Posted on 09/08/2004 2:57:31 PM PDT by Fyscat
CHICAGO (CBS.MW) - It would be a slow turn of events, but the U.S. dollar is moving closer to surrendering its status as the world's benchmark currency.
Just as it supplanted the British pound after World War II, the dollar stands to lose its lead position if the United States fails to shrink record trade and budget gaps with dispatch, some analysts argue.
Its natural successor would seem to be the five-year-old euro. Some argue China's expanding global position could vault its currency to lead status. Central banks and multinational corporations might simply hold a mix in their portfolios, forgoing a reserve currency like the dollar that helped build an economic powerhouse.
For now, the dollar is "the reserve currency ... on life-support," says Peter Schiff, chief executive of Euro Pacific Capital, in Newport Beach, Calif.
While the future of global currencies is murky, what is clear is the U.S. must offset its deficits with a $2 billion daily flow of foreign capital. That leaves its economy and currency's buying power up to the whim of foreign investor sentiment.
(Excerpt) Read more at cbs.marketwatch.com ...
Just as it supplanted the British pound after World War II, the dollar stands to lose its lead position if the United States fails to shrink record trade and budget gaps with dispatch, some analysts argue.
The dollar is having a rough patch at the moment, but nothing to compare with the 70s.
The Euro will soon be absorbing a ton of Eastern European economies and will suffer many more structural issues regarding stability.
The renminbi is the currency of an enormous but still Second World economy.
The dollar will continue to be the world's reserve currency for the foreseeable future.
Still pining for the barbarous relic, myself.
I'm positioned for gold to move up - that's for dang sure! ;^)
Sounds like someone bought yuan or Euros and is talking the dollar down hoping to stave off their losses.
Soft patch or rough patch explains everything.
If we all start speaking Fed-speak we'll be happy and our nation's problems will disappear.
I don't buy it either. The EU seems to be in pretty shaky condition these days. France and Germany have unemployment aroud 14 to 15%. This writer is spewing scare tactics: "Get in the EU SOON, or else."
The EU economy is still only a fraction of the economy of the US. It seems to me that this would come under consideration. Over the course of time, would you rather have your house built upon a bunch of loose, shifting pebbles or solid bedrock? Still, I suppose anything is possible.
I can go into detail if you like.
I'll suffice it to say that neither 9/11, two full-scale military operations, near-record high energy prices or the bursting of a speculative internet bubble have been able to break the dollar.
Any other currency would have sustained far more severe damage.
I don't buy it, sorry.
The question is not whether you buy it, rather whether foreign interests will continue to buy it at a rate of $2 billion a day. Even the ocean has a depth to it. 50% of our debt is foreign held.
The day people third world countries prefer their own currency to Yanqui Dollars I'll start worrying about the dollar losing it's benchmark status. As it sits currently the dollar is usuable as currency in more countries than anything else, including the Euro, so I'm not worried.
Here we go again. I'm awaiting the obligatory FReeper post that talks about the so-called Federal Reserve conspiracy.
Its natural successor would seem to be the five-year-old euro.Yeah. Right. Flat or shrinking European economies. Demographic catastrophe in the form of a rapidly aging workforce and crashing birthrates. Technology sector that's a joke. Manufacturing sector on life-support. Agricultural sector a shambles of welfare-state neo-feudalism. Complete EU disarray as Germany and France run up massive deficits in the teeth of EU austerity measures.
Were we held to the same standards as other countries such as the World Bank definitions for "severely indebted", I believe that we would clearly be candidates for at least a credit review, if not a drop.
Fortunately for us, there is no clear candidate to supplant the dollar.
The euro is stronger than the dollar today, but who knows what it will be a year from now. My nephew is putting all his money into euros based on this rumor, but I think he's taking a big risk.
I never suggested the euro will prevail, as far as the $ losing it's status. Well, it's already started if you look hard enough. An for those who feel this could never possibly happen....... if you want to win a fight, you have to know where it is.
I looked and then verified and continually verify. I can't see holding anything else in the grip of my hand other than gold. All else is either messy or hard to store.
'the only alternative' to paper and a promise. All others are confidence games which I don't care to play with on either side of the fence.
HEY! how come you don't visit us LP ?
Except that we're now a service economy. We no longer have the vast, huge factories churning out goods like TVs, radios, etc.
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