Can The US Dollar Collapse, or Is The Party Over?

(11 am. – promoted by ek hornbeck)

Jane D’Arista is a research associate with the Political Economy Research Institute (PERI), University of Massachusetts, Amherst where she also co-founded an Economists’ Committee for Financial Reform called SAFER, i.e. stable, accountable, efficient & fair reform.

She is also a research associate at the Economic Policy Institute, “A nonpartisan think tank that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy”.

Jane served as a staff economist for the Banking and Commerce Committees of the U.S. House of Representatives, as a principal analyst in the international division of the Congressional Budget Office. Representing Americans for Financial Reform, she has given Congressional testimony at financial services hearings. She has lectured at the Boston University School of Law, the University of Massachusetts at Amherst, the University of Utah and the New School University and writes and lectures internationally.

Her publications include The Evolution of U.S. Finance: Federal Reserve Monetary Policy : 1915-1935, a two-volume history of U.S. monetary policy and financial regulation.

Here Jane talks with Paul Jay of the Real News in the first segment of a six part interview, and says now that the US dollar as the reserve currency of all international transactions…

“[H]as played out its ability to perform the function that was in place before, namely, the US was the banker to the world and was in effect doing the transactions that allowed the global trade and investment regime to work. Now that we are so much in debt, and that it began […] with the Reagan administration and has run up precipitously over time, we are now at historic levels in terms of debt.

And the household sector in this country, which we shifted to when in the Clinton administration we took down the federal deficit, the household sector has played out. [U]nemployment is high. People are losing their houses. They cannot borrow money to continue to buy.

And the whole global system came to be based on the idea that the American consumer was the engine for the global economy, and it is no longer.



Real News Network – April 14, 2010

Can the US dollar collapse?

D’Arista: US dollar as world’s reserve currency is great if you own a bank; not much good for Main St.

Full transcript here

Part 2 of this interview is here.

48 comments

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    • Edger on April 14, 2010 at 4:09 pm
      Author

    we need a new driver.

  1. Pfft.

    More deficit hawkism.

    Sovereign currencies can’t collapse.  Import prices can rise and that’s a good thing because it encourages local production.

    And as for the dollar losing reserve status I’ve seen no signs of China allowing the Yuan to take it’s place.

    Gold?

    I dunno, can you eat it?

  2. everybody in the world is STILL buying US Treasuries at practically 0% interest and until and unless that changes we have no limit on our Platinum card.

    In addition to having a self sufficient domestic economy and no governor on the presses at the Mint.

    Zimbabwe is NOT a comparison because they don’t have a self sufficient domestic economy.

  3. flowing into the Spanish Monarchy? Now, they didn’t have

    to make anything anymore or improve their agriculture. The rich  just invested in Royal promises and wars. Whoop de doo! Didn’t end too well though. Let’s see: Conquest+Accumulation of Inherently worthless shiny metal+

    Continuous war = Beginning of the End.

    • Edger on April 14, 2010 at 8:50 pm
      Author

    to orange…

  4. First, sure the dollar will probably lose its reserve currency status sometime in the future.  But it won’t happen for some time because there are no viable alternatives.  

    The demand for dollars will be there as long as people have to pay taxes.

    The major reason dollar has some value and reserve currency status is because its relatively stable political system.  

  5.  And thanks, Edger, for linking this post in Antemedius (sp?) by Pluto. Really great information in Pluto’s essay.  I’ve been wondering what happened to Pluto.

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