Friday, April 1, 2005

US Dollar Headed For Collapse?

According to this article in the World News section of the Taipei Times, my most recent post (here) may have been closer to the mark than I realized.

If so, we may not have to go to war with Iran after all. Instead we may suffer utter devastation of a different kind.
The US dollar is facing an imminent collapse and the global economy will suffer a "catastrophe" when it is rejected as the currency for trade, former Malaysian prime minister Mahathir Mohamad said in remarks published yesterday.

Mahathir [...] said a standard gold currency was now the best alternative for world trade. The dollar was retaining some value because of fears of a global economic catastrophe if it was rejected, he told a conference of some 650 chief executives from 30 countries at a conference in Kota Kinabalu on Borneo island on Tuesday, The Star newspaper reported.

"But the catastrophe will come one day because even the most powerful country in the world cannot repay loans amounting to US$7 trillion," Mahathir said.

The former premier said he believed central banks worldwide were reducing their US dollar reserves and he suspected that Malaysia was also switching to other currencies.

Telling reporters that he was giving his personal views, he warned that "unless [the Americans] change their president and have a more responsible president who will try to reduce the deficit, they will have serious trouble with the US currency."
Personal views indeed.

And a wonderful phrase: "unless the Americans change their president..." Now there's a good one!

It's a short article and you can read it here.