Yes, you can plot things in logarithmic fashion.
However, it's not always justified.
The current World currency system is relatively new
by historic standards. Indeed, a "reserve currency" enjoys
benefits other currencies don't. Despite the Euro, the
global share of the dollar as a reserve currency is still much
higher than in 1995, the previous dollar bottom.
Now we have the Euro. The toughness of Trichet can be
rationalized. The Euro was not introduced with the purpose
of settling European trade, rather, it was introduced to
compete with the dollar as a reserve currency. As such,
trust in reserve currency needs to be built before the
benefits (printing and distributing) can be reaped. However,
eventually this will be done.
The "reserve currency" system is certainly most unfair, as
the country that can print a "reserve currency" enjoys
temporary benefits others don't, such as running a huge current
account deficit for quite some time without seeing a currency
crisis.
My personal opinion is that if the dollar based system
collapses, perhaps, the World will return to more fair
practices, such as the gold standard, but that, of course,
might not happen - having access to the printing press is
too convenient. Nevertheless, a dollar crisis is a
crisis of the global reserve currency, and, by extention,
of the global reserve currency system. Thus, the latter
could collapse.
Note that despite the fact that the gold standard has been
gone for a really long time - perhaps, as long as 70-80 years
(the first "wave"), most Central Banks still hold huge
quantities of gold. |
