But while Russia and China are leading the charge against the “‘anti US Dollar as a reserve currency”’ sentiment, India has not lagged too far behind. The Indian Government has made its views known at various global gatherings including the latest G20 meeting held a few weeks ago.

The RBI decided to take the public step of announcing its purchase of gold for its reserves. It chose to diversify its reserves by buying Gold rather than the U.S. Dollar. While India’s reserves are not huge ($300 Billion), they have been growing steadily over the past few years (except for the collapse of the financial markets in September 2008).

But the story does not end there folks. Its gets much more interesting…

The RBI decided to buy the block of Gold (200 Tons) from the IMF in SDRs, not U.S. Dollars.

For those who are new to class, let me explain what an SDR actually is. SDR stands for Special Drawing Rights. It’s an artificial currency that the IMF created to transact its business. When the IMF lends money or gets paid back, it does its math in SDR’s. And the SDR is a basket of currencies…currently 44% USD, 34% Euro’s, 11% Yen, and 11% British Pounds.

Again the spin doctors in the U.S.said, “We instructed the IMF to sell the Gold in SDRs, not U.S Dollars.” That, my dear reader, is utter nonsense. Would you believe that the U.S. would instruct any global agency to use non-dollar denomination for an asset that is traditionally priced in U.S. Dollars?

What’s next? Instruct Iran to start its Oil exchange and buy/sell Oil in Euro’s?