Wednesday, May 20, 2009

Is the dollar sacred?

With all the money being printed by the government, and the fact that the dollar's foreign financiers appear -- appear -- to be losing at least some interest in maintaining their dollar investments, and the fact that America's debt is over $10 trillion (10 TRILLION!), and every year we keep growing deficits, and America's leaders on Wall Street and in Washington (including Barack Obama) seem to be more interested in re-inflating the economy in the short term in terms of bubbles rather than doing the hard work to increase the real-world productivity of our economy -- all this continues to lead me to think there's a chance for massive currency change both in the world and in the US. A chance for massive change along the lines of the end of the dollar-dominated world, and maybe just maybe the end of the dollar itself.

How would people respond to an event like this? For example, would the disappearance of the dollar be seen by Americans as an affront to their traditional way of life? Would we cling to the dollar for cultural reasons well past the time the dollar is in our economic interests? Will the dollar come to symbolically represent 'the American way of life that we must preserve'? At its moment of truth, will there be something particularly sacred about the way Americans think about the dollar that could preserve it? Or will we say, fine, let's move on?

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