Icecool asked in Social ScienceEconomics · 9 years ago

What will happen the US economy when the dollar is no longer the world's reserve currency?

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  • Anonymous
    9 years ago
    Best Answer

    Nothing would happen. Let me ask you a question. Do you see China suffering? Do you see European countries suffering? Their money has never been the world's reserve currency. The only reason that our currency has been the reserve currency for so long is that it is convenient considering the number of nations our country does business with. If they were to switch to something else, say the Euro or Yuan, our companies might have to convert their currency more often.

    Second, it won't happen. I know the dumb little video that people have been watching. I heard about it and sat through the ENTIRE thing. First of all, I would really like to see some evidence that his firm predicted everything that they said they predicted. Porter Stansberry is not even famous enough to have his own wikipedia page, and his firm is virtually unknown. If they were that successful (which some were) then the SEC would have information on HIM. But they don't - not enough for him to be even a blip on the radar. Many of their economic claims are absolutely based on untrue assumptions.

    Like that the Federal Deficit is perilously high. That is what much of the American public thinks, but do you see economists hanging themselves or moving to Europe? No. In fact, the deficit could be 60-70 Trillion before we would have real reason for concern. Japan has a MUCH larger deficit per person than we do and it has not stopped them from having the worlds second largest GDP. As long more of our debt is owned by ourselves than others, we are fine. These budget problems that the nation is experiencing right now has more to do with not taxing enough to pay for things like military actions, operation of bases in foreign lands, police and firefighting forces that are too large, and allowing the medical system the wring our economy like a wet sponge to extract money from our health care budget.

    The video we watched is garbage propaganda that has been created by a not-so-wealthy man who is, coincidentally a member of the Tea Party right now. These kind of videos are always released shortly before an election to scare people into voting one way. The truth is that we need to brave enough to cut the one area we can't afford anyone and we'll be fine... our military. It is the largest strain on our budget and as was made obvious by 9/11, having 17 fighter jets in the air does not stop a few guys with box-cutters. So relax. The U.S. is still the most attractive investment for bonds in the world because ours pay out higher and are subject to less taxation. The world may pull out of the U.S. economy one day, but only if Congress starts doing things to make it look unstable (like shutting down the government to get women's health clinics de-funded).

    Source(s): JD/MBA Program in Economics - University of Chicago
    • ?5 years agoReport

      Do you see European countries suffering? Their money has never been the world's reserve currency. ******* The Pound Sterling was the Reserve Currency for decades.....

  • 9 years ago

    I believe the US is the world's reserve currency, for it is widely used in many countries.

    One thing is assumed, if it is no longer the world's reserve currency, then that means majority has stopped to believe in the US dollar, which means, it affects the economy--be it hyper inflation or the other factors.

  • 9 years ago

    1: only Americans believe the USD is the reserve currency for the rest of the world.

    2: the US economy has been going down the tubes since the 1920's, the total collapse has just been fended off for a very long time and masked by politicians and war.

    3: the hard truth is the same for much of the rest of the world; for a long time, people have simply been pushing numbers, not real estate assets around in ever narrowing circles; sooner or later, we have to wake up to a simpler and much more austere mode of life.

  • 9 years ago

    I think since Nixon eliminated the gold standard. American government keep on printing money.

    America is overspent and under produced and officially is declared bankruptcy.

    http://en.wikipedia.org/wiki/Nixon_Shock

    http://search.yahoo.com/search?p=Is%20America%20of...

    http://search.yahoo.com/search?p=What%20happened%2...

    Nixon has a strategy of leading to the America Empire of Super Imperialism.

    If America dollars not being as the safety reserved money, America will getting poor and inflation will go up rapidly. Average American will be getting poor.

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  • 9 years ago

    The US dollar is not the worlds reserve currency..gold is and always has been.

  • 9 years ago

    Interest rates will rise as foreign central bank sell our assets.

  • 9 years ago

    nothing it has no effect on the economy in any way

  • Anonymous
    9 years ago

    It isn't...

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