The end of the dollar as we know it — Andy Langenkamp

Just not anytime soon though — although it could happen faster than anyone thinks if conditions change sufficiently enough. Mechanisms are being put in place.

Interesting post, but you probably know most of this already.

The Hill
The end of the dollar as we know it
Andy Langenkamp, Opinion Contributor

Reuters — World needs to end risky reliance on U.S. dollar: BoE's Carney

Bank of England Governor Mark Carney took aim at the U.S. dollar's "destabilizing" role in the world economy on Friday and said central banks might need to join together to create their own replacement reserve currency.…

Boom!!! (Sound of heads exploding.)

Reuters
World needs to end risky reliance on U.S. dollar: BoE's Carney

Writing by William Schomberg; Editing by David Milliken

Martin Armstrong — Will China take over US as the top Superpower

Stories about the imminent replacement of the USD as the global reserve currency abound. In some circles it is the consensus reality. Martin Armstrong sets a questioner straight.

China is on the rise and it will become the financial capital of the world after 2032. However, it has a long way to go. China can price every commodity in yuan and demand all trade deals are in yuan. That still will not displace the dollar. The center core issue behind the dollar ironically in the US National Debt. For now, this is the place institutions can park their money. You can trade in any currency, but where do you park your profits? 

China will displace the USA as the financial capital of the world when (1) people begin to trust China as a place to park money.

Martin Armstrong provides a good answer but surprisingly omits mention that the People's Bank of China still pegs it currency to the American dollar.

Wake me up when China drops the peg.

Armstrong Economics
Will China take over US as the top Superpower
Martin Armstrong

The dollar is toast

The United States has just imposed sanctions on Venezuela because it does not like the outcome of the Venezuelan election. 

That's sanctions on Russia (3 times), Venezuela, Iran, North Korea, Syria and who knows how many other countries. These sanctions are forms of economic warfare. 

Their goal is to lock these countries out of the dollar-based financial system of the world. How long do you think people will continue to want to "net save" in dollars when they are potentially subject to indiscriminate seizure of their assets and blockage of the ability to transact commerce? 

Not long. 

I predict an end to the dollar's role as global reserve currency very quickly. 

The world won't tolerate the risks of net saving in dollars anymore. We have signed our own death warrant here because of our incompetent and clueless moron "leaders." When I am president this will all be reversed.

What f'cking hypocrisy.

Houses and Holes — Do we need one global currency?

Reviving the bancor as a global reserve currency for international trading purposes, proposed by Keynes but rejected by the US at Bretton Woods.

MacroBusiness — Global Macro: Houses and Holes
Do we need one global currency?
Houses and Holes

Liu Chang — Commentary: U.S. fiscal failure warrants a de-Americanized world

Power vacuum developing?

Xinhua English
Commentary: U.S. fiscal failure warrants a de-Americanized world
Xinhua writer Liu Chang

See also Charles Hugh Smith, The Impossibility of China Issuing a Reserve Currency

The question of the RMB becoming a reserve currency boils down to this: does Chine export enough RMB via trade deficits to supply the global economy with sufficient RMB to provide reserves in size and be liquid and stable?

Those answering "yes, China does export enough RMB to act as a reserve currency" have to answer how a nation that imports a net $285 billion a year of other nations' currencies can possibly export enough of its currency to act as a reserve currency.

Lars Schall interviews Chris Cook

The internationally acknowledged energy consultant Chris Cook addresses in this exclusive interview the new IEA report; the pre-dominant factors in the oil market; his version of a commodity-based currency; why an attack on Iran is rather unlikely; and the consequence of a rising oil price for gold.

GoldSwitzerland
THE MATTERHORN INTERVIEW – November 2012: Chris Cook
“The Petrodollar is Either Dead or Dying”
Lars Schall interviews Chris Cook

Garth Brazelton — Global Currency Reserve

I don't understand how some liberal (read: New Keynesian) economists like Stiglitz want to, essentially, create the same conditions that Greece now faces - only on a global scale.

Read it at Reviving Economics
Global Currency Reserve
by Garth Brazelton

Mentions Warren Mosler at the end: "And I happen to think Warren Mosler's idea from a year ago of essentially (and somewhat sneakily) creating a new Greek currency (but not quite) by turning Greek bonds into a form of money (means of payments for public debt - pay your taxes with a bond!) was pure genius."

See also the Wikipedia article on the Bancor global currency proposed by Keynes for some history on the concept.

Oil and Financial Warfare

Flashback to a couple of weeks ago on Cryptogon:

If SWIFT actually pulls the plug, I’d consider the fuse to be lit. Also, if SWIFT does it before 20 March, this is probably the real reason:

Last week, the Tehran Times noted that the Iranian oil bourse will start trading oil in currencies other than the dollar from March 20. This long-planned move is part of President Mahmoud Ahmadinejad’s vision of economic war with the west.

“The dispute over Iran’s nuclear programme is nothing more than a convenient excuse for the US to use threats to protect the ‘reserve currency’ status of the dollar,” the newspaper, which calls itself the voice of the Islamic Revolution, said.SWIFT is going to pull the plug on Iran on 17 March, three days before the opening of the oil bourse.

Via: BBC:Swift, the body that handles global banking transactions, says it will cut Iran’s banks out of the system on Saturday to enforce sanctions.

The move will isolate Iran financially by making it almost impossible for money to flow in and out of the country via official banking channels.

Read it al Peak Oil

Iran Oil Bourse To Open Next Week?

by admin

The US and Western powers can likely win this one, but that only makes the commitment of non-Western powers to escaping the financial stranglehold of the West even stronger. Just as other countries realize that they need a credible (nuclear) deterrent to compete, so too, they need a non-Western reserve currency. This is going to be become an increasingly big push among emerging nations chafing under the Western neoliberal yoke that is the successor to imperialism and colonialism. They see neoliberalism as neo-imperialism and neo-colonialism.

The prevailing view now is that capitalism has won the day. However, there are many forms of capitalism, for example Chinese market socialism is "capitalism with Asian characteristics" Neoliberals insist to the contrary that there is only one capitalism and it is neoliberalism.

This is an emerging trend to watch. it is likely to stand in the way of global cooperation and coordination just when the world most needs recognition of interdependence, shared interests, and an increasingly common future.

Last summer I said a U.S. credit downgrade would NOT result in higher rates!

I did this interview prior to the S&P downgrade of the U.S. last summer and I said that a downgrade WOULD NOT RESULT IN HIGHER U.S. INTEREST RATES!

Mish — Bogus Threats to US Reserve Currency Status

Issuing the world's reserve currency is a mixed blessing. Mish agrees with Michael Pettis that the disadvantages outweigh the advantages and the US should lead the charge away from the dollar as the global reserve currency.

"The reality is the US would be better off (and so would the world), were the US to lose reserve currency status. Nonetheless, don't expect it any time soon. China is not ready and Europe is in the midst of a sovereign debt crisis that will not go away for years."

Read the whole post: Bogus Threats to US Reserve Currency Status: No Country Really Wants It!