The New Monetary System – Made In China
by C Serpa
GramsGold.com
2/16/2015
There is much speculation as to how the collapse of the dollar will manifest itself, as another currency will inevitably take over. Society will not just crumble into the Dark Ages, with no alternative currency, when the dollar loses such value that the world loses all confidence in it.
In the book Paper Promises, author Philip Coggan says that “When the world economy heads into crisis, the international currency system often changes.”
Read more to see what this author thinks is going to occur regarding the next new monetary system, and how it might unfold:
“It did so in the First World War when gold convertibility was abandoned. It changed in the 1930s Depression as countries went off the gold standard. And it happened again in the 1970s, when the Bretton Woods system collapsed.
The system breaks down either because the debtors cannot, or will not, meet their obligations, or because creditors fear they are not being repaid in the sound money. This time round, the first symptom has appeared in the euro-zone; the second will emerge in the China/America relationship.
So how might the system change? Much of the discussion concerns whether the US dollar will be replaced as the global reserve currency by the Chinese renminbi, or whether it will simply be one of a range of reserve currencies including the euro, renminbi and yen.
The global reserve currency is the currency that forms the biggest proportion of the holdings of central banks. More broadly, however, it is also the one most likely to be accepted by merchants in other countries; if you are a tourist in Africa, you will be better off trying to buy good with dollars than sounds or yen.
In my view, the debate about whether the dollar will be replaced by the renminbi is a bit of a red herring. Such a shift may eventually occur but it is likely to take a long time.
The Rest…HERE
