There is already a trend away from using the U.S. dollar in trade.
http://kenthink7.blogspot.ca/2012/03/brics-to-extend-each-other-credit-in.html
BRICS to extend each other credit in local currencies lessening dollar dependency
Brazil, Russia, India, China and South Africa (BRICS) will now provide credit in local currencies. This will not only facilitate growth in trade but it will also lessen dependence on the U.S. dollar as the medium for trade.
The chief economist at Deutsche Bank said:" The idea is in line with many interests and economic exigencies in the world economy,” “The euro and dollar are no longer seen as unquestionable monopolies in the role of reserve currencies. Clearly the world needs more reserve currencies.” The BRICS are moving away from too much dependence upon standard exchange currencies such as the dollar and euro. Not only will such a move increase the BRICS influence but if the West tries to impose sanctions on them for whatever reason trade will go on.
The trend towards using new currencies in trade has been developing for some time. China and Russia use the rouble and yuan in their trading relationships and have been for several years. Russia is now planning to develop a similar deal with India.
________________________________ From: Julio Huato <juliohuato at gmail.com> To: pen-l at lists.csuchico.edu; Lbo Talk Lbo Talk <lbo-talk at lbo-talk.org> Sent: Thursday, April 12, 2012 2:07:41 PM Subject: [lbo-talk] Bernanke to Congress: We're Much Closer to Total Destruction Than You Thin
Shane wrote:
> What makes it money is that it is "legal tender for all debts
> public and private." What makes it "credible" as money is
> that debts and taxes can be settled only with legal tender.
I don't think so. I'm not saying that the conditions that underpin the USD don't appear robust, even now. They do. Very. And part of it has to do with a "credible alternative," as raghu mentioned. That's why I'm not predicting anything. But things don't have to be very likely to be possible. Sabri sees Turkey invading Syria. That seems like a step towards Iran. With nuclear Israel in the map, things can get quite explosive in no time. The might of capitalist U.S., ultimately based on the part of the productive force of labor the ruling class can appropriate, is not infinite.
> I cannot, short of the hyper-inflationary scenario above.
I know there's this so-called American exceptionalism. But, in Latin America, we had cases of hyper-inflation with huge unemployment and no invading force in sight. Yes, the basic fabric of a state can just fray without anything positive replacing it---social stagnation and slow decay setting in, political paralysis, whatever. For this to exist, contra raghu, there is no need for a "credible alternative." The bottom just drops. I know the U.S. is not Mexico, or Central, or South America, but....
And then there's also that thing Anwar Shaikh calls "throughput." Just saying.... ___________________________________ http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk