The
US dollar as the most widely held reserve currency is becoming
“outmoded and obsolete” due to the government’s mismanagement of the
financial system, an American economist says.
The use of the dollar as an international reserve currency, including
for international trade, has become “outmoded, obsolete and
unworkable,” said Webster Griffin Tarpley, a critic of US foreign and
domestic policy.“US Treasury Secretaries and US Federal Reserve officials have been much more interested in saving the Wall Street zombie banks from the consequences of their own speculation than they have been in doing the things that would really make the dollar a liable reserve currency,” Tarpley said.
“They’ve given up on functioning as a reserve currency and therefore the rest of the world is drawing the consequences,” he told Press TV on Wednesday.
In a symbolic blow to US global financial hegemony, Russia and China took a step toward undermining the dominance of the US dollar as the world reserve currency on Tuesday.
In the presence of Chinese President Xi Jinping and Russian President Vladimir Putin in Shanghai, Russia’s second biggest financial institution, VTB, signed a deal with the Bank of China to bypass the dollar and pay each other in domestic currencies.
The world’s five major emerging economies known as the BRICS countries — Brazil, Russia, India, China and South Africa — have long sought to diminish their dependence on the dollar as a means of reshaping the world financial and geopolitical order.
Demand for the dollar as a reserve currency in international transactions has allowed the US to borrow almost unlimited cash and spend well beyond its means, which some economists say has afforded the United States an outsize influence on world affairs.
Economists believe, however, that in the absence of a viable alternative, replacing the US dollar will be difficult.
AHT/AGB
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