Russians on the Dollar side...good for commodity market bad for Crude oil.

Russians realigned their Rubies with dollars ahead of the meeting of the emerging market group on the very fuure of the socalled world reserve currency. The coin of contrast has been baited between European Euro and American dollars with many countries pointing to Euro as the next possible dump of the world currencies. The purpose of this meeting of these emerging economies of the world - Brazil, India, China, Russia - is if not clear especially, except in context of uncertainty of confidence hat such meaning spike on US dollars. A weaker US dollars will perhaps open more avenues for businesses around the world, which will further enhance the inflation of American economy. US economy is still dependent on markets from around the world (emerging commodity markets for sure) and American commodity markets still account for 70% of its market. Russians anticipating the whole drama indicated that it has no need for further meeting, and the country suffering from the year long problem devaluation of its currency will need to reposition themselves in US currency.

By taking so active a position, the Russians are beginning to indicate that they are likely to seethes with a better face on the rest of the world. The country has largely remained in the foreground since is days of communist breakdown. Making the transition from a communist state to capitalist require all the competence of modern financial giants from Russia, but even they had succeeded according to plan, there was Euro to deal it. The tension between Russia and Europe seem to be ignored, far less critical has been the improbability of a community of currency champions that include Germany and France to excel too far against Russia. In effect, it can be argued that the resistance level of most currencies baiting against benchmarks is noted by degree of participation of two competing forces capable of affecting the outcome. Such outcome that enhances the Euro against the dollars can be expected, it is unlikely to be desired for could anyone expect the Euro to replace American dollars by even a narrow slide even for a 25 years.

The purpose of this meeting of G4 emerging markets can only be explained as a diversionary ploy, intended to spook the rise of alternative monetary currency opposed to world financial Reserve currency; dollars. For now, if not for now, no singular currency is anyway positioned to challenge the US currency, which brings out the more useful question of why Euro will be seduced to promote itself given the expansion of balance sheet in Eastern Europe. For years, a rift has existed between Russian businesses and European frontier companies, like the landing rights of Luftansa and Russian Aeroglots. Structured characteristics of existing financial base of Russia and Europe make investment between these two power houses difficult, worse than all is the very recent fall of Russian Rubies which led to serious decline in stock profit for businesses belonging to European countries.

Europe seem too slow to gradually accept the inevitability of breakdown of its currency, despite the failure of banks in Eastern Europe and infrequency of payment, the continent an her ECB seem less concerned with huge trade deficit between it and the rest of the world. For stability pact to endure, government sponsored enterprises (GSE) should be relied less and less, in order to help the private institutions and indeed the world market to participate in such an open market. There should be a balance between risk management and assumption of debt. For the sake of investment, more private direct participation as opposed sovereign wealth is very useful, and given the export depended basis of European economies, there is no basis for expensive commodity market. Crude oil which the Russians are tagging to their wealth is however expected to peculate.

Here, in terms of operating commodity market of Russia seeking to barely survive the new fall of their currency, they seem to have done better by openly declaring their intentions to peg their currency with dollars. Given especially the whole world of crude oil that is likely to advance with an upside view towards the end of 2009, Euro is not a safenet. The dollar is, perhaps the pounds with newer and better realised tendency, needs to be mentioned that the Euro has performed in consonant with crude oil, its likely dip in monetray significance, might spell bad news for crude oil.