For US Mahaloians, what will be your feeling if USD is no longer the world reserve currency?

This question is similar to one recently asked about the idea of a Global currency. I did not have time to answer that, so I am glad you are asking it again. OK, this is my take.

The main impact if the US dollar were suddenly no longer the world's Reserve Currency, would be a drastic reduction in living standards in the US. While I do not look forward to this, the rest of the world does resent us for our dollar being the "Reserve currency. " We take advantage of the rest of the world because of "Dollar hegemony" a term coined by Henry CK Liu.

Dollar hegemony is the American Empire's tax on the rest of the world, tribute paid to us indirectly and surreptitiously, which allows us to maintain the Empire. According to Liu, exporting countries cannot spend the dollars they earn from the massive US trade deficit in their own country. Dollars can only be used to buy dollar denominated assets, which include oil, hence the term "petrodollar" as well as US Treasuries, and shares in US corporations.

Furthermore, most debts are denominated in dollars, so foreign countries must accumulate dollars in order to pay back these debts. Foreign banks also must hold vast amounts of dollars to prevent attacks on their home currency. So far, our trade deficit is being financed by foreign countries, who loan back to us the dollars they earn through their exports to us, by buying our Treasuries, allowing the US to buy even more of their stuff, as we dig ourselves deeper into debt.

Not only that, they loan us the money so we can build up our strong military to fight wars, build up our economy and thus continue our domination over them! It is paradoxical, that this is being done, but one day, the rest of the world will wise up. Furthermore, because the US dollar is currently the worlds reserve currency, and because it is no longer backed by gold, this means we can print as much of it as we want!

We create it out of thin air, as they say. Think about it. How did all these TRILLIONS of dollars get into circulation?100 years ago, there were billions of dollars in circulation, but not TRILLIONS.At one time, the dollar was backed by gold, but in 1971, Nixon took the dollar off of the gold standard.

Too many countries were trying to cash in their dollars, and we were running out of gold. After that it was simple to just print more money, since it takes a while for the rest of the trusting public to realize that the dollar isn't worth anything anymore. Old habits die hard.

The fact that the US just creates money out of thin air is kept as a big secret! I mean, if you could print money in your basement, would you tell anyone?"Petrodollar warfare" is a term coined by William R. Clark.

Because we have an agreement with the Middle East for them to price oil in dollars, also known as the "petrodollar", all countries must maintain stockpiles of dollars to buy this oil.In exchange, we supposedly provide military protection to countries in the Middle East. We are afraid of having oil denominated in other currencies, because this would lead to a price increase in the oil for the US. Since the Middle East cannot spend these dollars at home, they loan them back to us!

Actually, all the countries holding dollars loan them back to us, and since they compete in this loan process, we can borrow at a lower interest rates than would otherwise be warranted. Now other countries are getting wise, and don't want our dollars anymore! They are worried that we will just keep printing more of them, and pay them back in dollars that aren't worth as much.

The Middle East would rather keep the oil, or maybe buy gold or other commodities. One of the reasons for going to war with Iraq, was not only to protect our access to her oil, but also because Saddam Hussein priced his oil in Euros! And China is now getting worried about being paid back in dollars that are not worth as much.So what is the solution?

Well, the US has to start producing something of value. It is the death of the FIRE economy: Finance Insurance and Real Estate. Our manufacturing base has been degraded tremendously.

We have to reform monetary policy and preserve the value of money, so that it can trusted as a store of value. Ron Paul has some good ideas. I favor the Austrian School of Economics and the return to the gold standard.

Duenhsiyen.

The money will be less than. Mahalo dollars are worth 75% of a USD, so I would be a little upset.

It would be just one of a long line of failures of the US keeping it's status as a superpower.

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.