Excerpt:
The greenback, in other words, is not just America’s currency. It’s the world’s.
But as astonishing as that is, what may be even more astonishing is this: The dollar’s reign is coming to an end.
I believe that over the next 10 years, we’re going to see a profound shift toward a world in which several currencies compete for dominance.
The impact of such a shift will be equally profound, with implications for, among other things, the stability of exchange rates, the stability of financial markets, the ease with which the U.S. will be able to finance budget and current-account deficits, and whether the Fed can follow a policy of benign neglect toward the dollar.
The Three Pillars
How could this be? How could the dollar’s longtime most-favored-currency status be in jeopardy?
OECD Secretary-General Jose Angel Gurria sat down with Dow Jones FX Trader during the meeting of G20 finance officials in Paris to talk about global imbalances and the euro zone’s debt crisis.
See the share of global foreign-exchange transactions involving the dollar, and the dollar’s share of official global foreign-exchange reserves.
To understand the dollar’s future, it’s important to understand the dollar’s past—why the dollar became so dominant in the first place. Let me offer three reasons.
More here: Dollar’s Reign as World’s Main Reserve Currency Is Near an End – WSJ.com.
