We could be seeing the beginning of the end, which has been years in the making. At first glance, the uninformed reader would say “Zimbabwe? Big deal.” However, avalanches don’t start off big, America’s enemy list is exponentially growing world-wide and is far from being untouchable, but most people who invest their time following the Kardashians couldn’t tell you that. As long as the malls are still open, everything is fine.
When the Zimbabwe currency collapsed, they began using U.S. dollars. It was a pretty smooth transition because at the time (2009), the dollar was really very stable. As the global reserve currency, the dollar attracted a great deal of support during the financial crisis. Of course, there were a few problems. One was that while there were plenty of dollar bills to use, there was very little change (meaning coins). The New York Times wrote a story about this reality in 2012:
Zimbabwe’s central bank has announced it would accept the Chinese yuan and three other Asian currencies as legal tender as economic relations have improved in recent years.
[Click here to read the story….]
Yes, it does make sense since trade with China is increasingly important. But this should be watched carefully as it underscores the reality that the American dollar is not the only currency in the world. And, there is little economic reason for Africans to convert to dollars in order to do business with China. Our arrogance regarding this puts us at serious risk. It is essential that we grasp just how dependent we have come to be on the dollar remaining the reserve currency of the world. Our ability to finance and maintain our debt depends on this status yet many outside the U.S. are not only willing to operate without dollars but in some cases are actively working to remove the dollar’s use. Here are a few reminder posts on that:
Full article: Zimbabwe Adopts the Yuan (Global Economic Warfare)