Australian Treasurer Seeks Orderly Withdrawal From U.S. Dollar

By John Garnaut
Economics Correspondent

Central banks in China, Japan, Taiwan, South Korea and Hong Kong have channelled immense foreign reserves into American government bonds, helping to prop up the US dollar and hold down American interest rates. Mr Costello said "the strategy had changed" and Chinese central bankers were now looking for alternative investments.

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Striking the US where it hurts
By Victor N Corpus

A decision by China to shift a major portion of its reserve to the euro or the yen or gold could trigger other central banks to follow suit. Nobody would want to be left behind holding a bagfull of dollars rapidly turning worthless. The herd psychology would be very difficult to control in this case because national economic survival would be at stake.

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