My comment: One year ago we were excited about the G20 meeting. One of the off-agenda topics was the international standard currency. Many talks held on this topic. One year later there are not any agreement. Well, no formal agreement but one unformal agreement: diversify our foreign reserves. Although the US dollar is the standard tool for trade, it is no longer the standard reserve.
Last quarter it was not the most acquired currency among central banks. India decided to use gold few weeks ago to diversify. Now is Russia turn (1) to announce its plans. The US Fed still calls "US decline orderly" (2). There is a certain point when orderly or chaotic is not a decission, but a collective unspoken sentiment based on panic or in "enough is enough" or "if I do not it now I could be the last dumb in the row" etc. At a certain point what looked like robust building ago now falls as sand. Now, the real risk is not that the US dollar remains the standard reserve currency, I think that time is already gone. Also, the risk is not that the US dollar remains the standard trade currency, I think it is just a matter of time. The risk is that it collapses chaotic before its time becomes a worthless piece of paper. It is a risk because we are not ready for its substitution yet. Its total collapse now would mean a collapse of international trade and therefore a second recession. At least, since several weeks ago we do not hear Mr. Geithner saying his favourite statement "strong dollar is the best interest of Americans". It is a relief, its emptiness was painful. I am sorry for Mr. Geithner, he tied his international credibility to a statement without actions. What to do next? We cannot do much. Accelerate as much as we can the transition toward diversified trade currencies and to hope that US dollar does not collapse completely amid chaos. Peace and best wishes. Xi (1) Russia to Buy Canada Dollars, Mulls More Currencies http://www.bloomberg.com/apps/news?pid=20601087&sid=at5XsdLU.68w&pos=6 (2) Fed Officials Watch Asset Prices for Signs of ‘Excessive Risk’ http://www.bloomberg.com/apps/news?pid=20601087&sid=atWoGngEpam4&pos=3 --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
