Sanctions and the U.S. Dollar -- A Fall From Grace?

[unhappycamper]

http://www.opednews.com/articles/Sanctions-and-the-U-S-Dol-by-Conn-Hallinan-Brics_Crisis_Economy_Finance-140824-645.html



Sanctions and the U.S. Dollar -- A Fall From Grace?
By Conn Hallinan
OpEdNews Op Eds 8/24/2014 at 23:51:24

The recent round of sanctions aimed at Moscow over the crisis in the Ukraine could backfire on Washington by accelerating a move away from the dollar as the world's reserve currency. While in the short run American actions against Russia's oil and gas industry will inflict economic pain on Moscow, in the long run the U.S. may lose some of its control over international finance.

Proposals to move away from using the dollar as the international currency reserve are by no means new. Back in 2009, the Shanghai Cooperation Organization (SCO) proposed doing exactly that. SCO members are Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. Afghanistan Iran, India, Pakistan and Mongolia have SCO observer status, and the organization has close ties with Turkey and the Association of Southeast Asian Nations.

Ever since the 1944 Britton Wood Agreement, the world's finances have been dominated by the U.S. dollar, the International Monetary Fund (IMF), and the World Bank. But, according to economist Jeffrey Sachs, that world is vanishing and the dollar cannot continue to hold the high ground, because "the role of the United States in the global economy is diminishing."

While it may be diminishing, the U.S. and its European allies still control the levers of international finance. For example, the U.S.' slice of the global GDP is 19.2 percent, and its share of IMF voting rights is 16.8 percent. In contrast, China, with 16.1 percent of the global GDP, has only 3.8 percent voting rights in the IMF. The presidency of the organization is reserved for a European.

[jakeXT]

1. What did Hudson say ? "There is no need for Russia to import chickens from Arkansas"

(It starts at 14:00 minutes)

http://michael-hudson.com/2014/08/america-unzipped/