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"Roughing" the Dollar. Et tu UN?

The UK Independent story yesterday about secret meetings to move away from USD-based oil trading over the next nine years has been debunked – or at least publicly denied. But now we have the UN piling on, decrying the US’s “privilege” of seigniorage and calling for a “truly global reserve currency”. These folks don’t seem have spent much time on the streets (or even the playground) figuring out how life really works. Here’s an alternative, politically incorrect view:
The US has paid in full for it’s “privilege”. For better or worse (we naively think better), the US won the last big schoolyard brawl (OTCPK:WWII). That development, however distasteful to more refined sensitivities, is how things have worked for the last several millennia. And as we have pointed out, the history of the 20th century suggests little trend improvement in behavior. The US’s “privilege” was further enhanced because of the responsibility that the US has more often than not shown in exercising its “privilege” (i.e. Marshall Plan). Providing liquidity reflected not only US “privilege”, but also some of the competitive advantages of US-style capitalism: rule of law, transparency, free trade and competition. Now the US is not perfect, and through a combination of greed, arrogance, loss of capitalist identity (shouldn't everyone own a house?), and outright obtuseness, it has helped to bring great suffering in recent years. Our only warning is to be very wary of both the abilities and intentions of those clamoring for and offering “change”. Unintended consequences (and hidden intended ones) lurk at every corner, and change never goes as smoothly as advocates say it will.
One ironic issue with US “privilege” is that when the bill for the “privilege” actually comes due, other parties don’t seem to want to “pay” for it. Japanese Finance Minister Fujii was on the tapes again last night warning that Japan would step in to curb further Japanese yen strength. If the Japanese won’t pay to play, what about the Chinese? Or the Europeans? Or perhaps the international community just continues to stuff AUD, CAD and NZD until they blow up like Iceland… We remain of a very dark mood about the prospects for this situation ending well…