Korea & Syria Diversify Away From U.S. Dollar

More dollar dumping —

According to The Financial Times, The Bank of Korea plans to diversify its foreign currency reserves to gain higher returns. Apparently the bank is not happy with the U.S. dollar (and who can blame them?). The Bank of Korea plans to invest part of the nation's huge international reserves ($240 billion—the world's fifth largest) in overseas stocks (notably the blue chips of advanced countries) in an effort to gain higher returns. Korea's move follows a policy switch in China which also wants to diversify its $1 trillion+ of foreign reserves (70 percent or more of China's reserves are held in dollar-denominated assets).

Hot on the heels of Korea's announcement is Syria. Syria recently announced that it has replaced the dollar with the euro for half of its foreign currency reserves. According to the Syrian Prime Minister, this was done—in part—to counter possible U.S. sanctions.

I expect more countries to follow suit.