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5 of 10 Top Economies in the World Drop the Dollar

Posted by on Apr. 3, 2013 at 12:33 AM
  • 9 Replies
  • 294 Total Views

This does not sound good at all. 

5 of 10 Top Economies in the World Drop the Dollar

truther April 2, 2013 0


AP

The U.S Dollar is quickly losing its status as the world reserve currency. Five of the top ten economies in the world, plus a few others, no longer use the dollar as an intermediary currency for trade. This trend poses a huge risk to the dollar and the United States along with it.

5 of 10 Top Economies in the World Drop the Dollar

ZeroHedge points out today that Australia, the world’s 12th-ranked economy, has now joined a growing list of nations that have agreed to bypass the dollar in bilateral trade with China. China, ranked 2nd behind the U.S., also has similar agreements with Japan (3rd), Brazil (6th), India (9th), and Russia (10th).

Although unilateral agreements have been in place for some time between China and the countries listed above, last week the BRICS (Brazil, Russia, India, China and South Africa) agreed to set up a development bank to compete with the IMF, indicating it’s gearing up to compete in a post-dollar world.

Additionally, Brazil, who agreed in principle to drop the dollar with bilateral trade with China some time ago, just made it official with $30 billion in annual currency swaps which will facilitate around 50% of all trade between them.

Besides those agreements with China, some of these nations have made other similar agreements with each other. India and Japan began swapping $15 billion in each other’s currency in 2011 to handle their bilateral trade. And the sanctions against Iran haven’t stopped them from trading oil with China, Russia, and India in anything but the dollar.

Here’s how the current reign of the US dollar compares to previous world reserve currency:


Source

It appears that the dollar is certainly nearing the end of its reign, which could lead to severe economic hardship for the United States.

Dave Hodges writes:

The United States’ good economic fortune is due solely to the fact that world must use the dollar, the Petrodollar if you will, in order to make their nation’s individual oil purchases; this provides the only source of backing for the U.S. dollar that the Federal Reserve requires in order to somewhat sustain our back-breaking debt that the banker-occupied United States government has passed along to the American taxpayer in the form of bailouts.

And Marin Katusa of Casey Research writes:

If the US dollar loses its position as the global reserve currency, the consequences for America are dire. A major portion of the dollar’s valuation stems from its lock on the oil industry – if that monopoly fades, so too will the value of the dollar. Such a major transition in global fiat currency relationships will bode well for some currencies and not so well for others, and the outcomes will be challenging to predict. But there is one outcome that we foresee with certainty: Gold will rise. Uncertainty around paper money always bodes well for gold, and these are uncertain days indeed.

America’s imperialism, combined with its ultra-fiat status of unending debt creation, appears to have created a final downward spiral that has caused many of the top economies to abandon a sinking ship. It might not be too much longer before the rest follow suit. Now might be a great time to consider diversifying into other currencies, and even digital currencies, to mitigate growing losses in the U.S. dollar.


source

by on Apr. 3, 2013 at 12:33 AM
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Replies (1-9):
othermom
by Member on Apr. 4, 2013 at 11:24 AM

That is very scary.

smalltowngal
by Group Owner on Apr. 4, 2013 at 1:31 PM

I wonder how long until the US completely looses reserve currency status. I worry that is the only thing keeping the dollar strong. :/ 

29again
by Member on Apr. 4, 2013 at 11:18 PM

What happens here if the dollar loses it's "status" as the world currency?  Do we all go on as if nothing happened?  Do we start to look/act even more like Greece and Cyprus?  Or something in between?  That is what concerns me.  How am I supposed to react to this?  How does/should this affect me?

othermom
by Member on Apr. 5, 2013 at 11:39 AM

 Very good questions. I am not sure what would do in a situation like that

 

Quoting 29again:

What happens here if the dollar loses it's "status" as the world currency?  Do we all go on as if nothing happened?  Do we start to look/act even more like Greece and Cyprus?  Or something in between?  That is what concerns me.  How am I supposed to react to this?  How does/should this affect me?

 

 

smalltowngal
by Group Owner on Apr. 5, 2013 at 2:45 PM



Quoting 29again:

What happens here if the dollar loses it's "status" as the world currency?  Do we all go on as if nothing happened?  Do we start to look/act even more like Greece and Cyprus?  Or something in between?  That is what concerns me.  How am I supposed to react to this?  How does/should this affect me?


The biggest concern would inflation. 

29again
by Member on Apr. 5, 2013 at 11:09 PM


Quoting smalltowngal:



Quoting 29again:

What happens here if the dollar loses it's "status" as the world currency?  Do we all go on as if nothing happened?  Do we start to look/act even more like Greece and Cyprus?  Or something in between?  That is what concerns me.  How am I supposed to react to this?  How does/should this affect me?


The biggest concern would inflation. 

OK.  Are we talking hyperinflation (like the Weimar Republic) or something a bit less than that? 

smalltowngal
by Group Owner on Apr. 6, 2013 at 10:01 AM



Quoting 29again:


Quoting smalltowngal:



Quoting 29again:

What happens here if the dollar loses it's "status" as the world currency?  Do we all go on as if nothing happened?  Do we start to look/act even more like Greece and Cyprus?  Or something in between?  That is what concerns me.  How am I supposed to react to this?  How does/should this affect me?


The biggest concern would inflation. 

OK.  Are we talking hyperinflation (like the Weimar Republic) or something a bit less than that? 

It is hard to say for sure. Most of the European countries faced higher inflation after WW1. Germany is the one that fell into hyperinflation because it lost the war and had to pay other countries. I think it would be hard for the US to go through hyperinflation for a long time where we have so many things going for us. We have a lot of natural resources, large gold holdings, produce a large part of the world's food. So, there will always be things that other countries want from us.  There is going to hve to be some sort of currency reset. The Fed is buying  large part of our government debt, bank debt and there has even been talk that it's gotten involved some in the stock market. Basically, we're paying for one credit card with another credit card.

The thing keeping us together is Europe is worse. They're doing a different approach though and trying to actually pay off their credit cards. Instead of Cyprus passing private bank debt to their citizens through taxes, the actually bond holders and depositors are the ones that ended up paying. Not nice if you have over 100k Euro in you account, you'll be loosing a big chunk of it but that money wasn't technically insured. 


jesusismyfriend
by on May. 26, 2013 at 5:31 PM
I saw thus coming last year when china and Russia wanted to drop the dollar as the reserve currency. Divided we fall.
stormcris
by Group Admin on Jun. 3, 2013 at 12:03 PM

The prediction is still the collapse

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