By Ambrose Evans-Pritchard in Davos
Last Updated: 11:13AM GMT 29 Jan 2009
For a few dollars less: Vladimir Putin has called for the end of the dollar as the world’s reserve currency. Photo: ASSOCIATED PRESS
“The one reserve currency has become a danger to the world economy: that is now obvious to everybody,” he said in a speech at the World Economic Forum.
It is the first time that a Russian leader has set foot in the sanctum sanctorum of global capitalism at Davos.
Mr Putin said the leading powers should ensure an “irreversible” move towards a system of multiple reserve currencies, questioning the “reliability” of the US dollar as a safe store of value. “The pride of Wall Street investment banks don’t exist any more,” he said.
More writing for the wall…
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Indeed, Aaraya. And Obama’s $800bn stimulus fiasco hasn’t even hit the books yet. Wait until that bomb actually detonates.
I stand by my prediction: by Summer 2009, the U.S. will either (A) radically and dramatically devalue the dollar by 70% or more OR (B) declare bankruptcy (we may try to print money to pay our debts, but since our dollars will not be accepted for those debts the U.S. will become instantly insolvent, which is deadly to a nation that needs to borrow on a daily basis in order to exist). Someone will surely respond to this post with the argument that the U.S. will never go bankrupt because it can simply print money and pay its debts. I disagree, but the point is moot. Under scenario (A) or (B), the standard of living for all Americans is going to be severely reduced on a phenomenal scale, never to return to the level we have enjoyed for the past 25 years. 401Ks will vanish, pensions will disappear, savings will evaporate — all within a matter of months. The Post Office is already discussing cutting back mail delivery to 5 days a week. This is nothing, and it is only the beginning. Wait until millions go without welfare and unemployment checks, or more likely, they will receive checks in dollars so devalued that they will not be able to purchase even 1/2 of what they need to survive. Medical services will be hit hard. Already there are reports of the unemployed and elderly foregoing physicals and even critical procedures and operations. Disease will rear its ugly head.
Most Americans don’t fully understand and appreciate the significance of the dollar death because we’ve never SEEN it before. The idea of a reserve currency is a relatively recent phenomenon, so we have never seen one implode. The coming dollar death will probably one of the most significant events in human history. Never before has one nation gained such control over the entire planet and lost it so fast. We saw what just happened in Iceland, a tiny country with only 200,000 people, whose currency was not used much beyond its own borders.
Now multiply that carnage, misery and unrest by 1500%.
