Gyroscopic Investing

I am reading an interesting piece published in 2005 by Barry Eichengreen an economist from Berkeley. He gives a good historical background on international reserve currencies and discusses the transition from pound sterling to the dollar. His conclusions are not definite, but he sees us entering into an era of multiple reserve currencies centered around the Euro and the Dollar. (I wonder what he thinks about the Euro now?) Anyways, its a good read to get some background about reserve currencies.

http://www.econ.berkeley.edu/~eichengr/ ... r29-05.pdf

the mcalvany article also envisions a loss of the world's reserve currency...tied to Iran, oil. etc.

http://www.bfi-capital.com/mountainvisi ... 0f28b5d49b

The world's policeman is going to have the world's reserve currency.

That's part of the deal.

It's not as complicated as some people make it sound.

If you want to know when the dollar will stop being the world's reserve currency, try to determine when the U.S. will stop being the world's policeman.

I don't think that Iran is going to have any influence whatsoever on the dollar's status as reserve currency.  Iran is obviously an annoyance, but what does Iran have to export besides oil and terrorism?  If that's all they have to offer the rest of the world, they are going to struggle as a nation, despite their fiery rhetoric, and regardless of the U.S. dollar's status as reserve currency.

With better political leadership Iran could be a great country.  It's a shame that a somewhat modern society like Iran is being run by the political/religious equivalent of the Flintstones.

The USD is slowly sliding from being the world currency for commodity trading. Bilateral arrangements between China and Brazil and Australia and Russia and India and Iran etc etc mean that some commodity trading is now done without using the USD. Perhaps things will end up with a plethora of different currencies being used for trade and reserves.

I think other countries realize that the world's policeman role is intertwined with the reserve currency role. Without having a global reserve currency, the policeman role would be unaffordable. Other countries can see how destructive it is for the world to have a self appointed policeman and so are defusing the USD role as global reserve currency. That saves the other countries from being forced into funding an unasked for policeman via the reserve currency.