Dollar Will be Gradually Discarded by World

If you happened to be on a desert island today and away from any news....let me inform you USA had their credit rating lowered on Friday afternoon AFTER the markets had closed...and today the U.S. markets got hammered and lost more than 5% of its value, with the DOW Industrial Average down over 600 points.

So will the pounding continue or could the market go up by 600 points tomorrow?  Who knows??  No one knows what the market will do on any given day.  It's all currently being driven by the hourly headlines and the next headline up could tank it more or turn it around.

However, the U.S. is in a bad spot long term.  That's not a headline...it's a fact.  We have had the blessing of having the world's ONLY reserve currency for the past 70 years...which means we had a built in demand for U.S. dollars that ONLY we could have.  But what will happen if the world's investors and nations start shifting OUT of U.S. dollars and want to hold their safe wealth someplace else....like Switzerland, Australia, or Lithuania?  Suffice it to say that when that happens it will be a further drag on the USA.

In comments emailed to CNBC, Guan Jianzhong, chairman of Dagong Global Credit Rating, said the currency is “gradually discarded by the world,” and the “process will be irreversible.”

“I think the most pressing issue facing the U.S. at the moment is to reflect on the crisis which happened in relation with the debt ceiling," Guan said. "They should get a clear understanding that the continuous decline of the debt service capability will inevitably result in the outbreak of a sovereign debt crisis.”

The editorial called for “international supervision over the issue of U.S. dollars” and the introduction of “a new, stable and secured global reserve currency.”

It also noted that as its largest creditor, Beijing has every right “to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets.”

See it here;  http://www.cnbc.com/id/44050325

Notice the stuff I put in bold?  Debt crisis, discarded by the world, process is irreversible, international supervision on the printing of U.S. dollars, China DEMANDING that the U.S. address it's debt problem, etc....  This is really serious talk by the biggest lender the USA has. 

This $16 trillion debt we have is not going to go away on its own...and the looting that went on in London last night and the rioting that has gone on in Greece over the last months is what WILL happen to us when we are forced to come up with a realistic budget that doesn't allow for borrowing money from other investors and other nations.