The Death of the Dollar?
George Soros says the dollar’s days may be numbered.
Soros also said the U.S. dollar is under selling pressure and may eventually be replaced as a world reserve currency, possibly by the IMF’s Special Drawing Rights, a synthetic currency basket comprised of dollars, euros, yen and sterling.
“I think the dollar is now under question and I think the system will need to be reformed, so that the United States will be subject to the same discipline as is imposed on other countries,” said Soros, whose famous bet against the British pound earned his Quantum Fund $1 billion in 1992. “Being the main issuer of international currency, we have been exempt and we have abused that because we have effectively consumed 6.5 percent more than we have produced. That is now coming to an end.”
It sounds like China is getting sort of sick of holding all those dollars.
China recently proposed greater use of Special Drawing Rights, possibly as an eventual global reserve currency. “In the long run, having an international accounting unit rather than the dollar may, in fact, be to our advantage so we can’t splurge—you know, it felt very good for 25 years but now we are paying a very heavy price,” Soros said.
China is considering completely dumping the dollar.
Communities Begin to Issue Own Currencies
Have you ever heard of a “Detroit Cheer”? How about a “North Carolina Plenty”? A “Massachussetts Berkshare?” These are some of the ersatz currencies that are cropping up around the country.
There are now around 30 U.S. cities and towns where people issue and use local money that is legal, and taxable, tender. Local money is based on the barter principle.
It’s a throwback to the Depression Era.
“We’re a wiped-out small town in America,” Lyle Estill, a participating Pittsboro [North Carolina] businessman, told USA Today. “This will strengthen the local economy. … The nice thing about the Plenty is that it can’t leave here.”
Why is the price of gold going down? Because of the dumping practices of the International Monetary Fund. While the IMF says that
April 2008: IMF Dumps 400 Tons of Gold. April 2009: Talks with G20 to Dump More
there have been no talks on selling more gold than the 400+ metric tons dumped a year ago, the G20 says there have been. On the announcement that there may or may not have been more dumping talks, gold prices dropped 3%.