FREDO'S FISCAL FOLLIES

The next time you hear a radio gasbag (e.g., Sean Hannity) talk about how great the U.S. economy is, bring this up:

Dollar Falls to Record on China's Plans to Diversify Reserves
By Stanley White and Kosuke Goto

Nov. 7 (Bloomberg) -- The dollar slid to record lows against the euro and the Canadian dollar on speculation China's plans to diversify its foreign exchange reserves will involve selling U.S. assets.

The dollar slumped to $1.4666 per euro, the lowest since the 13-nation currency debuted in January 1999, before trading at $1.4615 at 11:31 a.m. in Tokyo from $1.4557 late yesterday. It fell to $1.0975 per Canadian dollar, the lowest since Canada's currency was floated in 1950.
Against the pound, the dollar declined to $2.0947, the lowest since May 1981. The currency slid against the Australian dollar to 93.75 U.S. cents, the lowest since April 1984 from 92.87 U.S. cents.

UPDATE ALSO FROM BLOOMBERG:

The dollar's decline increased the attractiveness of commodities as alternative investments. A weaker dollar reduced the costs for buyers paying in other currencies.

Gold reached a 27-year high and silver rose to the most in 26 years as rising oil prices and a slumping dollar deepened concern that inflation will accelerate.