Perhaps losing the dollar’s reserve currency status wouldn’t be a bad thing for the U.S. From Charles Hugh Smith at oftwominds.com:
Be careful what you wish for, because currencies are not abstractions we ponder, they are commodities that serve real-world functions that place demands on the currency as a mechanism of trade, trust, value and risk.
The current telling of the story of de-dollarization–the replacement of the US dollar as the global economy’s primary reserve currency with a new BRIC (Brazil, Russia, India, China) funded reserve currency–depicts the loss of the reserve currency as a catastrophe that will crush America.
As delightful as this prospect may be to various audiences, once we shift from considering a reserve currency as an abstraction to a mechanism of trade and finance, then another outcome takes shape: supporting a reserve currency is a burden, and lifting that burden from the US will benefit the US and hurt mercantilist exporting nations.
As a bonus, it will also shift the burden of supporting a reserve currency to the BRIC participants, who will then have to do what the US has done for decades:
1. Export their new reserve currency in size by running vast, sustained trade deficits, for the only way a reserve currency can function is there is sufficient quantities of it floating around as a transparently traded, market-priced commodity to grease trade and finance.
STRAIGHT LINE LOGIC 