more boring economics stuff

[ajva]

I know people must think by now that I'm some kind of nutter Jeremiah-esque permabear muttering away in the corner and stinking of whisky, but in case you were wondering, it's things like this graph that make me wonder if we could be facing a total global meltdown economically, originating in the fundamental insolvency of the world's banking system.

Just saying. *swigs from bottle in brown bag*

Mind you, I remember my Dad saying something similar back in 1986 or thereabouts, so I expect everything will turn out OK.

Comments

[ajva.livejournal.com]

Well, it's an interesting thought, but I think the significance of this has been a bit overdone. Certainly any shift to an alternative currency as the world reserve currency bodes ill for the dollar in the long term, but all fiat currencies (and indeed other assets) are just engaged in an ongoing beauty contest to a certain extent. The refusal of an oil supplier to take dollars won't kill the dollar; it's more of a symptom of a loss of confidence that has its roots in more structural economic factors. You could also argue that there is an element of political PR in such decisions, of course, but that's another discussion.

Anyway, Euroland can't be complacent; as countess_sophia points out below, the global banking fraternity is an internationally incestuous bed these days. The US isn't an island, entire of itself.