Marv Gandall writes:
>Most speculation turns on the dollar being replaced as the sole anchor >currency by a basket of currencies, including the euro, yen, and in due >course a full-floating renminbi. Although such talk has always been >heard when the dollar has shown weakness, this time it is underpinned >by structural factors: the relative decline of US global economic power; >the role US dollar hegemony has played in contributing to the >destabilizing US current account deficit; the expansion of the eurozone >economy; and the increasing reluctance of the fastest-growing >economies in Asia and the Mideast to maintain their dollar pegs for >domestic reasons… a single reserve currency appears, in fact, to be an >historical anomaly rather than the norm.
J Gulick replies:
Will the EU and East Asia, in tandem or individually, have in place any time soon the social structures of accumulation that would enable them to play the “market of last resort” role? Germany and Japan are still trade surplus titans, and China has become one. It’ll take them quite a while to retool their political economies to perform the sort of functions typically associated with being financial-monetary hegemons.
Also, the previous world of multiple reserve currencies was also the era of inter-imperialist rivalry. Do you really think the state apparatuses and big bourgeoisies of the capitalist powers not only share joint interests but are able to cognize this and translate it into policy? For a world of multiple reserve currencies to avoid degeneration into competitive blocs during phases of crisis and contraction, the answer to this question would have to be in the affirmative.
I must admit I’m a little out of practice on these issues, though.
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