Dollar's Fall Wrecking Confidence, Economy

A recent excerpt from Paul Craig Roberts' article on the U.S. Dollar:

"The U.S. dollar is still officially the world's reserve currency, but it cannot purchase the services of Brazilian super model Gisele Bundchen. Gisele required the $30 million she earned during the first half of this year to be paid in euros.

Gisele is not alone in her forecast of the dollar's fate. The First Post, a British paper, reports that Jim Rogers, a former partner of billionaire George Soros, is selling his home and all possessions in order to convert all his wealth into Chinese yuan.

Meanwhile, American economists continue to preach that offshoring is good for the U.S. economy and that Bush's war spending is keeping the economy going. The practitioners of supply and demand have yet to figure out that the dollar's supply is sinking the dollar's price and along with it American power."

The falling dollar is a cause for concern. The greenback is viewed as a risk by many financial players (supermodels included), who are now hedging their bets by shifting their wealth into the euro and other more stable currencies. The same dollar malaise is taking hold in capitals across the globe. Last week a lower-level Chinese official expressed interest in diversifying China’s dollar backed $1.43 trillion in currency reserves and threaten America's status as the world's reserve currency.

America needs its status as reserve currency to sustain its massive national and current account deficits. Unfortunately, it only seems a matter of time before debt lending nations cut their losses, move to euros and leave the dollar and U.S. economy reeling.