Monday, 14 October 2013

Bye bye dollar, bye bye US power

The Telegraph do "the end of the dollar".  China's mention of "de-Amercianization" of the global economy has got the media hacks running for their history books.

A glance at those same books will reveal that the Portuguese, Spanish and British managed about as long as the dollar has managed to eek out. 

It looks the Dollar's time in the sun could be up.

So what is the solution - that will be a later post but China's ever increasing pile of gold may hold a clue.

 The sun is setting on dollar supremacy, and with it, American power [Telegraph]

All great empires – from the Greek, to the Roman, the Spanish and the British - have at their heart a dominant means of exchange which is very much part of their political and social hegemony. Once upon a time, it was Roman coinage which was the world's pre-eminent currency. In more recent times it was the British pound. Today, it's the US dollar to which international investors flock as a safe haven for their money. Highly liquid and apparently reliable – until recently at least – nothing else comes even remotely close to the greenback's dominant position in the international monetary system.
 Yet rarely before has international dissatisfaction with the dollar's role as reserve currency to the world been as great as it is now. The most visible anger comes from China, with more than $3 trillion of dollar foreign exchange reserves, $1.3 trillion of them held in US Treasuries. For ordinary Chinese, it has come as a revelation to discover they own so much American debt. That they own it in a country which because of political brinkmanship may actually default has provoked understandable fury. 

"It is perhaps a good time for the befuddled world to start considering building a de-Americanised world", China's official government news agency has said.

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