Weak Dollar for interesting times and $4 gas

Remember a year ago when oil hit $170 a barrel and gas was over $4 per gallon at the pump? This is a large effect the weak dollar has on consumers. Currently, the dollar index is headed lower and by end of the first quarter 2010, headed to its near all time low or most likely even lower. Although our economy and the world economies are in far worse condition than they were a year ago during the record high gas pump prices(which requires a lot of explanation in itself), which would normally lower world demand and drive prices lower, we have emerging economies that are chugging away all those surpluses. If you think this is depressing, read no further.

These emerging economies, called BRIC's, an acronym for Brazil, Russia, India and China require a lot of fuel, or petroleum, to sustain this growth. However, Brazil and Russia are self sufficient countries in regards to Energy. So, China and India require much of these petroleum reserves to keep growing. Brazil, Russia and China are also threatening to remove the United States Dollar as their reserve currency. Although replacing the dollar as their reserve currency cannot be done overnight and would especially be unadvantageous to start replacing when the dollar is weak, the thought that they even thought about doing this is very scary. Why would anyone think about this, if they possibly didn't have the intention? Any other old newshound will remember that the Old Soviet President, Vladimir Putin first brought up replacing the dollar as their reserve currency a couple years back. Now we have Russia, Brazil, China and even the UN? ...and to a lesser degree but still can be significant, Chavez and Ahmadinejad.

The replacement of the dollar as reserve currency would cause for interesting times in the United States. The main reason the dollar is able to hold this amazing and ballooning budget deficit is because the US Dollar is the number one reserve currency on earth. If this were to change, what would keep all our debt holders from asking for their borrowed money back?