If you are, consider changing your passport color. Apart from the tough times ahead for the world, things are already looking particularly troubling for those stuck in the States. You might recall the media reporting that international (read Swiss) banks were considering whether to cease serving US clients because of various new laws.Goldman Sachs has decided to make its offering of Facebook stock unavailable to Americans! An American investment bank, an American company, but no Americans allowed. Goldman blames it on securities law. The key point is that America is falling apart law by law. Not just dollar by dollar.
By taking the world off the gold standard and making US dollars an unbacked global reserve currency, you have a new revelation. Nations other than the US need to buy US dollars to trade. They'd agree to this (or have so far) because everyone else used the dollar to. It was convenient (liquid) and with the largest economy in the world for many years, the U.S. currency was also the most stable and reliable store of value.
The flaw in the design of the dollar standard system is that the US Federal Reserve can simply print more dollars to pay for its overseas spending sprees. This is convenient, as it costs nothing to create US dollars. The American economy cannot run out of what needs to be handed over when it runs trade deficits. It simply prints more dollars. Charles De Gaulle is said to have called this an "exorbitant privilege".
For more: Bernanke the Alchemist
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