The Closet Moderate: Cold hard cash

Thursday, April 02, 2009

Cold hard cash

There's been a lot of loose talk among the third-world countries that the world ought to adopt an alternate reserve currency to replace the American dollar. This reinforces my belief that government and commerce ought to be kept separate whenever possible. For one thing, this idea already happened in 1969 when the IMF created the "special drawing right" as an international currency. There are a few problems with this:
[+]More

For one thing, have any of you even heard of this SDR? It sounds fake as hell. If something is supposed to be the global money, it ought to be at least half as well known as the famous greenbacks we all have in our pockets. Also, 44% of its value is based on the dollar, anyway. So basically, the Chinese and others are pushing a watered-down dollar to replace the real dollar. Try passing an SDR to a stripper next time you're at the nudie bar and see what happens. Now, extrapolate that to the world economy. Basically, a bouncer is going to break China's arm.

But let's face it: this has nothing to do with economics and everything to do with politics. So the Chinese want to bust Uncle Sam's balls. OK, mission accomplished. But what about the real question? What would be a stronger reserve currency? That ass Hugo Chavez suggests an oil-based money. OK, you first, Hugo. See how your people like a currency unit that fluctuates wildly and, if they had done this two years ago, would have lost more than half its value.

No, the only reserve currency worth a damn is the one the striped-pants crowd ditched the last time we had a depression. That's right, I said it: gold. G-O-L-D, GOLD, bitches, the best store of value humanity has. The only way we these other nations can hope to replace the dollar is by introducing something more secure, not less.

No comments: