The only viable future alternative is the Chinese Yuan.
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I agree, but think that a basket of currencies and precious metals will be a more likely scenario than a single currency. There is still very much distrust of the yuan, but with China's increasing economic dominance, trade in yuan will increase. There have already been many reports of China getting oil from Russia in return for non US$ credit, and there was some sort of barter agreement with I think Venezuela.Possibly a commodity backed basket or grouping of sounder currencies will replace the dollar over the next 20 or so years and following that the Yuan becomes the dominant currency.
A global reserve currency has to be backed by solid fundamentals so the dollar or euro have no chance over the long term. It won't happen over night but a gradual decline of power. There are already discussions of the likes of China and Russia doing trade outside of the dollar. Hong Kong is stepping up use of the Yuan for international trade.
Actually, all fiat currencies are in decline, but they are in decline at different paces. The most vulnerable are £, US$ and €. The levels of debts in the countries and regions is not manageable and not sustainable.The Euro is not in decline.
Several countries have lived well beyond their means - this is being rebalanced.
Greece was a poison pill a bit like the sub-prime mortgages designed to limit European cohesion.
In among your well-worded post you seem to not notice the fact that so-called "world-reserve" currencies are entirely relative.
They are held in place by overt and covert means, the removal of any of of which will destablise the currency. Traders don't want stable currencies. They want instability that they create and control, the better to anticipate and exploit the price differentials this creates in both the currency and commodities markets.
The game hasn't been played on a level playing field between governments and banks since Rothschild supported the Bank of England.
From: http://en.wikipedia.org/wiki/Rothschild_banking_family_of_England
"N M Rothschild & Sons financial strength in the City of London became such that by 1825-26, the bank was able to supply enough coin to the Bank of England to enable it to avert a liquidity crisis."
Now the traders control the price of any items on the world market - currency or commodities simply by trading amongst themselves.The fractional reserve banking system is a means to create wealth out of nothing according to banking agreed rules,.
Traders affect price by creating artificial demand peaks for currencies and commodities.
The recent rise in the price of oil was a good example of this, cited elsewhere in AAM on a thread last month IIRC.
Great post, especially the above part. I live in hope but prepare for the worst.Hopefully the world will agree to put in place a stable and truely global currency (ie gold) instead but I wouldn't bet on it.
Hi Chris,
Credit where its due, the piece you quoted was from post #9 by ringledman and not me, onq.
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