Credible alternatives are already underway. They are called bilateral trade agreements. Two nations get together and determine to trade with something else. China and Russia are the biggest example of this. China no longer wants to play the dollar game, so it is entering into these agreements with other trading partners. It's like a parallel system that coexists with the current dollar system. If this process continues, it will have negative consequences for the dollar.
What makes you think USD could only be dethroned by an existing circulating currency? And the masses continue to snooze.
Yeah, that was fairly near the low for the dollar. When supermodels and rappers get in on a trend, it's probably getting late in the day. Let's wait for European 'rappers' (lol) to start flashing dollars in their videos, then sell your dollars back and go buy a few castles, villas, and Greek islands for 50 cents on the dollar.
You can't hold savings in a bilateral trade agreement. The Ruble is not a credible currency, no one outside Russia and its borders has even seen a ruble, let alone wants to hold their life savings or do business in it. Ditto for the Yuan. China holds vast quantities of US $ and US Treasuries. So much for abandoning the dollar. Accounting fictions between poor 3rd world countries will have no meaningful impact whatsoever on the price of the greenback.
I do not see this as true under floating exchange rates... They can hold any currency they wish. If they think Euro will go up vs dollar they hold Euro, if they think their currency will go up they seller dollars for their currency.
It is a matter of convenience to have an International common currency for trade. By common factors, it is currently also be the worlds most popular reserve currency. If the Arab states could get their crude oil priced in something other than dollars, that would be a significant.
Obviously you live someplace warm. I often have wondered what the posts on here would have looked like in late 1971 when the dollar went off gold, or late 1979, when gold shot up. Now I know. Just because it looks like doomsday doesn't necessarily mean that it is. Currencies make for great headlines because of all the politics that surround them, but really, how many of you even know that the pound devaluation of November 1967 was at the time thought to be a massive, earth-shattering event? Don't worry if you haven't even heard of it; by November 1968 not even the British were excited about it anymore.
well it started raining so I am back. Its 60 degrees F and rainy in north county San Diego. Since our govt debt has been financed by bonds... The real source of the massive inflation since WWII must has been caused by the Fed debasing our "reserve" currency. correct? I suspect our status as the reserve currency was a major detriment. It allowed the Fed to debase our currency with money supply games. Now I know my statements cause a nasty reflux for anyone reading all these internet newsletter gurus....but all I ask is that one person list positive effects being the reserve currency and how the effects were garnered. for instance... it forced others to do business in dollars. What good is that for americans... so what if they want to hold dollars.... it did not help us americans that the fed accommodated them by massively expanding the money supply. To date... i have only found one positive effect for americans and it seems pretty small relative to our GDP. But, I can think of why causing inflation around the world made the owners of the regional federal reserve very happy.