ZagnZig

5 Things You Can Bet on Following the Treasury's Plan

Thanks to all who have posted interesting points. I live in Switzerland next to the BIS and whose citizens are very proud of their “safe-haven” status currency. But I have serious questions about reserve currency comments, much as “Smarty_Pants” suggests: “China, Japan, and the Arab states decide to 'diversify' to other currencies as their major reserve” –

But that misses the whole point of the function of a reserve currency. In any and all events, the world MUST have a reserve currency. No? Therefore, many people are commenting about possible ‘diversification alternatives’. But there are no alternatives – and none in the offering in the next decade.

Which currency do you think would arise as a “major reserve” ?
THIS WEEK the worlds central banks desperately needed extra reserves.

Whether you agree or not about the propriety of such actions. consider the $ allocation in last 5 days,
ECB $110B
CHF $27B
GB $40B
CAN $10B
JPN $60B
USA $55B and another $30B to AUS and the Scando countries today.

The point is, there is simply no other currency which could possibly match these amounts to bolster the “reserves” of other central banks. The $ is the reserve by the very fact that it is so readily available and accessible.

The ultimate function of any reserve currency is utility and expedience. It is not necessary any preconceived “value” of that currency in relation to another currency or commodity.

Am I crazy? I am American and deeply sadden by our current problems.