Yes, but a year ago many people thought of the euro as the anti-dollar play. It was the Big Dog compared to the King Dollar. In only a years time and with one minor country in europe having problems the euro looks a lot different. My point is the dollar is on top now but it could change in a hurry. Money moves around the world in an instant these days and if everybody tries to get out of the exit door at the same time it could be a problem.
Exactly. Instability. Quick rise, quick fall, no track record. Not in a hurry. The dollar has been the standard international currency for an awfully long time. It has stability--not just the currency, but the nation that's backing it. It's why nobody is going to get rid of all their dollars. It's not going to suddenly collapse. Especially with no real alternate contender out there. The US is the nation least likely to disappear for the foreseeable future and beyond. Theoretically. But in fact, it can't happen. everybody holds too many dollars and the economies are interlaced.
I agree that everyone has too many dollars. It's overbought and eventually the FED's easy money policy will result in too many dollars on the market and no more buyers. At that point the dollars value will have to go down relative to other currencies or commodities or something. When everyone sees the value of their dollars going down they will want to unload them for anything that will hold its value............gold, oil, land, another currency maybe. I would compare your argument to those that said real estate always goes up. Yeah, it did always go up. Until it started going down and it keeps going down with no end in sight. Just because things have worked a certain way so far doesn't mean it has to stay that way. Especially if it is to the advantage of our competitors.....and it will be in the future. The dollar is an example of US global hegemony and that is coming to an end. With it goes the dollar.
Only if there are buyers. These things are self correcting. I didn't say that the dollar would never fall or rise in value, it can. What I said was that the dollar is likely to remain the standard international currency because it is the only currency stable enough and in widespread use to be valuable to international trade. You still don't get it. The fluctuations in price has nothing to do with the stability of the dollar. You sound like a Chinaman. The US hasn't gone around the world forcing people to trade in dollars. International trade has flocked to the dollar for the obvious reasons--it is safer and more profitable in the long run. Foreign investments in America are huge . . . for the same reason. International investors and businessmen do not want to see the dollar collapse, they have too much riding on it. They have for many decades because it is has always been the least likely to collaspe.
I agree with most of what you are saying but you are talking about the past. It has been more profitable for foreigners to hold dollars in the past. What I'm saying is the it will not remain so in the future. The reserve currency has to be seen as a store of value....if it steadily loses value then at some point it will be more profitable to buy something else. Either these SDRs or gold or land or factories or something. And my point of view has nothing to do with what country I am from and it certainly doesn't reflect any anti-American sentiment. I just think that the other countries involved in the global economy have their own best interests at heart and will act accordingly. They are as profit driven as the rest of us.
But why? I think that the past is the key to the future. Basing predictions on known history and known situations makes more sense to me that fearing what the future might hold. Amigo, land will never be an international currency . . . it is not mobile. Gold never will be currency again, because there is more value on the planet than there is gold to back it up.
Because the dollar as reserve currency is a function of america's global position. We have been the Alpha dog since WWII but will not be able to hold that position indefinitely. Regarding land, I am aware that it is not exactly liquid....my point is only that those with money to invest will naturally seek a store of value. Tangible assets will win out over fiat currency as a store of value. If I had to guess I would say they will move to the SDRs and provide the UN with more clout in the global arena. You have to agree that the US as global hegemon is coming to an end in our lifetimes. There is no way to avoid it unless we start tossing nuclear weapons around which is nobody's best interest.
I don't agree in the least and I don;t think you can make the case. Who is going to be the next superpower? China? Give me a break. Russia? Not a chance. The US still militarily controls all of the oceans, most of the airspace and all of orbital space on this planet. We still have the world largest economy and the most stable government.
