Well, given how rocky the euro experiment has been so far, I'm not concerned at all about a euro-like gold backed currency coming onto the scene.technovelist wrote: That is one possibility. The other obvious possibility is that one government or some set of governments decides they are tired of the US getting away with murder via the "exorbitant privilege" and that they will stop it by creating a new currency regime based on gold, to supplant the dollar.
That's the one I expect.
Why on earth would a sovereign nation give away so much control over its economy to some UN-like monetary authority that would manage this new gold-backed international anti-dollar currency?
I can almost guarantee that one of the very first problems with the new currency would arise when strong exporter nations tied to the new currency began to realize that it was no longer possible to enhance the competitive position of their export industries by tweaking the currency to devalue it a bit in relation to other currencies. This is what China has been doing for years and it has caused enormous wealth to flow into China. If you were to take that ability away from nations like China it would seriously damage their ability to maintain competitive export industries, which is one of the reasons that most nations would say they have no interest whatsoever in such a new currency.
In a global economy, no one wants a strong currency. No one. See Switzerland's euro peg in 2011 if you don't believe me.
Whether we like it or not (and I don't like it), we live in a world in which many functions are simply being outsourced to those who do them best. Thus, the world has outsourced manufacturing to China, it has outsourced energy production to the Middle East and Russia, and it has outsourced the efficient delivery of violence via military action to the U.S.
Despite what they say, no one really wants to disrupt this arrangement because too many people benefit from it. They like cheap stuff from China, they like cheap oil and gas from other countries, and they like not having to maintain huge military budgets because they can just rely on the U.S. to deal with any problems that may arise which require lots of violence to resolve.
It's fine to say all of this stuff is stupid (and I would agree), but that's the way it is, and the U.S. dollar is an integral part of it all.