The very bright guys over at Capital Economics in London have sketched out one of the likeliest scenarios, which is that Greece decides to leave the euro zone, go back to the drachma and default on a large part of its debt. Bad news, but still possible to manage without a global meltdown. So the drachma falls by 50% — yes, there would be chaos in the Greek, and possibly the European, financial system for a time, but Greece would quickly reap the competitive benefits of having a much weaker currency.

The rub is that if the Greek default went reasonably well, a bunch of other countries, like Spain and Portugal, may want to opt to default too. In order to avoid that, say the guys at Capital, the rest of the euro zone is going to need to move very quickly toward a full fiscal and political union. But, as I wrote last summer, there wasn’t enough political will to get all the countries to sign on to such a union in the first place — and that remains just as true today.

Let me be the first to say, "Ha Ha Ha Ha".

10 Reasons Why The Dollar's Reign As The World Reserve Currency Is About To End

March 27, 2012

The U.S. dollar has probably been the closest thing to a true global currency that the world has ever seen. For decades, the use of the U.S. dollar has been absolutely dominant in international trade. This has had tremendous benefits for the U.S. financial system and for U.S. consumers, and it has given the U.S. government tremendous power and influence around the globe.

Today, more than 60 percent of all foreign currency reserves in the world are in U.S. dollars. But there are big changes on the horizon. The mainstream media in the United States has been strangely silent about this, but some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade. There are also some oil-producing nations which have begun selling oil in currencies other than the U.S. dollar, which is a major threat to the petrodollar system which has been in place for nearly four decades. And big international institutions such as the UN and the IMF have even been issuing official reports about the need to move away form the U.S. dollar and toward a new global reserve currency. So the reign of the U.S. dollar as the world reserve currency is definitely being threatened, and the coming shift in international trade is going to have massive implications for the U.S. economy.

A lot of this is being fueled by China. China has the second largest economy on the face of the earth, and the size of the Chinese economy is projected to pass the size of the U.S. economy by 2016. In fact, one economist is even projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.

So China is sitting there and wondering why the U.S. dollar should continue to be so preeminent if the Chinese economy is about to become the number one economy on the planet.

Over the past few years, China and other emerging powers such as Russia have been been quietly making agreements to move away from the U.S. dollar in international trade. The supremacy of the U.S. dollar is not nearly as solid as most Americans believe that it is.

As the U.S. economy continues to fade, it is going to be really hard to argue that the U.S. dollar should continue to function as the primary reserve currency of the world. Things are rapidly changing, and most Americans have no idea where these trends are taking us.

The following are 10 reasons why the reign of the dollar as the world reserve currency is about to come to an end....

#1 China And Japan Are Dumping the U.S. Dollar In Bilateral Trade

A few months ago, the second largest economy on earth (China) and the third largest economy on earth (Japan) struck a deal which will promote the use of their own currencies (rather than the U.S. dollar) when trading with each other. This was an incredibly important agreement that was virtually totally ignored by the U.S. media. The following is from a BBC report about that agreement....

China and Japan have unveiled plans to promote direct exchange of their currencies in a bid to cut costs for companies and boost bilateral trade.

The deal will allow firms to convert the Chinese and Japanese currencies directly into each other.

Currently businesses in both countries need to buy US dollars before converting them into the desired currency, adding extra costs.

#2 The BRICS (Brazil, Russia, India, China, South Africa) Plan To Start Using Their Own Currencies When Trading With Each Other

The BRICS continue to flex their muscles. A new agreement will promote the use of their own national currencies when trading with each other rather than the U.S. dollar. The following is from a news source in India....

The five major emerging economies of BRICS -- Brazil, Russia, India, China and South Africa -- are set to inject greater economic momentum into their grouping by signing two pacts for promoting intra-BRICS trade at the fourth summit of their leaders here Thursday.

The two agreements that will enable credit facility in local currency for businesses of BRICS countries will be signed in the presence of the leaders of the five countries, Sudhir Vyas, secretary (economic relations) in the external affairs ministry, told reporters here.

The pacts are expected to scale up intra-BRICS trade which has been growing at the rate of 28 percent over the last few years, but at $230 billion, remains much below the potential of the five economic powerhouses.

#3 The Russia/China Currency Agreement

Russia and China have been using their own national currencies when trading with each other for more than a year now. Leaders from both Russia and China have been strongly advocating for a new global reserve currency for several years, and both nations seem determined to break the power that the U.S. dollar has over international trade.

#4 The Growing Use Of Chinese Currency In Africa

Who do you think is Africa's biggest trading partner? It isn't the United States. In 2009, China became Africa's biggest trading partner, and China is now aggressively seeking to expand the use of Chinese currency on that continent.

A report from Africa’s largest bank, Standard Bank, recently stated the following....

We expect at least $100 billion (about R768 billion) in Sino-African trade – more than the total bilateral trade between China and Africa in 2010 – to be settled in the renminbi by 2015.

China seems absolutely determined to change the way that international trade is done. At this point, approximately 70,000 Chinese companies are using Chinese currency in cross-border transactions.

