I dont buy it. Dollar will be around for a long long time. And it will be a major player for a long time too.
Every country out there wants to export their way back to health. China, the big international heaththrob, has built its economy to export. They link their currency to the Dollar so even though we are falling, they are falling too. Unpeg that and China would get creamed. Wal-Mart/Target prices would shoot up, US consumption of nearly everything would fall (less money to spend after buying necessities will affect everything we buy), and their exports would plummet. They have a very large population to support, and that population needs jobs.
Europe and Japan are no different. Even Toyota is loosing money and crying uncle from the yen exchange rate. Arn’t they suppose to the role model for our crappy us automakers? A plunging dollar would just make that worse, and drag all of Japan down with it.
Plus remember that huge percentages of our ‘Asian’ imports are finished goods. They imported Austrailian iron ore and Middle east oil and south asian plastic pieces and …. to make all those things they send to us. They stop sending to us, they stop buying from them, and that ends the ‘non-US consumer’ thoeory of how we will get out of this.
I agree that internationally leaders are unhappy with the dollar. They need a ‘strong dollar’ to support their politically popular and economically powerful export engines. However, they also dont have a choice in the matter. Europe is PISSED at their exchange rate, and if it gets too much worse will intervine to lower it. China’s currency doesnt float, nuf said till it does. Japan is going into a population, currency, and dept crisis all at the same time. They are more Fraked than we are. Who else is there?
People are stuck with the dollar, and that is just the way it will be for a lot longer than 2010. Just like China is buying treasuries (a loosing proposition right now IMO) they are stuck with the dollar because their PTB are getting rich off the trade system we have. They wont change and risk their fortunes and political systems for their own countries long term good. And the system and power base we have now is priced in ‘strong dollars’.
