Wednesday, October 10, 2012

The dollar’s days as reserve currency are numbered

Deficit spending, hogs at the trough, public pensions out of control--where does it all lead? Those "public servants" who have led us down this path have NO idea of the pain yet to come as a result of their greed, gluttony, and irresponsibility:

The dollar’s days as reserve currency are numbered - "For the US not to address its looming fiscal challenges would be more alarming still. America may not be at risk of default, because the Fed is there to backstop the market in Treasuries. But if the current situation persists, America’s sovereign obligations will not hold their value indefinitely. And if they fail to hold their value, they will not hold investors’ confidence. If they no longer offer the safety that investors have come to expect, they will not function as the stable collateral required by bank funding markets. They will not be regarded as an attractive form in which to hold international reserves. And they will not be seen as a convenient vehicle for merchandise transactions. A serious shortage of international liquidity would spell the end of globalisation as we know it. International financial and merchandise transactions would become more expensive. Without an attractive means to hold the reserves they need to intervene in international markets, central banks and governments would be reluctant to give those markets free rein. Controls would become widespread."


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