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March 19, 2006

The beginning of the end of dollar hegemony

Article traces the steps from when the US was on the gold standard to when it became the world's paper reserve currency. America is the only country in the world which can export dollars and have foreign banks keep them as reserve currency. This is a major factor accounting for our enormous balance of payments deficits. Simultaneously, oil's denomination in dollars increases world demand for dollars. The scam can't last. Iran has announced the opening of a bourse, in which dollars can traded in euros. If the US succeeds in thwarting Iran, there are sure to be other attempts in the future. More

Posted by Ray Hewitt at March 19, 2006 02:55 PM