[quote=pri_dk][quote=SD Realtor]You also make it sound like the dollar as the reserved currency for the future is going to happen just because it was in the past. Do you really think that cannot change?[/quote]
Of course anything can change, but it comes down to a basic question that needs to be asked in any analysis:
What are the alternatives?
Yeah, someday there may be another currency that has the characteristics to challenge the dollar as a reserve, but today there is nothing even close. The only alternative that ever seemed likely, the Euro, is on the verge of extinction.
I like Rich’s article and generally agree that the magnitude of the debt will overwhelm all other factors in the long run.
However it is very hard to predict timing, and IMO the “long run” may be very long – long enough to invoke Keynes:
In the long run, we are all dead.[/quote]
The alternative is to not use the dollar as the single reserve currency. A single reserve currency makes things easier, but it’s not required… many countries have already started to set up bilateral agreements to trade in their own currencies.
As for timing, I should clarify that I do have some idea — that it won’t be in the “we’re all dead timeframe.” I’m talking about in the coming years. I simply don’t see it limping along for much longer than, say, 5 years.
Now, will the whole thing start to come undone next month, or will it be 5 years out, or somewhere in between? That’s the part I have no idea about, and despite Domo’s pathetic attempt to make an insult of the fact that nobody can time such things, it’s completely legit to not know, because again: it has to do with psychology, and you can no more predict when the investment herd will change direction than you can time when a shoal of fish will change direction. But you can know when things are reaching the point of inevitability, and I think we are very close (within years).
Hope that clears it up my thinking a bit on the timing question.
