the demise of the US dollar as the world's reserve currency.Why and what it means to you.

[dixiegrrrrl]

A most excellent article on a major aspect of our continuing collapse.

"For decades the US dollar has been absolutely dominant in international trade, especially in the oil markets. This role has created immense demand for US dollars, and that international demand constitutes a huge part of the dollar's valuation. Not only did the global-currency role add massive value to the dollar, it also created an almost endless pool of demand for US Treasuries as countries around the world sought to maintain stores of petrodollars. The availability of all this credit, denominated in a dollar supported by nothing less than the entirety of global trade, enabled the American federal government to borrow without limit and spend with abandon.

The dominance of the dollar gave the United States incredible power and influence around the world… but the times they are a-changing. As the world's emerging economies gain ever more prominence, the US is losing hold of its position as the world's superpower. Many on the long list of nations that dislike America are pondering ways to reduce American influence in their affairs. Ditching the dollar is a very good start.
In fact, they are doing more than pondering. Over the past few years China and other emerging powers such as Russia have been quietly making agreements to move away from the US dollar in international trade. Several major oil-producing nations have begun selling oil in currencies other than the dollar, and both the United Nations and the International Monetary Fund (IMF) have issued reports arguing for the need to create a new global reserve currency independent of the dollar."
http://www.testosteronepit.com/home/2012/4/28/marin-katusa-so-long-us-dollar.html

article goes on to discuss Iran's role in the dollar/oil problem, and how other countries are seeking alternative forms of petro-currency.
and why this is NOT GOOD at all for us.

[orwell]

1. I'm not sure it actually matters...

...the Fed has just proven that they can buy all the debt we can print and nobody really gives a flying fig.

People need to start studying MMT and its profound implications on the nature of sovereign currency, debt and taxation.

The old models simply don't apply in a fiat money system.

Human misery is built on the slavish worship of antiquated econometric models.

The King is dead....long live the King:

http://neweconomicperspectives.org/p/modern-monetary-theory-primer.html

[patrice]

2. Wondering here if being a rogue nation that starts WARS of choice that killed 250K INNOCENT Iraqis

- AND - charging it, had anything to do with this.

[panopeagenerosa]

3. The dollar..

became the world's reserve currency after WW2 because the US produced everything any other nation could want. We exported oil, food, manufactured goods and medicine at a time when Eurasia was a bomb site.

Now Russia exports the oil, China the manufactured goods, China and India export pharmaceuticals etc.

There is probably a basket of reserve currencies evolving: Rubles for oil, Renminbi for consumer goods and Dollars for food and 'protection'.

Panic if you want to but I'm saving my cold midnight sweats for anthropogenic climate change.

[lunasun]

4. did I read somewhere IMF is thinking of using their own super currency and pushing that?

I bet China wont agree if that is true .........

[dixiegrrrrl]

5. Yep, you did.

A few years back there was talk of a "global currency" and people labled it as woo woo
but now, indeed, IMF has been pushing for a single currency, claiming it will solve all the money issues.
Actually, they call it "special drawing rights" based on a "basket of currencies"
but however you call it, it will, if it gets off the ground, involve debasing someone's currency.

[muriel_volestrangler]

6. Special Drawing Rights have been around for 43 years

http://en.wikipedia.org/wiki/Special_drawing_rights

Please link to "IMF has been pushing for a single currency, claiming it will solve all the money issues" (note: links to WND or similar will get you laughed at). You'll get bonus points for anything pointing to it "debasing someone's currency".

[dixiegrrrrl]

8. Here is the IMF report

http://www.imf.org/external/np/pp/eng/2010/041310.pdf

[muriel_volestrangler]

9. I'm not convinced that backs up your claims

A limitation of the SDR as discussed previously is that it is not
a currency. Both the SDR and SDR-denominated instruments need to be converted
eventually to a national currency for most payments or interventions in foreign exchange
markets, which adds to cumbersome use in transactions.
...
Absent significant monetary instability or an injunction
for use of bancor for the making of an important set of payments (e.g. payment of taxes),
surmounting the barriers to wide acceptance would be a key and perhaps prohibitive
challenge. Moreover, an independent monetary policy constitutes an important instrument for
adjustment when economies do not form an optimal currency area with others. Adoption of a
common currency could limit the scope for adjustment to shocks, and developing alternative
adjustment mechanisms would be a pre-condition for adoption (e.g. greater flexibility of
labor markets) as would mechanisms for fiscal discipline and cooperation. Since a system
with a few currencies competing alongside one another has built in safety valves (in terms of
checks on inflation, for instance; see Rogoff, 2001), it would be essential to construct
governance arrangements that ensure accountability of the bancor-issuing institution while
assuring its independence. These arrangements would also need to be sufficiently flexible
and robust to accommodate differences among adopting members. These considerations and
costs—important as they are—would need to be weighed against the benefits of using a
currency like bancor.

That is not 'IMF has been pushing for a single currency, claiming it will solve all the money issues.
Actually, they call it "special drawing rights" based on a "basket of currencies"'. It's a long-term suggestion (they explicitly describe it as the longest-term idea possible), and is not the SDR either.

[raccoon]

7. Please see also, "China buying oil from Iran with yuan."

Source: BBC
8 May 2012 Last updated at 13:27 GMT

China buying oil from Iran with yuan

China is buying crude oil from Iran using its currency the yuan, an Iranian diplomat has said.

Oil transactions are usually settled in dollars but US sanctions make it difficult for Iran to accept payments in the US currency.

Iran is using the revenue to buy goods and services from China, Mohammed Reza Fayyad, Iran's ambassador to the United Arab Emirates, confirmed.

China is the biggest buyer of Iranian crude oil exports....

http://www.bbc.co.uk/news/business-17988142

(Someone posted this in Foreign Affairs group but there isn't much traffic there.)