According to the March 9 International Herald Tribune, �most of the [foreign currency] reserves China now accumulates are conservatively invested in U.S. Treasury bonds and other government securities, which earn little return for China yet help to keep interest rates in the United States and other countries low.�

It noted, �But the investment agency being established will allow China to diversify its foreign exchange to diversify its holdings. Analysts say the agency could deploy hundreds of billions of dollars to acquire financial or strategic assets around world, particularly in developing countries in Africa and Latin.�

This is a polite way of saying China is quietly kissing our greenbacks bye-bye.

This could also lead to further devaluation of the US dollar, which has a like effect on devaluating your wages, retirement plans, Social Security, every sphere of American life the dollar touches. So, what could China�s reasons be, beyond investing in developing countries, in search of energy assets and natural resources?

Could it be that China is troubled with our fiscal fiascos? For instance, our US trade deficit hit a record $763.6 billion in 2006. The reasons given by the AFP �is �sky-high oil prices and American�s insatiable hunger for Chinese goods.� Well, the hunger is fed by Wal-Mart, K-Mart, and other low-end multi-national retailers, profiting off the low-wage sweat shops of the Far East, as well as from hammering its own US employees. More fancy footwork from the free marketers. The sky-high oil prices are fed by our own gluttonous-for-profit oil companies, Exxon rolling in last year with a $39.5 billion annual profit, a historic record for any American corporation.

Though our budget deficit has dropped from 2004�s record $415 billion, 2006�s deficit still rolled in at $250 billion, about the amount Clinton left as a surplus at the end of his tenure. Also, as of January 17, The New York Times put the cost of the Iraq war at $1.2 trillion. It is almost impossible to find a clear bottom line cost on the Afghanistan war, though it could be as much as a trillion. This while the administration rattles sabers at Iran, most probably contemplating, going in, a war cost in the hundreds of millions.

This while the administration has already put into law provisions of trillions of dollars in tax cuts for the rich and super rich, with additional corporate welfare for the defense and oil industries. So, perhaps it is a combination of our bellicosity towards much of the world and our generosity with the least needy that disturbs the Chinese as well, not to mention the Japanese who raised the interest on their yen last week by 25 basis points, sending markets into a slide. After all they don�t want to lose their shirts by hanging their currencies onto our currency�s coattails.

If you think I�m exaggerating, let me direct you to financial analyst Lindsey Williams Newsletter on The Condition of the Dollar, in which he has some add-ons as well. �First on our list is China. They have now announced that they are refusing to accept American corporations purchasing into their stock market any longer as they did in the past. China also said that they are no longer going to be purchasing our securities as they have in the past, including bonds and T-bills. China�s decisions and subsequent announcements at the beginning of the week have sent a panic across the world�s markets.�

Williams goes on say, �Additionally, OPEC met recently and they have also stated they will be diversifying into other currencies instead of just the American dollar. They will now begin accepting other currencies and limit the trade of oil via the American dollar.�

And if that�s not enough, there�s this . . .�Central banks around the world are increasingly diversifying their reserves, including cutting holdings of American dollars, according to a survey sponsored by Royal Bank of Scotland Group PLC, the U.K.�s second-largest bank. Italy, Russia, Sweden and Switzerland have made �major adjustments� in foreign-exchange holdings favoring the Euro and the British pound, according to the poll conducted by Central Banking Publications Ltd. between September and December. �Central banks are open to saying they�ve been diversifying to improve returns and reduce exposure to any single currency,� said Sean Callow, senior currency strategist at Westpac Banking Corp. in Singapore. There�s no doubt that when they say �diversification� they mean selling dollars.� Alas, it�s not just me.

Williams also notes, �Last week a friend of mine told me they called their bank president in Vancouver, BC, and he agreed with everything I have been saying about the dollar. What amazed me the most was her comment that he told her his bank is currently making preparations for the crash of the American dollar!�

And Williams winds up with this suggestion: �My dear friends, I urge you to structure yourself and get out of the liquid dollar immediately. I suggest that you get out of stock markets and into international hard assets such as real estate, gold and other assets. Structure your family by setting up proper International Business Corporations and Foundations that will preserve your finances.�

This is scant, if not radical, help for the average American working person, retiree, Social Security recipient, public assistance recipient, or disabled person. In fact, these warnings suggest that the American people should demand the impeachment of Bush and Cheney and key members of their administration immediately for their total incompetence. These are the architects of the looting and potential disaster of the American financial system.

Secondly, we should all light a candle like now for the appearance of today�s Franklin Roosevelt, whoever he is, whatever corner he should step from. We need an individual with FDR�s courage, intelligence, vision and humanity to put this country back on its feet again, even in the wake of the worst-case financial scenario.

N.B.: I might add that I take no relish in bringing this news to you. It�s made more painful by the fact that I wrote the first version of this article on my son�s computer and emailed it to mine, which was being cleansed from a nasty Trojan some disgruntled kook sent me. It wasn�t the first, won�t be the last. The kicker was that, in passage from my son�s computer to mine, the article was censored by Outlook Express and made unavailable to me. And so I rewrote it from memory, making it stronger than it originally was. Forward.