Dollar Finished as World's Reserve Currency?

blastoise:

it's the end of the world as we know it

great song

JeffSkilling:

They produce all the goods....and we consume it...with money lent to us by the Chinese. China is propping up our economy by maintaining the purchasing power of the dollar..

This is not accurate.

But you get a pass because the spirit of your post is true.

JeffSkilling:

That guy has been advertising his videos for awhile, I'm not really sure what his track record is though. But if he is warning that the dollar's days as the world's reserve currency are numbered, then he's absolutely right. Anyone that is actually living in reality knows this con is almost up. Literally the only reason Americans still enjoy one of the highest standards of living in the world is because our credit (Read dollars) are still taken everywhere and are still perceived to be a safe haven. Nothing could be further from the truth. Europe is buying us some time at the moment as they have diverted the world's attention for the time being, but as soon as the spotlight is back on us things are going to get ugly.

When the Bretton Woods agreement was reached the dollar was given the status as the world's reserve currency because the United States was the economic driver of the world. We had a fundamentally productive economy built on savings and investment. Today, the opposite is true. We now have a phony debt based, fiat denominated economy built on consumption, rather than production. People that think the consumption drives growth and that the trade deficit is not a problem are either extremely ignorant, or lying to you. Consider the US-China relationship. They produce all the goods....and we consume it...with money lent to us by the Chinese. China is propping up our economy by maintaining the purchasing power of the dollar. If they would let the Yuan revalue upwards versus the dollar, all the US purchasing power would transfer from the US to China. This is going to happen inevitably, it's just a matter of when.

So yes, the dollar is going to loose it's world reserve status and will probably collapse in value within a matter of days sometime in the next 3 years. Those that tell you everything is fine are the same people that said home prices would never go down.

The gig is up. Time to face reality.

There's nothing wrong with an economy built on domestic consumption. That's the path developed countries should go instead of investments and export-based. The issue with the US is trade deficit. The macro trend will be that USD will undoubtedly lose its status as the world's reserve currency through the next 10-20 years. The trend has already started with many central banks diversifying their holdings and selling USD. In the meantime, the Asian developing countries are where the real growth will be.