Would would happen to the US economy if the dollar stopped being the world's reserve currency overnight?
Shelves of Wal-marts going empty overnight? DJA dropping 50%? Mass panic?
"The liberal economic system required an accepted vehicle for investment, trade, and payments. Unlike national economies, however, the international economy lacks a central government that can issue currency and manage its use. In the past this problem had been solved through the gold standard, but the architects of Bretton Woods did not consider this option feasible for the postwar political economy. Instead, they set up a system of fixed exchange rates managed by a series of newly created international institutions using the U.S. dollar (which was a gold standard currency for central banks) as a reserve currency."
- 1 decade agoFavorite Answer
If that happened there would no longer be a US economy.
- bretsmith7876Lv 51 decade ago
If you're prepared, and don't live in a city? Not bad. If you live in a metropolis? You'll wish you'd moved. I live in a sweet, quiet home town. Our last big crime was when a little old lady put the car into drive instead of reverse, and went into the front of a store. The next day she had flowers on her doorstep, and a mailbox full of well wishes and offers to drive her to Church on Sunday. Will we all be OK? Yep. Paul's Pizza, the first store as you come into town, flies the "Don't Tread On Me" flag out front. The last thing you see as you LEAVE town is the Gun Club sign. Needless to say, we all know eachother, and we take care of eachother. We all have gardens, firewood, and we make all sorts of good stuff. We'll be OK, no matter what.
- ErikaLv 43 years ago
If it happens the effect will fairly be in keeping with what foreign places funds if any replaces it; I say if any by using fact it would be obtainable that a clean universal foreign places funds might desire to be designed yet that would desire to be complicated so the different ingredient may well be to make it gold based and that would desire to reason some substantial inflation observing the futures paying for and advertising there. appropriate now i think of this is regularly confer with decrease the US spending/deficit which China and others have already expressed concern approximately. a style of waut and spot what happens then what the effect would be.
- 1 decade ago
Dow Jones has already lost more than 50%..no mass panic yet....Walmart will not go empty overnight....however, your banks have lost something like 80% of their values in the past few months..not much panic yet...just a lot of layoffs...soon there will be hysteria about all of this...just have not happened yet.
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- martinx07Lv 61 decade ago
The price of food, gas, and other materials that sustain would skyrocket. We would all be waiting in a soup line if this happened.
- Anonymous1 decade ago
I guess we're going to find out.
- Anonymous1 decade ago
"hold on to your butts..."