pr in general for the very short term I would agree (but alter) your above statement to read:

“Since the world cannot avoid currency altogether, investors will stay with least risky (internationalized) currency (by a long-shot): The US Dollar”

Once the yuan reaches a certain threshold with regards to internationalization I think the game will change in a big way.

I also think that your argument hinges much more on the present then the future. Yes in the real world AT PRESENT, choices are very limited.

I am not arguing about the present but the future. I would argue that if trends of both the US and China continue at current rates, (which is not going to be the case because our debt servicing burden is non linear) that in the real world the choices will not be limited as they are now.

To me the argument that the investment choices are crappy now and will be crappy in the future doesn’t hold at the rates of change we are encountering.