The Fallacy of Special Drawing Rights Or BRIC-Specific Currencies Replacing The Dollar Is A Pipe Dream
This is my Twitter-ish post for the day. First of all, I have no vested interest in this holy-war battle of opinions on the dollar. I only care about the data. And as I said before, those seeking to replace the dollar as the world's reserve currency should be careful what they wish for. No one is thinking through the economic ramifications, which are incredibly immense. It would only serve to re-industrialize the United States and destroy the very globalization of America's wealth. Personally, that's fine by me. I would whole heartedly embrace a new medium of exchange for commerce in lieu of the dollar. This would also force our government out of its constant state of meddling in world politics and handing out our money to global cretins and thugs in the games of war and the state. Meddling that is bankrupting our country and government services to its citizens.
I just took a spin around the blogosphere for the first time in a while. Lo and behold I see many of the squirrels have been busy with their nutty hypotheses. BRIC countries replacing the dollar by trading amongst themselves using their own currencies or Special Drawing Rights (SDRs) of the IMF? You have got to be kidding me. Who cares? WHO CARES!
First of all, none of these bloggers have ever heard of IMF special drawing rights until a month or so ago. Now they are out with their batty hypotheses.
The SDR replacing the dollar as the world's new currency? Uh, don't think so. Do you think it really matters that all of these countries are attempting to supplement dollars in their trade? These countries are all going back to the economic Stone Age anyway. They can lob SDRs or Yuan or Rubles or Rupees back and forth all day long. It matters not. Additionally, $300 trillion of debt exists in the global economy. A vast amount of it is dollar denominated. And what may I ask are these debt holders going to use to service that debt? SDRs? Rubles? Yuan? Is that a joke? Excuse me sir but would you take pumpkin seeds in return for my loan payoff?
We could easily see a change in how global commerce is carried out but it surely won't be by using Yuan and it won't be mandated by Russia or China. Nothing will happen without the consent of the United States and Europe. Don't get caught up in the hysteria.
I just took a spin around the blogosphere for the first time in a while. Lo and behold I see many of the squirrels have been busy with their nutty hypotheses. BRIC countries replacing the dollar by trading amongst themselves using their own currencies or Special Drawing Rights (SDRs) of the IMF? You have got to be kidding me. Who cares? WHO CARES!
First of all, none of these bloggers have ever heard of IMF special drawing rights until a month or so ago. Now they are out with their batty hypotheses.
The SDR replacing the dollar as the world's new currency? Uh, don't think so. Do you think it really matters that all of these countries are attempting to supplement dollars in their trade? These countries are all going back to the economic Stone Age anyway. They can lob SDRs or Yuan or Rubles or Rupees back and forth all day long. It matters not. Additionally, $300 trillion of debt exists in the global economy. A vast amount of it is dollar denominated. And what may I ask are these debt holders going to use to service that debt? SDRs? Rubles? Yuan? Is that a joke? Excuse me sir but would you take pumpkin seeds in return for my loan payoff?
We could easily see a change in how global commerce is carried out but it surely won't be by using Yuan and it won't be mandated by Russia or China. Nothing will happen without the consent of the United States and Europe. Don't get caught up in the hysteria.
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