China: “We will favor stronger currencies over weaker ones, and will readjust accordingly.”

[milkyway]

From the NY Times tonight:

The most immediate trigger for the sell-off in the dollar, traders said, was a jarring signal that suggested China might shift some of its enormous hoard of dollars and dollar-denominated assets — more than $1.4 trillion — into other currencies to get a better return on its money.

“We will favor stronger currencies over weaker ones, and will readjust accordingly,” Cheng Siwei, vice chairman of the Standing Committee of the National People’s Congress told a conference in Beijing on Wednesday. A Chinese central bank vice director, Xu Jian, said the dollar was “losing its status as the world currency,” according to Bloomberg News.

Mr. Cheng later told reporters he was not saying China would buy more euros and dump dollars. But as markets opened across Europe, those words echoed as a invocation to sell the American currency.

The dollar fell to its lowest level against the Canadian dollar since 1950, the British pound since 1981, and the Swiss franc since 1995. The euro rose to a new record, $1.4729, before retreating.

http://www.nytimes.com/2007/11/08/business/08econ.html?hp

Also, China is increasing its purchase of oil from Iran.

China’s crude imports from Iran on the rise
24-07-07 China bought 24 % more crude from Iran in the first six months of this year versus a year ago, Chinese customs data showed, a growth much faster than traders expected.
Traders had earlier estimated China's crude imports from Iran to be flat or even slightly lower this year from 2006. Iran, the world's fourth-largest crude exporter, maintained its position as No. 3 supplier to China, after Saudi Arabia and Angola.
China bought around 10.9 mm tons, or 440,000 bpd, of crude from Iran in the first half. The surprise increase was due to some spot purchases by state refiner Sinopec, one state oil trader told, an unusual practice as nearly all crude exports from OPEC producers are on long-term contracts instead of spot sales.
http://www.gasandoil.com/goc/news/ntm73443.htm

And Dick wants us to believe the reason we need to invade Iran is to stop the terrorists from killing us all. Iran also happens to have the second largest oil reserves in the world. But if Dick gets a hold of them and cuts out China, what happens if China starts disinvesting in U.S. currency? Why do I get the feeling that other countries are playing chess, and Dick doesn't even know how to play checkers? (Like Bush, he's failed at everything he's ever done.)