@BIG AD if we start to use a basket of currencies and those currencies all are devalued (by 10% for eg.) the ratio stays the same right. but someone like lets says australia which is not part of those basket of currencies (and lets say hasnt devalued their currency)has to change their $ into it will suffer. So in theory those 5-6 countries could make an financial oligarchy and manipulate currencies to make things cheaper for em or more expensive if they wanted to. Am I right? eg that u used USD is 0.66 etc. if US devalues only it lets say drops to 0.59 but if all other countries in the basket drop their currency by 10%; USD goes back to 0.66 as do other currencies go back to thir original amount. So you have a devalued basket of currencies so whn compared to a currency outside of the basket youve been screwed if they get in cahoots and follow same policy
But how is that problematic for Australia when that is the case now with one single currency as the reserve (US$), rather than a number of currencies? Yes, I think your right on this point. Which is precisely why many do not agree with the US having a financial monopoloy on being the reserve currency. They can manipulate their currency to the detriment of all other nations in the world who hold US$ in reserve. And worse, because the US economy is in such dire straits due to its debt, this has a flow on effect to almost every other nation in the world holding US$ as reserves. Wouldn't have been as big a problem if the $US was still backed by gold though before the US "unilaterally" ended that arrangement. And as a consequence, overnight, all the nations of the world who had US$ backed by gold one day, had a lot of coloured paper the next day. I think the idea of a basket of currencies as a reserve currency is meant to water down the dominance of a single country over the others financially. Whether a basket of currencies would work or not, I don't know. But it seems a better deal than the one we currently have which advantages the US at the expense of everyone else.
Well of course you have to get everyone to agree, and lots of countries aren't talking to each other. A few of the muslim states were understandably not too happy trading in US$, especially for their oil. there was talk about going back to the Gold and silver Dinar and Dirahm, standardised by the koran, for trade between member states. A few months of carpet bombing by the USofA seems to have disabused them of the notion. I know it is only a conspiracy theory but apparently Iraq and Libya were very keen to stop trading in US$ and go to standardised gold currency.
Nothing like carpet bombing to get a politician to re-consider a position - provided it hasn't yet been publically announced!!! Sorry, is my cynacism showing again???
@ lucky its problematic for any country to have the reserve currency that is being devalued. SAme like now USD is being devalued its export of inflation from US to us and resto of the world if we are holding USD, so basket of currencies is pretty shit as its still paper
2000: Saddam wanted to trade oil for euros = iraq gets invaded 2011: Gaddafi wanted to trade oil for gold = libya gets invaded I wouldnt be surprised if that was a major reason for the invasions, it would create a knock on effect and the us dollar would be toppled from its perch and that doesnt fit into the bankers plan
I have brought this up on a previous thread here and know that this was no conspiracy theory, Saddam was seriously contemplating trading oil for euros and I commented on a forum at the time of the invasion of Iraq that I thought this could have been one of the reasons for the invasion. If Saddam had been successful, other Arab states would have followed suit, and I believe Russia was also considering it. It could have caused the collapse of the US dollar. If the USA cannot print money to buy oil because the oil producers don't want to be paid in USD any more it would be in big trouble!
If you want to kill off a message, discredit the messenger. Labelling some-one a conspiricy theorist is the equivellent to calling them a nutter and thus in effect negating the message that "nutter" is pushing. Likewise, a conspiricy theory, is an idea that only "nutters" either push or believe in. I for one believe in quite a number of supposed conspiricy theories. Guess that makes me one of the "nutters".
Quote from gold article It is natural for us to assume that the global monetary authorities will agree to a reformation of the monetary system that effectively addresses the mess it is in right now. Certainly we expect the mess to worsen considerably before this is accepted. "After that, who will be responsible for putting it right?What obstacles will they face? Politicians will have to please those who put them in power and cannot act independently of this power base, no matter how necessary a departure may be. It would be political suicide to do anything else a consequence of democracy. Politicians or Monetary Officials likewise will have to ensure they act in the interests of their nation even if it goes against the greater good of the international community. The international pecking order will weigh in to give priority to measures put forward by the most powerful. The battle will likely impact the voting rights in the I.M.F. where the 16.83% of the U.S. the I.M.F. needs an 85% vote to pass any measurewill come under fire and China will be given a share of the voting commensurate with its growing economic power. " All of the above has to be decided before China's request for a new global reserve currency can even be contemplated. A new global reserve currency would require either the diminishing of the dollar's role in the global economy or its removal as its sole reserve currency." http://www.kitco.com/ind/AuthenticMoney/aug122011.html
But what's going to occur to "encourage" that one nation to give up its special status? It sure as hell won't do it voluntarily, and then, only if there is some significant gain to be had.
Austalia would do that for the USA if we could, I reckon, going by our Prime Minister's speech to your congress. It's not us you have to worry about, that's for sure.
I don't think the U.S. will get a choice in the matter. The only reason the USD is world's reserve currency is because the rest of the world agrees to use it as the reserve currency. As soon as everyone decides for themselves not to use the USD, it will lose its reserve status. Currency is a collective delusion that only has value because everyone agrees it has value. The BRICS nations have already taken a step in that direction by agreeing to use their own currencies to trade with each other and as time goes by, more and more counties will start doing the same thing. There is the question of people taking a loss on their USD holdings as people stop using the USD and it loses value, but the flip side to that is that there is a risk it will lose value anyway as the U.S. prints more and more dollars and continues exporting it's debt around the world. At some point, the balance will tip and other countries will lose more by keeping their U.S. dollars than they will by dumping them and using something else.
Or simply declare yourselves bankrupt, for-go on those IOUs, and expect to start again with a clean slate irrespective what the other players think.
