual investor level, this clearly provides a new set of influences that most investors have yet to grasp. Most will perceive what I have said as a threat, but I believe the correct way to view this is that there will be a whole new set of opportunities coming our way.

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With that in mind and a wry smile from me, on to the numbers for the week that was: