I have no idea if I spelled "Roshambo" properly, but let's move on...
South Korea announced today that it's moving away from the US dollar as a reserve currency, relying more on other currencies including our dollar.
There's certainly no malice in this act, but the dollar had just begun to stabilize again after a long slide. This isn't going to help things. Meanwhile, you've got George Soros out there talking about how the dollar is inching up to a "tipping point" where it will go from depreciation to chaos. Now, agree with him or not, he's got a lot of influence on the markets.
Meanwhile, oil is back up to $51 a barrel. Not coincidentally, OPEC is saying there's no need to further cut production. Gee, really? You're just swell! I'd just like to reiterate what I said yesterday - OPEC is essentially neutered at the moment. They no longer set prices - The Chinese and Indians do.
There's an interesting quirk with oil prices, though - because they're denominated in US dollars, domestic US oil prices are unaffected by a decline in the US dollar, essentially treating all world oil production as if it came out of Texas or Alaska. On the flip side, as the greenback falls in value, oil gets relatively cheaper for the other 95% of the world... or it would, if demand weren't outstripping supply.
So a question, for the audience: When OPEC realizes that they will be at full production from now until judgement day, what incentive can the US give them to not switch to another currency scheme? OPEC won't necessarily be able to constrict supply without risking a backlash from the industrialized world, so the only way to keep the price rising would be to phase out the use of the underperforming dollar. Some articles say that major oil-exporters are already doing this, but I haven't seen a clear summary of what's going on.
Anyone have something to add? I can't say I understand where all this is heading, but there seems to be enough reason to worry about the economy in the future.