Political & Elections

The continuing of the end for the dollar;

http://www.chinadaily.com.cn/china/2010-11/24/content_11599087.htm

I wonder why soverign nations feel they have to actually hold dollars in order to conduct trade in dollars anyway.

If Iran sends China a tanker of oil, it can be credited in Chinese banks as dollars, renminbi, or even sheckels or seashells. Then Iran can draw against the accounts for manufactured goods. No need for dollars or any currency other than good record keeping. 

Need "hard" currency? Why? No currency is as soft as one made up out of nothing every time the central government gets in a bind. The ultimate value of currency is what it can be used to buy. China can supply many, many things so the renminbi is a de facto hard currency.

Money evolved to facilitate trade. Barter was too clumsy. The logical next step is back to barter with large scale MIS systems used to track exchanges. No need for money at all.

-- Edited by BigG on Wednesday 24th of November 2010 07:26:47 AM