When did 0bama take office? 2008?
The FED's QE*'s were an attempt to keep the US Dollar down. It worked, they stopped in Q4 of 2014 and this is the result.
Now add that the EU is entering a massive QE program of their own.
Posted on 03/10/2015 9:07:39 AM PDT by Olog-hai
Currency wars and the growing trend away from dollar dominance in international finance, particularly in emerging markets, was highlighted in an interesting CNBC article this morning entitled “Is the Dollar Losing its Clout Among EMs?” It refers to the deliberate and stated policy of “de-dollarization” around the world, the decline in the use of the dollar in international trade and as a reserve currency, and the emergence of the new BRICS bank.
The article quotes best-selling author and Pentagon insider, Jim Rickards. Rickards says that the status of the dollar as a reserve currency is still solid despite its decline over the past decade and despite the rise of other currencies in international transactions.
“The dollar is declining as a trade currency, but it remains strong as a reserve currency. Right now, it’s around 61 percent of global reserves, versus 70 percent over a decade ago” he said. […]
Last month the Deputy Managing Director of the IMF, Japan’s Naoyuki Shinohara, openly stated that emerging markets in Asia should begin the process of de-dollarization “to mitigate against external shocks and constraining the central bank’s ability as lender of last resort.” …
(Excerpt) Read more at goldcore.com ...
If the dollar as reserve currency declines, then it means more debt-monetization by the FED to keep Fed.gov running.
Chinese ambitions in this area are clear, however. China is negotiating currency settlement deals in local yuan with many of its trading partners. Zero Hedge ran an article last week on a billboard advertisement in Bangkok from the Bank of China declaring the RMB to be “the world currency”. …All according to plan, looks like.
With the dollar gaining strength over the last few months, this article appears weak. As the global economy struggles, people rush to the safety of the US dollar.
Moreover, although China and Russia and other countries may make bilateral currency deals and gain greater use as a trade currency, they shun reserve currency status because it would be an impediment to setting their currency values to maximize their national economic output. If the renminbi were a reserve currency, China would no longer be able to use its cheap currency to boost exports and domestic employment, which are critical elements of the regime's survival strategy. Similarly, if the ruble were a reserve currency, Russia would be unable to calibrate its currency to reflect oil price fluctuations and protect its domestic economy.
The dollar will endure as the world's reserve currency, backed by international institutions, US military power, and the US willingness to backstop allied currencies and economies with dollar lending as needed. Other currencies will emerge as more or less useful as trade currencies and sometimes as stores of value, but SDRs will prove useless as hedges against general inflation or deflation.
The dollar is only rising in comparison to other currencies. I wouldn’t exactly call our dollar safe. Trillions of dollars in debt and Obama getting us more in debt spending on illegals, obamacare, etc. Most of the new jobs here is flipping burgers; not a lot of tax revenue there, unless of course they mandate the pay to $15 per hour. Other good sources of gov’t income is cap and trade and so many regulations that everyone has to pay fines for something.
That’s a lot of faith in Obama’s ability to maintain the dollar’s status when it’s been steadily declining under him.
So Obama is not characterized by abrupt and troubling changes in economic policy, and a trend away from transparency? or for that matter, military weakening?
That’s also too much faith in “international institutions”, which have been leading the march away from the dollar.
I’m not arguing that the US dollar is not being eroded, thats a given. My point is other economies are in as bad a shape, or are not large enough to stand up against the dollar. In a respect, we win by default.
BTW, I am sure that prior to World War II, Britons thought that the pound sterling would endure as the world’s reserve currency as well.
But all is well now that the Saudis and the Obama Administration have bankrolled the heroic ISIS to save the rickety US petrodollar from the nefarious Iranian/Russian Axis of Doom.
That’s a false argument. There is no way to predict the fortunes of the future based on the past. And Obama, along with his GOP-e minions, are not contributing to stopping the dollar’s erosion but exacerbating it.
...That’s a false argument...
No it’s a current fact. No one can predict the future, but to take advice from someone with an inherent stake in having the dollar tank (pushing gold) is a foolish way to handle your money.
....I am sure that prior to World War II, Britons thought that the pound sterling would endure as the world’s reserve currency as well.......
Actually their decline started with WW1, which was a costly war to prosecute, and WW2, finished off the pound with the demise of the British empire.
When did 0bama take office? 2008?
The FED's QE*'s were an attempt to keep the US Dollar down. It worked, they stopped in Q4 of 2014 and this is the result.
Now add that the EU is entering a massive QE program of their own.
The measures are relative to other nations, and on that basis, the US is far better than China, Russia, and the EU.
Is that adjusted for inflation?
They’ll tell us that the ever-important bad deal with Iran is part of that too.
Actually, what happened was that Britain’s role in the world and the sterling were supplanted by a larger and more powerful country and currency — the US and the dollar. In addition, after WW I, Britain disastrously returned to the gold standard at a value that aimed at protecting accumulated financial wealth but that its economy could not sustain. The result was continuing weakness in business activity and employment that evoked additional pressures against the sterling.
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