by, 7th-July-2009 at 01:44 PM (793 Views)
Insight: Reservations about the dollar
** just like to point out this fact that most of the current global economic leaders are facing the same "sunset" dilemma not unlike that of the Japanese' - an aging population and a rapidly shrinking economy.New global economic trends are changing the costs and benefits of having a reserve currency. In coming years, all countries may have to fight over a shrinking global savings pool as baby boomers retire. This will increase the desire to enjoy the “exorbitant privilege” accruing to the issuer of the global reserve currency. But joining the club is not free. Reserve currency issuers may need to supply large quantities of their currencies, with the concomitant risk of running potentially large current account deficits. They will also surrender a loss of competitiveness to the US by allowing a significant appreciation of their currencies against the dollar...
Unless these countries begin to provide free viagara pill to their populace, it's unlikely to see the trend alter in any meaningful way. The alternative is through immigration which probably is not the most desirable option by any measure... not when you are running a democratic system and you rely on popular votes to keep you in power.
The end is nigh for some, there's no running away.
... and there's a simple way to measure the shifting trend, you can start by keeping track of a nation's currency value and its purchasing power.