#5 The China/United Arab Emirates Deal

China and the United Arab Emirates have agreed to ditch the U.S. dollar and use their own currencies in oil transactions with each other.

The UAE is a fairly small player, but this is definitely a threat to the petrodollar system. What will happen to the petrodollar if other oil producing countries in the Middle East follow suit?

#6 Iran

Iran has been one of the most aggressive nations when it comes to moving away from the U.S. dollar in international trade. For example, it has been reported that India will begin to use gold to buy oil from Iran.

Tensions between the U.S. and Iran are not likely to go away any time soon, and Iran is likely to continue to do what it can to inflict pain on the United States in the financial world.

#7 The China/Saudi Arabia Relationship

Who imports the most oil from Saudi Arabia? It is not the United States. Rather, it is China.

As I wrote about the other day, China imported 1.39 million barrels of oil per day from Saudi Arabia in February, which was a 39 percent increase from one year earlier. Saudi Arabia and China have teamed up to construct a massive new oil refinery in Saudi Arabia, and leaders from both nations have been working to aggressively expand trade between the two nations.

So how long is Saudi Arabia going to stick with the petrodollar if China is their most important customer?

That is a very important question.

#8 The United Nations Has Been Pushing For A New World Reserve Currency

The United Nations has been issuing reports that openly call for an alternative to the U.S. dollar as the reserve currency of the world.

In particular, one UN report envisions "a new global reserve system" in which the U.S. no longer has dominance....

A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency.

#9 The IMF Has Been Pushing For A New World Reserve Currency

The International Monetary Fund has also published a series of reports calling for the U.S. dollar to be replaced as the reserve currency of the world.

In particular, one IMF paper entitled "Reserve Accumulation and International Monetary Stability" that was published a while back actually proposed that a future global currency be named the "Bancor" and that a future global central bank could be put in charge of issuing it....

A global currency, bancor, issued by a global central bank (see Supplement 1, section V) would be designed as a stable store of value that is not tied exclusively to the conditions of any particular economy. As trade and finance continue to grow rapidly and global integration increases, the importance of this broader perspective is expected to continue growing.

#10 Most Of The Rest Of The World Hates The United States

Global sentiment toward the United States has dramatically shifted, and this should not be underestimated.

Decades ago, we were one of the most loved nations on earth.

Now we are one of the most hated.

If you doubt this, just do some international traveling.

Even in Europe (where we are supposed to have friends), Americans are treated like dirt. Many American travelers have resorted to wearing Canadian pins so that they will not be treated like garbage while traveling over there.

If the rest of the world still loved us, they would probably be glad to continue using the U.S. dollar. But because we are now so unpopular, that gives other nations even more incentive to dump the dollar in international trade.

So what will happen if the reign of the U.S. dollar as the world reserve currency comes to an end?

Well, some of the potential effects were described in a recent article by Michael Payne....

The demise of the dollar will also bring radical changes to the American lifestyle. When this economic tsunami hits America, it will make the 2008 recession and its aftermath look like no more than a slight bump in the road. It will bring very undesirable changes to the American lifestyle through massive inflation, high interest rates on mortgages and cars, and substantial increases in the cost of food, clothing and gasoline; it will have a detrimental effect on every aspect of our lives.

Jean, I can find all kinds of crazy shit on the internet. Hell, you can find people that claim that fronce is an honorable ally. You can video of some windbag claiming that Paris liberated itself. I notice you didn't include a source but I suggest you hold your breath waiting for the US to fall. I've been hearing that claptrap for decades, but I guess if you can't address the topic, do your damnedest to change the subject.

PopsFrost wrote:

Jean, I can find all kinds of crazy shit on the internet.

The piece I added was not very structured, but decent with some recent info.

PopsFrost wrote:

Hell, you can find people that claim that fronce is an honorable ally.

Altogether, I'd say yes (but I'll grant you both Mitterrand and Chirac behaved like POS)

PopsFrost wrote:

I suggest you hold your breath waiting for the US to fall.

I oft stated I wish the best to all democracies.

PopsFrost wrote:

I guess if you can't address the topic, do your damnedest to change the subject.

Not changing. Just putting your article in perspective.

.

As I recall, just 25 years ago, it was predicted that we would all be speaking Japanese by now and Tokyo would rule over Washington.

Of course, 50 years ago it was the Soviet economic juggernaut that would dominate the West because a planned economy is sooooo much better than the chaos of free enterprise. They showed us a poster in school of two trains, one bearing Old Glory and another with the hammer and sickle. They Soviet train was about to blow past the fading American train.

