Capitol Hill Blue Forums Political Issues Finance, the economy & Economics How will the financial crisis develop?

Somewhat surprisngly, I think I agree with you. Whether that pivotal moment come now, or two years from now, it is IMO inevitable.

The economic structure of the world economy was more or less based upon the US dollar. Which made sinse after WWII because the USA was far and away the predominant economy and there was no other source of liquidity for world trade. Because the US dollar was basically the accepeted international currency of exchange... we were able to... required to print up a money supply that would support this function of international global exchange.

But several realities have shifted. IE the USA is no longer such a predominant economy (as compared to rising Europe and Asia). And the current econmoic crisis has forced us to manipulate our currency in a way that is not acceptqable to people who are using the dollar for the purpose of international exchange. And so, sooner or later, the dollar will lose it's role as the defacto unit of international exchange. And when that happens, there will be less need for all the dollar reserves that were pumped into the world economy. And, at that point, the chickens will come home to roost.