4 ms·

TLDR: ...except that there are no alternatives... (last paragraph).

emn13 11y ago
I think that's a pretty misleading TLDR (as it suggests nothing will change which isn't at all what the article claims); The title is a better summary of the message.
- blumkvist 11y ago
  The article doesn't claim anything.
  - emn13 11y ago
    Sure it does; it claims the dollar's primacy is unsustainable.
- peteretep 11y ago
  The article is about as meaningful as you'd expect one that suggested "Democracy's primacy looks unsustainable", and is full of examples of things that don't mean anything. > In recent months the prospect of even a tiny rate > rise in America has sucked capital from emerging > markets, battering currencies and share prices. Sucking capital from emerging markets is not an attribute of a currency that's fading, so much as one whose primacy is in fact increasing after a lull... > Foreigners own 20-50% of local-currency government > bonds in places like Indonesia, Malaysia, Mexico, > South Africa and Turkey: they are more likely to > abandon emerging markets when American rates rise. And for what will they abandon it? It has a $ in the name. > America increasingly uses its financial clout as a > political tool There used to be a great quote on Wikipedia's page about the Economist pointing out it's largely written by early-20s Oxford graduates. If they think America's use of its financial clout is increasing, it would seem their view of history starts circa 2001. > All this suggests that the global monetary and > financial system will not smoothly or quickly wean > itself off the greenback Oh look, even the article suggests the title is wrong!
retrogradeorbit 11y ago
SDRs are an alternative. That's if they can be implemented in time. The US would have done better to give China a seat at the IMF table, but by locking them out it has created a monetary adversary that stands against the SDRs adoption as a global reserve currency. https://en.wikipedia.org/wiki/Special_drawing_rights https://en.wikipedia.org/wiki/Special_drawing_rights
- forgetsusername 11y ago
  >That's if they can be implemented in time. They've been talking about SDRs for over 40 years. I'd say it's a demand problem, not an implementation problem.
kbutler 11y ago
This is the key takeaway. There is (growing?) demand for a reserve currency. There is currently a single supplier. I don't know if the demand is actually increasing - these conversations have been going on for decades. The Euro was discussed as a potential rival reserve currency (e.g., see http://www.cer.org.uk/insights/euro-world%E2%80%99s-reserve-currency http://www.cer.org.uk/insights/euro-world%E2%80%99s-reserve-..., which says it was created with that idea), but that's faded recently. Although people inside and outside the U.S. decry the capriciousness of the US government and political process, as long as there is no better (or even comparable) alternative, the US dollar will retain its position of prominence.

emn13 11y ago

I think that's a pretty misleading TLDR (as it suggests nothing will change which isn't at all what the article claims); The title is a better summary of the message.

blumkvist 11y ago
The article doesn't claim anything.
- emn13 11y ago
  Sure it does; it claims the dollar's primacy is unsustainable.
peteretep 11y ago
The article is about as meaningful as you'd expect one that suggested "Democracy's primacy looks unsustainable", and is full of examples of things that don't mean anything. > In recent months the prospect of even a tiny rate > rise in America has sucked capital from emerging > markets, battering currencies and share prices. Sucking capital from emerging markets is not an attribute of a currency that's fading, so much as one whose primacy is in fact increasing after a lull... > Foreigners own 20-50% of local-currency government > bonds in places like Indonesia, Malaysia, Mexico, > South Africa and Turkey: they are more likely to > abandon emerging markets when American rates rise. And for what will they abandon it? It has a $ in the name. > America increasingly uses its financial clout as a > political tool There used to be a great quote on Wikipedia's page about the Economist pointing out it's largely written by early-20s Oxford graduates. If they think America's use of its financial clout is increasing, it would seem their view of history starts circa 2001. > All this suggests that the global monetary and > financial system will not smoothly or quickly wean > itself off the greenback Oh look, even the article suggests the title is wrong!

retrogradeorbit 11y ago

SDRs are an alternative. That's if they can be implemented in time. The US would have done better to give China a seat at the IMF table, but by locking them out it has created a monetary adversary that stands against the SDRs adoption as a global reserve currency. https://en.wikipedia.org/wiki/Special_drawing_rights https://en.wikipedia.org/wiki/Special_drawing_rights

forgetsusername 11y ago
>That's if they can be implemented in time. They've been talking about SDRs for over 40 years. I'd say it's a demand problem, not an implementation problem.

kbutler 11y ago

This is the key takeaway. There is (growing?) demand for a reserve currency. There is currently a single supplier. I don't know if the demand is actually increasing - these conversations have been going on for decades. The Euro was discussed as a potential rival reserve currency (e.g., see http://www.cer.org.uk/insights/euro-world%E2%80%99s-reserve-currency http://www.cer.org.uk/insights/euro-world%E2%80%99s-reserve-..., which says it was created with that idea), but that's faded recently. Although people inside and outside the U.S. decry the capriciousness of the US government and political process, as long as there is no better (or even comparable) alternative, the US dollar will retain its position of prominence.