You know it’s something of a slow news day when pundits start getting their undies in a bunch about the Russians diversifying out of dollars. Really, they’ve been beating this dead horse for several weeks and it’s getting tiresome.

Here is the meat of the story from Reuters:

Russia on Wednesday pledged to cut the share of U.S. treasuries in its $400 billion reserves, driving the dollar lower on global markets, although it said the move would be gradual and only replace bonds as they expire.

Central bank First Deputy Chairman Alexei Ulyukayev said it would buy bonds issued by the International Monetary Fund and also up the share of reserves held in foreign bank deposits, also reduced in the wake of the banking crisis last year.

Russia holds around 30 percent of its reserves in treasuries after central bank asset managers last year cut their holdings of riskier assets such as bonds of U.S. agencies Fannie Mae and Freddie Mac.

“Now this share (of treasuries) will fall because the window of opportunity is opening, the situation with banks is becoming clearer,” Ulyukayev said. “We will increase the share of bank deposits, the share of repos will be bigger as well.”

He said Russia would not immediately sell its treasury holdings but would rather wait until the securities mature, gradually replacing them with other assets. Russian officials earlier said they were concerned about U.S. inflation.

This is mostly intended for political consumption. In the long run, Russia is going to do whatever makes the most sense economically for itself. The diversion of $10 billion or more is a small blip given the size of the market for Treasuries. The question that’s never answered when Russia, China or some other party starts belaboring this issue is what is your alternative. Until they name one that makes long-term sense, all this talk is just that.

Whatever currencies end up being widely held in the future will depend upon a whols host of factors. Among them are the underlying strength of the issuing country’s economy, free internal and external capital markets, a well established rule of law, stable political systems and a general commitment to free enterprise. How many countries now fit that bill?