LOL

OH geee jenniver unable to come to a euro or chink thread without posting something completly different

theres a real shcoker


and its typical bullshit

Today, more than 60 percent of all foreign currency reserves in the world are in U.S. dollars. But there are big changes on the horizon. The mainstream media in the United States has been strangely silent about this, but some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade. There are also some oil-producing nations which have begun selling oil in currencies other than the U.S. dollar, which is a major threat to the petrodollar system which has been in place for nearly four decades. And big international institutions such as the UN and the IMF have even been issuing official reports about the need to move away form the U.S.

from CNN money , NYT , bloomberg, CBS market watch , WSJ
theyve all covered it . everything thats mentioned .
where does this moron who wrote this come from ? ignorant singabore ?

myself and others have posted or talked about every single thing this retard mentions
its splashed all over the back of the board
from the oil
to japan & china invoicing in their own currencies
to Russia
to Brazil
to hong kong yuan market

poor little jenniver he hates threads like this

cant face em
just cant
never could
its going on for years


next up when the bond bubble finally starts getting close to exploding or deflating big time jenniver and his retarded news clippings will finally take notice and claim everyones been ignoring it.

I think its all got something to do with his mother wearing German combat boots


same ol same old with ignorant douche for years
its the fuckin one note samba

he got it from a site that sells or pushes
Gold Coins
Silver Coins
Emergency Food
Water Filters
Survival Supplies
Military Surplus
Seed Banks

LOL

way to blow jenny

FrogFryer wrote:

OH geee jenniver unable to come to a euro or chink thread without posting something completly different

theres a real shcoker


and its typical bullshit

Today, more than 60 percent of all foreign currency reserves in the world are in U.S. dollars. But there are big changes on the horizon. The mainstream media in the United States has been strangely silent about this, but some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade. There are also some oil-producing nations which have begun selling oil in currencies other than the U.S. dollar, which is a major threat to the petrodollar system which has been in place for nearly four decades. And big international institutions such as the UN and the IMF have even been issuing official reports about the need to move away form the U.S.

from CNN money , NYT , bloomberg, CBS market watch , WSJ
theyve all covered it . everything thats mentioned .
where does this moron who wrote this come from ? ignorant singabore ?

myself and others have posted or talked about every single thing this retard mentions
its splashed all over the back of the board
from the oil
to japan & china invoicing in their own currencies
to Russia
to Brazil
to hong kong yuan market

poor little jenniver he hates threads like this

cant face em
just cant
never could
its going on for years


next up when the bond bubble finally starts getting close to exploding or deflating big time jenniver and his retarded news clippings will finally take notice and claim everyones been ignoring it.

I think its all got something to do with his mother wearing German combat boots


same ol same old with ignorant douche for years
its the fuckin one note samba

Frog you chased poor little jenniver off the thread. It is asking to much of a 13 year old girl to defend that failure that is fronce.

PopsFrost wrote:

As I recall, just 25 years ago, it was predicted that we would all be speaking Japanese by now and Tokyo would rule over Washington.

Are you trying to say you can't distinguish journalistic hype from long term trends by yourself?

FrogFryer wrote:

OH geee jenniver unable to come to a euro or chink thread without posting something completly different

Fryer the retard can't understand that the real issue is what share of reserve currencies.

Because call it euros, francs or mark, currencies will keep their daily use whatever the shape. Got it this time, or do you need color crayons?

FrogFryer wrote:

same ol same old with ignorant douche for years

Ignorant? Look, I don't doubt you can run a business, but don't try assessing who's ignorant or not. Coming from you.. LOL.

FrogFryer wrote:

its the fuckin one note samba

LOL, good chimp, Fryer, good chimp. It's not the first time you recycle my barbs aimed at you on me. 'get in touch with yourself', 'two tone fryer'

But the problem is relevance. Because your post themes are much more limited than mine. You have about four:
* Europe: Economic woes, Euro tumbling
* China: Bad (food/workmanship/education)
* Aiming at the cowboys: bad cops/pedo scouts/underage models
* Fryer, and how great he is ("youre all fuckin retarded the lot of yas")

Have a good day.

.

FrogFryer wrote:

he got it from a site that sells or pushes
Gold Coins
Silver Coins
Emergency Food
Water Filters
Survival Supplies
Military Surplus
Seed Banks

LOL

way to blow jenny

I'd like to see jeanv's cellar bet it full of dry goods and caned foods.

midget tards got dirty rats asshole ,toffu and lemongrass stores in his basement .

croissants make chinks throw up

No one relevant is gonna spend, covet or hoard Chink money.

FrogFryer wrote:

croissants make chinks throw up

Gee, you DO transform your prejudice into Art.


"croissants make chinks throw up". Pure poetry.


Good chimp, Fryer, very creative.

"China and Japan have unveiled plans to promote direct exchange of their currencies in a bid to cut costs for companies and boost bilateral trade.

The deal will allow firms to convert the Chinese and Japanese currencies directly into each other.

Currently businesses in both countries need to buy US dollars before converting them into the desired currency, adding extra costs."


That is the only reason why the Dollar will be used less and less. To cut costs. Why pay a premium if you can trade in your own currency? Business is in the business of making money, not propping up a particular currency. It'll also mean a diminution of the value of other Western currencies as an ever larger share of world economic wealth spreads to the rest of the world. Such is progress. It'll lead to greater economic efficiency and we'll all benefit in the long run.