The age of the dollar is drawing to a close Right from the start of the financial crisis, it was apparent that one of its biggest long-term casualties would be the mighty dollar, and with it, very possibly, American economic hegemony. As we now know, dollar hegemony was itself a major cause of both the imbalances and the crisis, for it allowed more or less unbounded borrowing by the US from the rest of the world, at very favourable rates. But America has squandered this advantage on credit-fuelled spending; with the developing world expected to represent more than half of the global economy within five years, dollar hegemony no longer makes any sense. The rest of the world is now openly questioning the merits of a global currency whose value is governed by America's perceived domestic needs, while the growth that once underpinned confidence in its ability to repay its debts has never looked more fragile. Already, there are calls for alternatives. Unwilling to wait for one, the world's central banks are beginning to diversify their currency reserves. This, in turn, will eventually exert its own form of market discipline on the US, whose ability to soak the rest of the world by issuing ever more greenbacks will be correspondingly harmed. These are seismic changes, of a type not seen for a generation or more. I hate to end with a clichÃ©, but we do indeed live in interesting times. http://www.telegraph.co.uk/finance/...-age-of-the-dollar-is-drawing-to-a-close.html All things must come to an end. Before that was the pound, now the dollar. We are in the final death throes of the current system. How long before a new one takes hold?