The New York Post is reporting that the Dollar loses reserve status to yen & euro.
Over the last three months, banks put 63 percent of their new cash into euros and yen — not the greenbacks — a nearly complete reversal of the dollar’s onetime dominance for reserves, according to Barclays Capital. The dollar’s share of new cash in the central banks was down to 37 percent — compared with two-thirds a decade ago.
Currently, dollars account for about 62 percent of the currency reserve at central banks — the lowest on record, said the International Monetary Fund.
Bernanke could go down in economic history as the man who killed the greenback on the operating table.
After printing up trillions of new dollars and new bonds to stimulate the US economy, the Federal Reserve chief is now boxed into a corner battling two separate monsters that could devour the economy — ravenous inflation on one hand, and a perilous recession on the other.
“He’s in a crisis worse than the meltdown ever was,” said Peter Schiff, president of Euro Pacific Capital. “I fear that he could be the Fed chairman who brought down the whole thing.”
The dollar is certainly going through a tumultuous time, and it will continue to deteriorate over the next several years. Eventually it may completely collapse and have to be replaced by a new currency. But the dollar has not, I repeat, has not, been replaced as the reserve currency, at least in my view.
The Euro is itself a doomed currency. Central banks may not be printing as many Euros as here — at least not yet. But Europe, especially those countries that lent to Eastern Europe, are leveraged heavily. I suspect the European Union itself will come under serious pressure in the next decade or two, leading to an eventual collapse of the super-state, and subsequently, its currency.
The Japanese also have problems, like being in debt over 150% of their GDP. That’s not a good thing if you are vying to be the new world’s reserve currency, and you have an aging population.
Obviously the US Dollar is a flawed currency, but to suggest it has lost its reserve status is a bit premature. When the middle east is no longer selling oil in dollars, then maybe it has lost reserve status; still even then the dollar may be a co-reserve currency with other currencies for a while, unless a total collapse in value occurs, as mentioned above.
Publisher’s Note: SHTFplan believes a total collapse of the dollar will occur at some point in the next decade, at which point a new world reserve currency or international monetary unit will be probably be needed.