Always a Good Observation

Re: World's "reserve currency" has changed throughout history -- RichAndPretty
Posted by CPMariner , Tue, Dec 26, 2017, 11:50:01 Post ReplyTop of ThreadReviews by CPMarinerFirst Amendment Message BoardMain site

...when discussing the concept of "reserve currency" (which is actually an odd thing in itself). It didn't take much for the pound sterling to take a long walk off a short pier. Just one horribly mismanaged and misbegotten "splendid little war" (the Suez Crisis) gone bad, and it was all over but the shouting. The pound fell with the Empire.

I think what's really changed is the international banking system. The "Old Lady of Threadneedle Street" (Bank of England) was very nearly a unitary guarantee of monetary stability, but fiat money shook the foundations of that old building.

Now we rely on the coincidental (common objectives) of major U.S. banks and the Federal Reserve to keep the train on the tracks.

Which is something to squirm uncomfortably about, considering the financial events leading to the recent Great Recession. Personally, I don't see "anything coming" along those lines, but... who am I? ("Chopped liver" would do nicely ;-)


PS: For those unfamiliar with such things, a "weakening" dollar favors the debtor, not the creditor, as some (not you) seem to misunderstand. I recall reading a short story involving plummeting currency values (runaway inflation) where the author wrote: "Creditors were hunted down and ruthlessly paid off". Too funny :- )


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