The U.S. dollar has been the global reserve currency for many years.  This was offered the advantage of a relatively stable monetary system for the U.S.  However, the U.S. is pissing this all away with its irresponsible fiscal policies.

As the U.S. continues to print more and more money, it will stress other countries in the world into buying U.S. dollars.  Countries need to buy our dollars because it is the reserve currencies and products, like oil, are  priced in U.S. dollars.

It is surprising that Opec did not dump pricing oil in U.S. dollars for something else — perhaps the Japanese Yen or Euro.  Probably because the Bush administration was considered war mongers and would just invade other countries. If Opec did price oil in something other than U.S. dollars, the U.S. dollar would crash as the world started selling dollars, by the boat load.

It seems virtually certain that the U.S. dollar cannot sustain being the reserve currency with the amount of annual deficits, national debt, and zero interest rates.   Also, now that Republicans are out of office and Democrats are much less interested in oil wars, like Iraq, it might be an excellent time to dump the U.S. dollar.

The dollar has been weaker recently because the Federal Reserve lowered interest rates to zero.  It is impressive that the U.S. dollar has held up as well as it has but this is only because oil and other commodities are priced in U.S. dollars.  The world is just not going to be able to take pricing critical commodities in an unstable currency for much longer.

If the U.S. dollar stopped being the reserve currency then the U.S. would have to buy, let’s say Euros, in order to buy oil and do international trade.  Meanwhile, the rest of the world would be dumping U.S. dollars in mass.  Even the hint of dumping the U.S. dollar would crush it as investors would dump U.S. dollars.

America is doomed.