Oil producing nations have significantly reduced their dollar holdings to the lowest level since 2003. In this three year period, OPEC has shifted oil income into Yen, Euros, and Pound Sterling. This is all according to data from the Bank for International Settlements. The most recent BIS review validates what we have been suggesting for quite some time; that foreign nations led by the oil producers are moving out of dollars and could foster new lows for the struggling dollar. The dollar holdings between Russia and OPEC decreased by 5% while euro holdings increased by 10%, the BIS report indicated. This shift explains the recent weakness in the dollar, which touched a two year low against the euro. The BIS is the central bank for the world's central banks. It is the lender of last resort for the world’s official bankers. As such, they are very cautious in their pronouncements. The BIS report stopped short of characterizing this as a dollar but we won’t be so cautious. The BIS says the data for the quarter, “appear to indicate a modest shift over the quarter in the U.S. dollar share of reporting banks' liabilities to oil exporting countries. We say the dump is on. At these rates, it will take less than ten years to reduce these holdings to zero. Iran, whose foreign exchange policy has been solely driven by their hatred of the United States and all that it stands for, jettisoned a record $4 billion in three months. While it is true that this represents only a small portion of worldwide dollar holdings, the physiological shifts in action tend to underscore the prevailing attitude that the dollar is in a perpetually declining attitude. It is this sort of thinking which will cause foreign investors to shun dollars in favor of Euros. The strength these holdings provide may give us an indication of the availability of foreign support for the U.S. deficit. Without willing participants, the Fed will be forced to monetize a growing portion of the U.S. debt. Such dollar dumping actions are likely to be subtle and discreet as focus on this issue could force the dollar lower, thereby reducing the value of remaining dollar-denominated assets. Overall, OPEC's dollar deposits fell by $5.3 billion, while euro deposits rose by $2.8 billion.