Friday, 2 November 2012

The End of The Dollar as The Reserve Standard Currency

With the sanctions against Iran leading to the development of an oil for gold bartering market, and China and its trading partners continuing to seek out non-dollar payment settlement methods, the possibility of the end of the dollar as the international reserve standard currency; continues to rise.

Many people are unaware that the U.S dollar’s position as the world’s reserve currency is not mandated by any government. Its pre-eminence outside America rests on it being the best option for international transactions. And, once a competing currency becomes preferable for exchanges, international firms and other governments will move on; and it will be the end of the dollar as the reserve standard currency.

For the moment, the good news for the American dollar is that the Chinese yuan is not yet widely accepted and suffers from higher inflation, reducing its usefulness. But a shift in the world’s reserve currency, could be swifter than many investors, analysts and economists think. However until such time, the impact of inflation on currencies will be different among different economies, and investors must make investments that protect against inflation; when planning to save money for the future.

No comments:

Post a Comment