Central Bank Of South Korea: Dollar To Lose Edge As Reserve Currency

Not many words needed for this. This is happening faster than a lot of people happening. It is not an if, but when situation. The only way to change this would have been to go back to decent monetary policies and shutting the Fed down and covering the dollar short of the Fed which I am calculating to be around 35,000 metric tones at this point. Other experts put it closer to 50,000 metric tones. To give you a benchmark, the total gold ever mined in the history of the world is around 160,000 tones. This is a very explosive situation for gold. Gold at $50,000 at today's purchasing power is not as crazy as it sound if you realize the grimness of the situation and have a vision. 

Here is the article:

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S.Korea BOK report: dlr status may fade over time

Reuters - Sunday, February 28

SEOUL, Feb 28 - The U.S. dollar will likely remain the world's leading reserve currency for the next five to 10 years but may lose its edge over a longer period, a South Korean central bank report published on Sunday said.

The world could see multiple reserve currencies sharing the leading status 20 to 30 years from now, due to weakening confidence towards the dollar and the rising influence of other currencies such as the euro and yuan, it said.

"The global monetary order is expected to enter into a multi-currency system with currencies such as the dollar, euro and yuan competing each other to become the leading reserve currency," the Bank of Korea report said.

It said the weight of dollar assets in global foreign reserves had already fallen to 61.6 percent by the end of September 2009 from more than 80 percent in 1977, whereas the euro's has risen to 27.7 percent from 17.9 percent in 1999.

It is rare for the Bank of Korea, which manages the world's sixth-biggest foreign reserves, to publish a report commenting on such a sensitive topic, although the authors said the paper did not necessarily represent the central bank's stance.

There has been a heated debate around the world over whether the dollar deserves its current edge as the world's leading reserve currency even after a financial meltdown in the United States sparked a global crisis.

But a Reuters survey published in November last year also showed foreign exchange strategists expected the dollar's edge as the world's leading reserve currency would be chipped away only slowly. [ID:nL4118682]

The report suggested South Korea prepare itself for the changing global monetary order by boosting the use of other currencies in foreign trade and bolstering transactions of non-dollar currencies in the local market.

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