Simon Black, Sovereign Man: Barack Obama may have finally destroyed America’s #1 advantage
In July 1944, just weeks after the successful Allied invasion of Normandy, hundreds of delegates from around the world gathered in Bretton Woods, New Hampshire to determine the future of the global financial system.
The vision was simple: America would be the center of the universe, and every other nation would revolve around the US.
This arrangement ultimately led to the US dollar being the world’s dominant reserve currency which still remains today.
Whenever a Brazilian merchant pays a Korean supplier, that deal is negotiated and settled in US dollars.
Oil. Coffee. Steel. Aircraft. Countless commodities and products across the planet change hands in US dollars, so nearly every major commercial bank, central bank, multi-national corporation, and sovereign government must hold and be able to transact in US dollars.
This system provides a huge incentive for the rest of the world to hold trillions of dollars worth of US assets– typically deposits in the US banking system, or US government bonds.
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WNU Editor: Everyone in the world wants an alternative to the U.S. banking system .... everyone. And while Ripple is an interesting development (see above video) .... it will probably be a few more years before U.S. financial dominance has been replaced because of developments in technology and the unwillingness of foreign customers to use American financial institutions.