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Is the US dollar losing its global currency statute?
US Courts are sanctioning foreign banks that use the US dollar in
operations not matching the US policy. Is this political intrusion in the
free use of that currency another bullet in the dollar's own foot?
How will foreign countries with huge dollar reserves react to a biased
currency that cannot be used freely? What currencies will now be used
in financial and commodity transactions, quotations and settlements?
This legal-political intrusion is far from being the only dent in the US dollar
global statute. Can a currency issued unilaterally by a country in its own
interest survive as the currency for most international transactions?
Many countries in other parts of the world claim now that this primacy
builds economic instabilities and distorsions (exchange rates,
trade balances, financial and real assets speculations)
The issue goes further than just an asymetric economic advantage
More crucial is the fact that US budgetary and monetary policies
create most of the time based an excessive mass of dollars.
This overflow of global liquidities explains various recents and ongoing
bubbles and krachs The Gresham law is at work : bad money drives out
the good; as the value of those dollars is doubtful, they circulate full speed
to get rid of them .
What can the US do to reestablish some trust ?
More important, how can the world build a true global monetary system ?
For a trusted global monetary system
@Anjaree. Now if you add god-given arrogance...
Unless you are joking, of course ;-)
1 個解答
- 匿名7 年前
No, and never. Because the US court can still have the power to tell other countries to do what it wants. Even the international court cannot do that. It does not care even what the IMF has said. That is the real power of the dollar.In God can we trust.