The US dollar...now you see it, now you don't!

Get ready to ride the money wheel my friends...it should be a good one!  Yes, I've been called crazy for telling people that our undisputed world reserve currency is ready to take a back seat to other currencies.  It is a slow and gentle process, but it's happening as we speak.  You see, other countries (primarily China) are getting pissed off paying for two wars and that wonderful bubble Wall Street created (none of which they wanted)... so put on your seat belts and hold on tight!

On Monday, World Bank President Robert Zoellick stunned governments and central bankers by proposing that the G20 consider a radical revamping of the world currency system. He suggested that the role of the dollar as the supreme reserve and trading currency be ended and that it be supplanted by a new system involving the dollar, the euro, the yen and the Chinese renminbi. He further proposed that the new structure use gold as an indicator of currency values. This was a tacit acknowledgement that the system that has prevailed for the past 65 years is no longer viable and that there is no national currency that can replace the dollar as a world reserve currency. The near-zero interest rate policy of the US Federal Reserve has flooded financial markets with cheap dollars, resulting in a staggering decline in the value of the dollar on world currency markets. The dollar has fallen by 13 percent against the Japanese yen so far this year. Just since last June, it has dropped 18 percent versus the euro. Weighed against a basket of currencies, the dollar is down 8 percent since late August.

The starkest expression of the erosion of confidence in the dollar and the existing currency system is the explosive rise in the price of gold. This week, gold futures hit an all-time high of over $1,420 an ounce. The precious metal has risen 28 percent this year. The precipitous fall in the dollar is fueling a general surge in commodity prices, including copper, oil, corn and other foodstuffs.


The Bank of China, one of the country’s main state owned lenders, is allowing American customers to open accounts and trade US dollars for the Chinese Yuan each year. Account holders can exchange up to $20,000 annually. Experts say China’s currency is likely to go up, as the country remains a manufacturing powerhouse. China, the world’s largest exporter, has been coasting with an enormous trade and budget surplus.This, as the US is barely treading, down by a crushing 14-trillion dollar national debt. "The Chinese have been saving and investing over ercent of their income and the United States has been saving and investing two percent of our income. We've been borrowing and consuming. They've been saving and investing,” said Jim Rogers, Quantum Fund Co-Founder & Author.

Please be sure to keep us informed of your future currency...
we are still undecided...

Links:
http://rt.com/usa/news/usa-china-dollar-yuan-banking/
http://www.wsws.org/articles/2010/nov2010/econ-n11.shtml