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Pittsburg, Kansas | Probably nothing near term or that the average person would notice.
But it is another erosion of the USA world dominance and financial hegemony.
For many years the USA (since Bretton Woods agreement or before), being the main financial reserve currency, we have been able to export dollars and recieve real goods for those paper or digital dollars that cost almost nothing to make. The demand for Dollars was such that we could essentially export inflation. The inflated money supply left domestic shores so minimized what we felt for inflation at home.
The erosion of this means there will be less demand for dollars going forward. Most of the world settles their foreign trade in dollars. As countries like China and Russia set up their own international banking systems (compared to the SWIFT system to settle accounts) there will over time be less need for US Dollars. There are already several major agreements of countries doing trate settlements in their own currencies and bypassing the use of the Dollar.
Reduced demand for Dollars is no different than reduced demand for corn or beans.
In the past when smaller countries tried to settle their trades in something other than dollars, we just invaded them. Or sent the CIA in and destablized their governments so a puppet government could be installed more oriented towards the wests desires.
China and Russia are a little big for that to work. That is one reason they are being demonized in the media and by politicians. In case there needs to be a war with them for financial reasons, there will be public support for it.
So in the short run, not much. In the long run a loss in the ability to export inflation will over time affect the prosperity of the US compared to what it has been in the past.
No nuclear blast financial destruction. More like US financial hegemony death by a thousand cuts.
John
Edited by John Burns 10/1/2016 08:24
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US Dollar
