If you live in the U.S. and use U.S. dollars, then what are the implications for you? Again, the use of other currencies in international trade, particularly for oil, is going to be a slow transition. It isn’t going to happen in a day. But there will likely be marginal differences that can add up over the course of a few years. If you are in the U.S., the goods and services you buy from overseas may become more expensive. This will depend on China more than any other country. The Federal Reserve’s money creation will not be absorbed as well. If there is less demand for U.S. dollars, then prices will rise (assuming everything else stays the same). As the dollar slowly loses its status as the world’s reserve currency over the next several years, you will want to be invested in commodities and other hard assets. This will likely include oil and precious metals. It may even include real estate, but certainly not in China.
Posted on: Sat, 12 Jul 2014 08:49:17 +0000
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