"When politicians and policy makers see an economic problem, especially one with the scale of the financial crisis today, they feel obliged to solve it. Unfortunately, the measures they’ve implemented have not worked so far. In fact, their policies have the opposite effect because it reinforces imbalances. The monetary stimulus is just whetted the appetites of consumers to purchase even more imports. Meanwhile, the second round of quantitative easing might only make it worse.
So investors, analysts, politicians, and policy makers all over the world are looking for a solution – and found the culprit: the dollar. Because it is used as a reserve currency, Americans enjoy an almost boundless spending.
At the very start of the financial crisis, it was already clear to many that the dollar’s hegemony would be question. Along with this is the fear that America’s dominance will go right down with it. This process may take time, possibly more than a decade, but the process has been set in motion. And there is no doubt that countries including China, Brazil, and possibly even France will insist that it continues..."
at http://www.marketoracle.co.uk/Article24322.html
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