My scenario is that the Bretton woods will end, and most
currencies will float, with USD in reserves being replaced by a
basket, but what do I know? Essentially a continuation of the
current trend, with USD taking share more in proportion to
its global economic output, perhaps, dipping quite a bit
in the red first on the global disgust with it. Does it really
matter in a floating world if oil trades in USD, Euro, Aud, or
Chinese Yuan? What they are hoarding is what matters. Gold
standard will not rise from the dead, since printing is an
effective policy tool. USD share in global trade is definitely
set to decline.
FWIW, I really don't expect anything drastic. USD will keep
declining long term, perhaps, hitting 60, perhaps, 50 or even 40
(less likely) at the bottom as manufacturing starts to come back
to USA. Unless of course ... they screw up with the liquidity
mop up thingy, cause then it's going to zero -g-
This economic crisis is very serious, and any additional
screw-ups (in addition to what AG has done already) will be costly. |
