Wednesday, December 29, 2004

Even drug dealers are giving up on the dollar.

Daniel Gross in Slate reports on the decline of the dollar (and the corresponding rise of the Euro) as a reserve currency.
[T]here are signs that we're losing some of the most devoted fans of the greenback: drug dealers, Russian oligarchs, and black-market traffickers of all kinds.
Strange as it may seem, the fact that we are losing favor as the currency of choice is not as silly a concern as it may seem. Gross quote James Grant to the effect that "between 55% and 70% of the $703 billion of U.S. currency outstanding circulates outside the 50 states."

Most of this money is a loan that the rest of the world is giving use that we will never have to pay back.
[M]any of those bills never return to our shores to be redeemed for anything we make or produce. Instead, they stay under mattresses in Bogotá, circulate in Iraq, and are stashed in bank accounts around the world.

No comments: