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If the U.S. dollar stops being the global reserve currency,
those holding dollars (including in Europe, China, Japan and the middle-eastern
oil states) will sell them off to cut their losses, and the U.S. will no longer
be able to print whatever we need to pay the interest on our debts (because
such payments cannot be made in a non-reserve currency).
The dollar will be devalued, and the result will be an
immediate drop in the average American's wealth of at least 15% and perhaps
much more (for the sake of comparison, the average American's wealth decreased
7% from the beginning of 2009 to the end of 2011).
This will cause
significantly higher unemployment rates, and plunge us once again into a much
worse recession.
U.S. leaders could do much to stop this coming problem, but
Washington has shown little proclivity to address this need.
Most Americans don't understand the nuances of currencies
and prefer to leave such things to the experts.
"There is no subtler, no surer means of overturning the
existing basis of Society than to debauch the currency. The process engages all
the hidden forces of economic law on the side of destruction, and does it in a
manner which not one man in a million is able to diagnose."
I am an optimist, and I believe the best is yet ahead for America and
the world.
But unless we get our financial house in order very soon, we appear
destined to suffer major challenges before the good times come again--and such a
development will likely push real recovery years and perhaps decades down the
road.
The sad part of this is that it is still avoidable, but few are doing
anything about it.
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Social Leader Daily by Oliver DeMille
