Historically, the end of the dollar's hegemony as the reserve currency of the world has always been nigh, and perhaps always will be.

Until the early 1970s, a service we provided those foreigners who used dollars was the ability to convert, at will, their US dollars to gold at a rate of $35/ounce. This had become harder and harder for the US to support, and before the gold standard collapsed, the US had made it illegal for its own citizens to own gold beyond amounts used for jewelry, and certainly its own citizens could not convert THEIR US dollars to gold.

And finally in the early 1970s, the wheels came off the bus, or at least it was acknowledged that the wheels were gone, and we said "OK the end, no more gold for Dollars."

So one might expect that to have been the end of the US Dollar as world reserve currency. Except it wasn't. Fifty years later, and a factor of N (sorry not looking it up) inflation later, the US is the ONLY superpower in the world and its government continues to fund itself by spending the inflow of dollars being repatriated by foreigners who think American assets are just worth some crazy premium.

And we learn, perhaps, the oddest thing: no matter how bad we think we have screwed up, the rest of the world is still more screwed up than us. I mean, theoretically it seems that at some point we could kill the golden goose, or at least choke it with legalized corruption and crazy theories of social justice and libertarianism, but so far we have not.

Which isn't to say that one day, the headline "The Sky is Falling!" may not be correct, but at least historically, it does not seem to be the way to bet.

R:)