otbricki

It's Good to Be the World's Reserve Currency

The EU is not a political union. That is pretty obvious. You will know it is one when France, Germany etc. disband their national armies to form a European army under control of a central European government with the power to levy taxes on its member states and the individual European states recall their ambassadors. Also there will be one seat at the UN for Europe.

Most fiat currencies eventually failing is silly in its obviousness. All currencies eventually fail, fiat or not unless they are based on the actual value of the specie in circulation.

Finally the US is the world reserve currency. It is not based on the fact that it used to be so. It is based on the fact that it is that way now. The world's central banks hold 4 times more dollar than Euro reserves.

The only current possible alternatives have fatal flaws. The Euro is not backed by a sovereign guarantee so it is completely unsuitable. Japan is too small. China is even smaller and does not have a floating exchange rate.

On Jan 21 07:24 PM Alan Tomlinson wrote:

> With respect to your comment: "The Euro is a noble experiment, but
> currency unions that are not political unions don’t typically work.
> Then again, most fiat currencies eventually fail." Do you have any
> evidence at all for these comments or are you just writing? Moreover,
> in what way do you think that the EU is not a political union with
> respect to your comment? You seem to be of the opinion that the US
> dollar is the reserve currency because it was always so. You come
> across as an empty suit to me, but perhaps your ideas in this article
> were much better thought out and nuanced before your editor obliterated
> them.
>
> Cheers,
>
> Alan Tomlinson
>
> P.S. For what it's worth, I use my real name because I think that
> if you lack the conviction to sign your name, your opinion is worthless.

Forget About a V-Shaped Recovery. Maybe a W. Or L. And What About $?

The dollar is still stronger than the currencies it is being compared to. I would expect the dollar to continue to go up as the dust from last week settles.

Gold is so sentiment driven that it is useless as a barometer of real value of a currency. It has no utilitarian value so it is not tied to economic values at all. The survivalists are right. If you really want to hedge buy something that has durable utility.

There is no way I'd buy something as useless as gold.