Popular and unpopular economists (mostly unpopular according to the mainstream media) have been predicting the collapse of the US dollar as the reserve currency (or petrodollars) of the world for a couple decades now. It seems that their predictions are finally coming to fruition. Most of the gold brokers practice what they preach, they foresee the imminent demise of the American dollar and hold a large portion of their personal assets in gold, silver, platinum and palladium.
Meanwhile all people who live in the United States need to pay their mortgage and buy food, clothing, gas, oil, electricity with the American dollar. If you are sitting on a large cache of gold or silver, you need to liquidate it to buy items you need immediately.
The demise of the dollar
By By Robert Fisk of The Independent
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
You can find the original document at The Independent
This is not the first time in recent memory that a currency of a major economy has collapse. The Argentinian economy was one that collapsed about 8 years ago in a fiery inferno of debt brought on by massive debts and horrible economic planning.
The Argentine economic crisis was a financial situation that affected Argentina’s economy during the late 1990s and early 2000s. Macroeconomically speaking, the critical period started with the decrease of real GDP in 1999 and ended in 2002 with the return to GDP growth, but the origins of the collapse of Argentina’s economy, and their effects on the population, can be found in action before. As of 2005, arguably the crisis was over, though many challenges remain for the country (wikipedia, 2009).