The Dollar hit a fresh low for 2009 today, breaking through support.
from Barrons:
CHINA ISN'T JUST TALKING ABOUT supplanting the dollar as the center of the international monetary system. It is taking concrete steps away from the greenback for both finance and trade.
The Financial Times reports China and Brazil have discussed using their own currencies for trade, a marked shift away from the use of dollars, the norm for the conduct of international trade.
There have been proposals over the years to use currencies other than the dollar for trade, most notably by the Organization of Petroleum Exporting Countries. OPEC has made noises about pricing its oil in a basket of currencies or perhaps the euro to offset the cartel's currency losses when the greenback would take one of its periodic headers.
But nothing ever has come of those threats. And even with the introduction of the euro as the first, real potential rival, world trade continues to be conducted overwhelmingly in dollars.
The global use of dollars has been an enormous advantage to the U.S., affording the nation the ability to spend and borrow nearly without limit. As long as the rest of the world wanted and needed dollars for trade in goods and financial transactions, America could effectively just reel off greenbacks to pay its bills.
