The UK Telegraph has released an interesting article discussing the future of the US dollar.
Every SD reader needs to read this article. Not only does it provide an excellent overview of the situation, it is the first hint from a mainstream media source of what we have been covering here for several years:
The possibility of a new virtual asset backed currency backed by Central Banks!
Submitted by Larry White:
This is such a great article it will save me a lot of time. Here is some info on the author of this article Liam Halligan.Instead of attempting to layout the future of the change that may be coming myself, I can just let the UK Telegraph article do the talking. Here some interesting key quotes:
. . . . .”And for the past 70 years, the dollar has ruled the roost.
This won’t change anytime soon. Something just took place, though, which illustrates that dollar reserve currency status won’t last forever and could be seriously diluted. Last week, seven decades on from Bretton Woods, the governments of Brazil, Russia, India and China led a conference in the Brazilian city of Fortaleza to mark the establishment of a new development bank that, whatever diplomatic niceties are put on it, is intent on competing with the IMF and World Bank.
It’s long been obvious the BRICs are coming. The total annual output of these four economies has spiralled in recent years, to an astonishing $29.6 trillion (£17.3 trillion) last year on a PPP-basis adjusted for living costs. That’s within spitting distance of the $34.2 trillion generated by the US and European Union combined.
America’s GDP, incidentally, was $16.8 trillion on World Bank numbers, and China’s was $16.2 trillion – within a whisker of knocking the US off its perch. The balance of global economic power is on a knife-edge. Tomorrow is almost today. just let this UK Telegraph article talk for me. I will post some key quotes from this article and then add a few comments. Here are the quotes first.”
“Although the dollar’s reserve status won’t end overnight, the global payments system is now moving inexorably towards that outcome. The US currency accounted for just 33pc of all foreign exchange holdings in 2013, on IMF numbers, down from 55pc in 2001.
Within a decade or so, a “reserve currency basket” may emerge, with central banks storing wealth in a mix of dollars, yuan, rupee, reals and roubles, as well as precious metals. Perhaps some kind of synthetic bundle of the world’s leading currencies will be developed, with emphasis placed, after years of western money-printing, on assets backed by commodities and other tangibles.
I also believe central banks may include cyber-currencies (such as bitcoin) in their reserves. If you think that’s mad, consider that mankind has long sought scarcity – be it with shells, stones or metallic elements – to store wealth. Now the money-printing taboo has been broken by yet another generation, it makes sense to use complex computer algorithms to ensure that only a certain amount of a particular currency unit can ever exist.”
My added comments: I absolutely do not think it is “mad” to consider the idea that central banks “may include cyber-currencies in their reserves.” In fact, we have been talking about this here all year long in articles like this and like this. It is nice to see a mainstream publication suggest this concept because it confirms what we have been reporting here.
This story also confirms the general time frame I have gotten from sources I view as credible inside the system. I believe the general view is that over the next 5-10 years we will see a transition from the current US dollar based system in order to address the problems in the current system. If there is a sudden, unexpected systemic crisis, that would change things. But I believe this is the time frame for change that is the prevalent thinking within the current system.
I can add that the cyber-currency under consideration is absolutely not Bitcoin. We have a recent update from Klickex on the status of their GSD (virtual asset backed currency) including an estimated timetable for implementation if all goes as planned. We are planning an article in the future on this once we get some additional information that will allow us to expand on the story. It looks more and more like we will see some visibility on this story this year. For now, its nice to finally have some company talking about a central bank backed and asset backed virtual currency. It has seemed lonely out here