Join Date: Oct 2008
Location: , Missouri, USA
The larger question is what would one replace the dollar with? The Euro is struggling due to all the same issues the dollar faces. The Japanese yen has been in stagnation for two decades. The Chinese have funded much of their development on funny money backed by the government; while the "official" debt of China is around 15~20%, many leading banks believe the "hidden" debts underlie a debt ratio of 90~130% of their GNP. So the Chinese are not (despite all the alarmist reports) going to replace the dollar anytime soon either. Russia's economy is based primarily on natural resources (oil, gas, etc) which cannot provide long term stability. The only other economies large enough to even offer an alternative are India or Brazil; both suffer from huge populations that represent huge economic, social, and environmental challenges which will effectively prevent them from growing to a "world" power.
The Europeans probably have the best chance, since they have the political foresight and intestinal fortitude to reduce their debt loads (austerity plans), but as soon as these are achieved two issues come to the fore: first, there will be a strong push to restore many socialist policies, secondly, most European nations have an abundance of political and financial ties to the United States, and therefore have vested interest in keeping the dollar around.
Are there issues with the dollar? Certainly. But while one can easily run around stating the obvious (and get good press), the basic reality is there really isn't a viable alternative around, which is why bankers may hedge - but the dollar will still hold sway.
Not stating this just because I'm on this side of the pond. Just stating economic reality.
1995 Shadow Deluxe 600
1984 Nighthawk 700SC (Tragically Passed On)
1980 Goldwing GL1100
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