The Dollar’s Reign Has Come to an End - L'Express, France

Our country's economy is being propped up by the loans made to us by China and a few others. China has been quietly and, so far, carefully letting the dollar fall because they have so many of them. But, they are spending those dollars while they're still "strong". At best, they will continue to protect the dollar, and our economy, in their own interests. At worst, they, and our other creditors, will pull the plug.


http://watchingamerica.com/News/29198/the-dollars-reign-has-come-to-an-end/

The early warning signs weren’t taken seriously. In March, the head of the central bank in China proposed replacing the dollar - the reserve currency - with a basket of currencies. In May, China and Brazil announced that they would now avoid the greenback in international trade. The revolt is brewing against the American currency, seen as doomed to fall. From now on, the United States will have such debt, that balancing the world economy through recovery in exports assumes a lowering of the dollar. China, holding 2,000 billion dollars in reserves, doesn’t want to find itself stuck with monkey money!

A monetary system always leads to struggle: between borrowers, who wish for inflation (it diminishes their debt); and lenders, who want a strong currency. Yet history has shown that lending nations always end up setting the game rules. Some empires are dying! Today, we are at a historical crossroads: a new monetary world order is going to be born.

For a century, we have known three such events. Until 1944, the monetary system was regulated by the gold standard. Then the dollar standard followed, born of the Bretton Woods Accords. This led to the United States' rise to power, and Europe’s turn as debtor. Finally, we entered the era of floating exchange - when the United States decided to uncouple the greenback from its gold value. The dollar remained the standard, with the yen and the mark; then with the euro, by way of puny alternatives. But if the system has endured up until now, keys to its success - the accession of China and the bankrolling of petroleum countries to power by their commercial surplus - also indicate its end.

But what will replace the dollar? Gold, that “savage relic”? That’s a refuge, not a practical currency. The euro? Europe would suffer to stomach the inevitable increase. The SDR (Special Drawing Rights of the IMF), recommended by Joseph Stiglitz or George Soros? They might be too complicated. A definite certainty: China and the other ants have begun to diversify their reserves. And the United States will suffer.

China will lose vast sums of money on its investments it already has in the United States. It will also see its exports to the U.S., which are a huge chunk of GDP, evaporate and U.S. exports to China in the form of capital equipment and medical supplies will look more attractive.

But, they are divesting themselves of the dollar by spending the ones they have while it's still strong by buying up oil contracts, mineral rights, SDRs, and just plain property around the world. Also, they are spending them on infrastructure in China to open up their own domestic markets.

These are things, we can't do, because we're more than broke, we're in debt.

someone (many) are accepting them for payment, even if they already know their value will drop.

So the question is: Why would they (the sellers to China) do that? To buy oil? Guns? Bombs? iPods+iPhones and the like (and sell them)? :shrug: :scared:

Notice the upsurge in oil prices? The Chinese have been buying oil contracts in the middle-east at rock-bottom prices. The Saudis and their neighbors couldn't sell their oil because of the glut. The Chinese have bought years in the future contracts and driven the price up. Same with other natural resources around the world. While other countries in the "west" have been too broke to buy, the Chinese have all those dollars to spend. The countries that sell to them have to prop up their own economies by selling. Which doesn't increase the value of the dollar but decreases it.

and a key profit center for their emergence as the premier first world player.

That's why the dollar had to die.

:tinfoilhat:

And, yeah, I'm serious. I'm adjusting the Renolds rap to get HD reception.

Given our gov'ts actions, inevitable.