The World's Top Currency Faces Competition
"The economic crisis is hurting the world's top currency. But the pound, the yen, the euro, the renminbi, and the IMF's accounting currency are no match for the dollar. At least for now." Click the link below to read the article published in Foreign Affairs Magazine.
"Legions of pundits have argued that the dollar's status as an international currency has been damaged by the great credit crisis of 2007-9 -- and not a few have argued that the injury may prove fatal. The crisis certainly has not made the United States more attractive as a supplier of high-quality financial assets. It would be no surprise if the dysfunctionality of U.S. financial markets diminished the appetite of central banks for U.S. debt securities. A process of financial de-globalization has already begun, and it will mean less foreign financing for the United States' budget and balance-of-payments deficits. Meanwhile, the U.S. government will emit vast quantities of public debt for the foreseeable future. Together, these trends in supply and demand are a recipe for a significantly weaker dollar. And as central banks suffer capital losses on their outstanding dollar reserves, they will start considering alternatives."
The Dollar Dilemma - Foreign Affairs
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