delta 777

Falling Dollar: Finally Front-Page News

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Bretton Woods established an international monetary system tied to gold.
Following WWII, US had the most stable currency which became the world's reserve currency. In 1971 the US unilaterally terminated gold convertibility thereby changing the dollar from a specie currency to a fiat currency. nonetheless still remaining as the accepted reserve currency because of the balkanization and instability of other nations and currencies.
This placed the US in the unique position of being able to simply print money (backed by "full faith and credit") to cover its debts.
The world has since changed--currently. other nations, particularly the EU and China. "BRIC", are showing enough political and economic strength to make their currencies strong enough to be considered for an international "market basket" reserve currency.
It is no surprise that world nations will no longer put up with the current US reserve currency situation.
Nor should they.
The more telling question is what specific tactic large creditor nations (particularly China) will employ to carefully bail out of the dollar and convert to a more stable and acceptable form of internal reserve currency without overly devaluating their dollar denominated assets.
It appears to me that the day of reckoning for the world US dollar is very much upon us.