next, the Nobel peace prize?

[vtsnowedin]

The problem is not the US having the dollar but all the other people who have it. It's them who want to keep the dollar going until such times as they can off load their holding, China especially. That's why they are going round the world giving dollars away to build projects to influence governments and also buying up as many hard assets as they can.

If it was just the US who held the dollar it, and the US, would have gone down the drain long ago. Or the US might have been a lot more stingey with its spending and not made war on so many other nations; they wouldn't have had to go into Iraq because Saddam was threatening the dollar hegemony by selling oil for other currencies.

Ken I think you underestimate the size and strength of the USA economy. The holders of US dollars hold them because they are the most likely currency to retain a significant share of value if a world wide economic event occurs.

They hold them because of fear of of an implied and actual military threat by the USA to anyone who dares not to hold them. The dollar used to be backed by gold, but now it is merely backed by men with guns and the fear that engenders. But, times change, eventually, and so does the fear.

Well your National health system ate the British navy and Obama care may well do the same for the US armed forces but don't be too quick to count them out. Any one of several US nuclear submarines are when at sea the third largest nuclear power in the world.
If your an enemy of the USA and you don't know exactly where they ALL are then your in range and at the top of their roast-um list.

[3rdRock]

The problem is not the US having the dollar but all the other people who have it. It's them who want to keep the dollar going until such times as they can off load their holding, China especially. That's why they are going round the world giving dollars away to build projects to influence governments and also buying up as many hard assets as they can.

If it was just the US who held the dollar it, and the US, would have gone down the drain long ago. Or the US might have been a lot more stingey with its spending and not made war on so many other nations; they wouldn't have had to go into Iraq because Saddam was threatening the dollar hegemony by selling oil for other currencies.

Ken I think you underestimate the size and strength of the USA economy. The holders of US dollars hold them because they are the most likely currency to retain a significant share of value if a world wide economic event occurs.

They hold them because of fear of of an implied and actual military threat by the USA to anyone who dares not to hold them. The dollar used to be backed by gold, but now it is merely backed by men with guns and the fear that engenders. But, times change, eventually, and so does the fear.

+1. The dollar bill has only one saving grace. It can be used as a fuel.

[kenneal - lagger]

VT, the US dollar found its place as the world's reserve currency when the US was the world's major exporter of oil. As such, and being also a major exporter of goods, everyone needed to have dollars to trade. The US now doesn't export oil and it is now also a major importer of goods and it prints dollars to fund its massive overdraught. The dollar in everyone else's bank is being devalued on a daily basis by inflation.

The only reason to hold dollars now is that the oil trade is still mainly carried on in dollars. If other countries start trading oil in currencies other than dollars there is no reason for the rest of the world to buy US dollars. The US government would then be unable to fund its annual deficits by printing dollars as it would become massively inflationary at home. The US government would be forced to live within its means to a much greater extent and that would cause chaos in the US and its economy.

What would the US do? Attack the whole of the rest of the world like it attacked Iraq when Saddam offered to take any currency for its oil? It might have to in order to stop revolution at home by diverting attention from massive poverty to "the attack on the US by the rest of the nasty world that will no longer fund the American Way of Life."

[vtsnowedin]

VT, the US dollar found its place as the world's reserve currency when the US was the world's major exporter of oil. As such, and being also a major exporter of goods, everyone needed to have dollars to trade. The US now doesn't export oil and it is now also a major importer of goods and it prints dollars to fund its massive overdraught. The dollar in everyone else's bank is being devalued on a daily basis by inflation.

The only reason to hold dollars now is that the oil trade is still mainly carried on in dollars. If other countries start trading oil in currencies other than dollars there is no reason for the rest of the world to buy US dollars. The US government would then be unable to fund its annual deficits by printing dollars as it would become massively inflationary at home. The US government would be forced to live within its means to a much greater extent and that would cause chaos in the US and its economy.

What would the US do? Attack the whole of the rest of the world like it attacked Iraq when Saddam offered to take any currency for its oil? It might have to in order to stop revolution at home by diverting attention from massive poverty to "the attack on the US by the rest of the nasty world that will no longer fund the American Way of Life."

I'll quibble a bit with that. At the end of WW2 the USA was the clear winner as they alone had escaped the war with it's industry and infrastructure intact. It had the largest Army and Navy and the A-bomb. Europe and Occupied Japan needed American money , material and oil to rebuild. The dollar was the strongest currency on the planet and everybody in the non communist world did a great deal of trade with the USA priced in dollars so it becoming the worlds reserve currency for good reasons, oil being only one of them.

The US now doesn't export oil and it is now also a major importer of goods and it prints dollars to fund its massive overdraught. The dollar in everyone else's bank is being devalued on a daily basis by inflation.

Times have changed, gold no longer backs the dollar or any other major currency. Their are several countries printing money into existence so dollars are holding their value compared to their own countries also inflated currency. It's true value is still what the holders of dollars can buy from America with them. Prices of commodities , corn wheat, coal, copper are surprisingly stable or even going down with stock market shares being the exception if you can include them in the group.

What would the US do? Attack the whole of the rest of the world ...

No one country at a time is more then enough.
I am not in favor of deficit spending and quantitative easing and worry about when that bill comes due but the American economy being as large as it is can probably stand the strain and do it much better then any other country.
No matter how China and Russia conduct their deal some bean counter somewhere will convert the numbers to dollars to see which side got the best of the deal.

[kenneal - lagger]

The US has to import quite a lot of oil, minerals and stuff at the moment to maintain the "American Way of Life" and that cost a lot of money. The BRICS countries, over half the world's population, are growing at, or were, growing at about 7 to 10% per year so they will have to double there consumption of everything they have consumed in the past in the next 7 to 10 years. (to find the double time of the use of a resource divide the growth rate into 70 - the late, great Albert Bartlett)

Those countries have already achieved this twice in the last 15 to 20 years so that doubling is now a huge amount of stuff. The US has to compete for this and as those countries, by and large, are cash buyers whose going to want printed dollars when they can have cash that isn't losing its value. The US is going to have to go and take it, as they did in Iraq with its oil. The trouble in an alliance of the BRICS countries wouldn't just roll over like Iraq did and the US isn't big enough to occupy them all.

Would the US resort to MAD? Some people in the US would on the basis of "If I can't have it no one is going to have it!" Would there be enough people in positions of power to prevent it? Who knows?

[emordnilap]

Well, O'Bomber got it, so why not take it to beyond irony?

Tony Blair gets 'philanthropist of the year' award

Obama's prize 'political' No!

I do think it’s tarnished the award and people like Barack Obama can receive an award for promoting war and acting outside the boundaries of international law, then what does it really mean to receive such a prize?

And the people awarding these things are incompetent.