![World Bank president Robert Zoellick [photo: AP]](http://www.getmoneyenergy.com/wp-content/uploads/2009/09/robert-zoellick.jpg "World Bank president: “The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency.” [photo: AP]")
The US dollar has served in the role of world reserve currency since 1944, but there is nothing intrinsic about the US dollar which requires that it – and not some other, new currency – continue to fulfill that function. If anything, the long-term secular decline in the greenback since 2001, coupled with much more recent debasements as a result of an increased rate of money printing, have called the suitability of the US dollar as a world reserve currency into severe question.
In recent remarks to the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University, World Bank president Robert Zoellick joined similar calls internationally – from the UN to China, Russia, France, Japan and Brazil – when he stated that the international economic order must be prepared to change under the influence of growth in emerging markets, to give but one obvious reason.
U.S. Dollar Must Be Replaced As The World Reserve Currency (Sept. 8, 2009)
Does Not Require A Change To the US Dollar Itself; Just a Different Currency As The World Reserve
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The implicit reason for the coming change in the world economic order, however, is clearly the situation on the ground with the US dollar. Above and beyond any calls on what the dollar’s future is domestically for the U.S. economy, an increasing number of world leaders and policy makers agree that there is some conflict of interest when a domestic currency such as the dollar is also used as the world reserve currency for international payments.
Most obviously, this puts international players at the behest of one nation and one nation’s successes and failures with regard to the management of its own money supply and its stability.
Geithner and Bernanke can talk all the “strong dollar” rhetoric they want, but the numbers on the balance sheet tell the real story.
For a non-U.S. perspective on the future strength and viability of the US dollar, see these reports by Sprott Asset Management (Toronto).
Find Out More About the Status of the World Reserve
What Is The World’s Reserve Currency?
Zhou Xiaochuan’s Proposal For World Reserve Currency is Accepted by UN (March 29, 2009)
U.S. Dollar Up For Debate At G8 Meeting (July 5, 2009)
Supracurrency Coin Proposed As New World Reserve Currency (July 12, 2009)
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