BREAKING NEWS: Dollar loses reserve status to yen & euro

[Random.Capital]

Quote from crash n burn:

money is created out of thin air. it is completely effortless task. as long as the US maintains its economic supremacy the USD is untouchable.

I would put it a little differently. Money is a tangible expression of trust. As long as the US economy is viewed as being a high-powered economy, the dollar will not implode. And the US economy cannot be viewed as anything but that as long as it remains an export sink for the rest of the planet.

It's not just the US that is in a catch-22 here - every heavily-exporting trade partner is as well (and that's everyone that matters).

Co-dependency at its finest...

 

[canuckrookie]

Quote from Random.Capital:

I would put it a little differently. Money is a tangible expression of trust. As long as the US economy is viewed as being a high-powered economy, the dollar will not implode. And the US economy cannot be viewed as anything but that as long as it remains an export sink for the rest of the planet.

It's not just the US that is in a catch-22 here - every heavily-exporting trade partner is as well (and that's everyone that matters).

Co-dependency at its finest...

its a consumer driven economy ie buying everyone elses stuff and that has been fuelled by all sorts of credit, especially the reverse home mortgages and teaser rate cc's. How is the economy supposed to do well when many people have no work, cannot afford their homes or will soon not be able to afford them when their arms reset, or have too much debt and are much more likely to stop spending like they used to, not to mention their purchasing power has gone down considerably ie devaluation of their major assetts coupled with commodity inflation. etc etc etc. We hear all this rosy news of the recovery when all it is is corporations using free money to make more money for themselves, not for the average joe aka consumer. And the list goes on. In the end this will all cumulate into one big filthy mess and guess who gets to clean it up?

 

[cleveland45]

Quote from endsongs:

Lol, Volcker used massive deficit spending, of which not a cent was ever paid for, to create the boom times of the early 80's under Reagan. There is no such thing as a free lunch.

Don't blame Volcker (Carter appointee), the other two branches were responsible.
Similar to Benny's plight today.

 

[trefoil]

What can replace the dollar? Unless and until China removes exchange controls and develops deep and liquid financial markets – probably a generation away – the euro is the dollar’s only serious competitor. At present, 65 per cent of the world’s reserves are in dollars and 25 per cent in euros. Yes, there could be some shift. But it is likely to be slow. The eurozone also has high fiscal deficits and debts. The dollar will exist 30 years from now; the euro’s fate is less certain.

The rumours of the dollar’s death are much exaggerated

 

[sosueme]

I agree, dont give up on US.
With the dollar sinking along with average wage rate falling, US will be back in the race in no time at all.

 

[puretruth]

Quote from wavel:


The USA lost the Vietnam war, and hasn't managed to control a group of rocket launching cave dwellers who don't even have a sturdy pair of boots to wear, for the best part of 10 years.

LMAO

 

[endsongs]

Quote from puretruth:

LMAO

History says wars on two fronts are hard to win. But Bush had to try anyway...

 

[limitdown]

ok, so like, duh....

pricing commodities in the recipients currency, whether RmB's, Yen, Euro's, Marks, has been going on since trade has been established.

pricing crude for translation into other currencies has been done in USD almost since the markets have been established or flourished and two world wars were fought over supplies and access to crude refineries...

so dethroning the USD, is perhaps more perspective and news paper article related than actual...

or are there ceremonies, or agreements from large buyers not to touch the USD in their transactions,

and then, the reserve status is lost?

exactly how does this work?, the loss of reserve status thing?

 

[Debaser82]

Quote from limitdown:



exactly how does this work?, the loss of reserve status thing?

You'll know when you have to pay 10k just for groceries.

Ofcourse the DOW will be at 50000000000 points by then.

Oh and you will see Europeans everywhere buying up all the real estate.

 

[slapshot]

Quote from wavel:



The USA lost the Vietnam war, and hasn't managed to control a group of rocket launching cave dwellers who don't even have a sturdy pair of boots to wear, for the best part of 10 years.

This statement is absurd.

Don't confuse a lack of political will from the actual ability to immediately and harshly destroy a country like Vietnam that was in a civil war. We were trying to help out only 1/2 of the country without slaughtering everyone living there. We could have wiped them all from the face of the earth in about a week if that was the goal.

Same problem in Afganistan. We are trying to surgically defeat a small group, not kill all of their citizens. Completely different ballgame.

In both scenarios, political restraint created the stalemates, not lack of ability or resources to pulverize them into non-existence.