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OpEdNews Op Eds    H2'ed 11/26/18

The USA Cedes World Currency Status

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After decades of propping up the biggest welfare nation on the planet (the USA) and allowing it to interfere around the world unchecked and unabated, the rest of the world has decided to move on and leave the US in the history books as just the latest empire that failed.

We have given trillions of tax dollars to other countries over the past few years in an effort to continue the era of free money, but the rest of the world is tiring of our hegemonic foreign policy and misuse of power. China is now creating trading partners that promise to use their currency, the Renminbi. Its One Belt, One Road Initiative is forging new alliances in the rest of Asia, Africa and South America. The European Union, with all its problems, is completely refusing to even entertain the concept of using US dollars in future transactions between its nations.

Now, we have a president who wants to fight the world over trading rules while completely ignoring the fact that we are essentially paying next to nothing for their products already. As The Week pointed out in its article, Dethroning the Dollar, from March of 2018, --one reason America runs persistent trade deficits is that the U.S. dollar is in high demand. This drives up the value of our currency, making our exports more expensive. And one reason the U.S. dollar is in high demand is that it serves as the world's premiere reserve currency. So to get the sort of trade relationships Trump wants, the U.S. dollar might have to be kicked from its throne.

"How could that happen?"

The dollar's days as the world's most important currency are numbered!

Quartz' article, The Dollar Days as the World's Most Important Currency Are Numbered, published on December 11, 2017, states, -- it is the second half of the 20th century that is the anomaly, when an absence of alternatives allowed the dollar to come closer to monopolizing this international currency role," according to a Princeton book, How Global Currencies Work, Past, Present and Future published that same month. When asked by Quartz what would happen if the US Treasury Bonds lost their stature as a safe haven for money, the author of the book, Barry Eichengreen, said that it would lead to a liquidity shortage around the world, a dire situation.

He went on to say, "If you'd asked me two years ago, I would have attached quite a low probability to that happening. But I think with Trump's election we have had to consider more seriously the tail events that we might otherwise have neglected.". if there is some kind of policy shock, which could be financial, or it could be the failure of the US Congress to raise the debt ceiling, or it could be a trade war, then I think it's possible to imagine things suddenly changing."

Pretty soon, the US will be forced to trade in currencies other than the US dollar and, as such, will have to actually produce a saleable product in order to procure said money. When this happens, the American economy will go into hypershock and will be finally forced into budgetary constraints that can't simply resolve themselves with a magical increase in our debt ceiling. No more free wars. No more government subsidies of major exporting industries that destroy markets in other countries.

This means no more Military Industrial Complex making armament we'll never use for armies we'll never have. No more American "aid" in the form of MIC subsidies to foreign countries on the shoulders of the American taxpayer, in order to pay for their costly and deadly products in the hands of tinpot dictators who are nothing more than American puppets. No more one-sided trade agreements that allow the US to rape and pillage other economies while subsidizing America 's own bloated industries.

South Americans are already hep to this concept and have started their own bank, Banco del Sur, and internal market, Mercosur. There are loads of talks between African states and China. And the continuing wars in Iraq and Afghanistan, with their corresponding billions of dollars of hidden lost funds, will become too costly to hide. What do we do with illegal wars after they become too expensive to ignore?

The US Dollar is arriving at its universal end. The world is tired of refinancing America's hegemonic foreign policy. They have had enough of our desire to intervene in the internal affairs of other nations. They have already mapped a course out of Dollarville and will soon leave the US Dollar to flounder under its own bloated weight.

And when Americans need to produce and sell their products in Chinese Renminbi in order to be able to buy from other nations in Chinese Renminbi, they will finally understand how the rest of the world felt when the US threw its weight around.

That world seems to be right around the corner.

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66 year old Californian-born and bred male - I've lived in four different countries, USA, Switzerland, Mexico, Venezuela, and currently live in the Dominican Republic - speak three languages fluently, English, French, Spanish - have worked as a (more...)
 

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