“That is a recipe, very quickly, my friends, business people here, for the American dollar to cease to be the reserve currency of the world, which is already bubbling out there,” Kerry said.Just in case I'm writing poorly, let me be extra-tedious in explaining what's going on here. Obama and his minions, or whomever the puppet master is, decided we must negotiate with Iran. I don't know why we must, but they say We Must Negotiate. And by "with Iran", that means the current hard line, anti-American, anti-Western regime. Furthermore, Obama said that very early in his career, before he was elected president. Then, in the "Green Revolution" of 2009, when there was a genuine chance to help pro-American students and others overthrow the ayatollahs, and change the regime Obama blithely let the regime kill the protesters in the street. Years later, the Obamanoids finally get into "negotiation" with Iran. By all accounts they bent over backwards and gave away the farm. And now, because we are genuinely concerned that this is a bad deal, when we didn't necessarily even want any deal with the ayatollahs in the first place, Kerry and these guys, who work for us, are telling us that if we reject the deal we're the problem. We're going to cause the economic world to collapse. Are you familiar with the word chutzpah?
Zerohedge has the story, with an angle nobody else seems to have. Almost one year ago to the day, August 27, 2014, Obama's former Chief Economic Advisor, Jared Bernstein, published an op ed in the New York Times declaring that it was time to stop being the world's reserve currency! They want the dollar to be "Dethroned". They don't want to be the world's reserve currency.
Assume for a moment this guy knows what he's talking about and "reserve status is a curse"; what's the other side? Why should we care if the US is the world's reserve currency? What "reserve" means is that other nations have a central bank that keeps US dollars instead of some other reserve. In the days when all nations were on a gold standard, they kept gold. There are trillions of these dollars out there. I don't know an accurate number but I've read around $3 T and there's reason to believe that the unofficial and black markets account for more than that. If another currency becomes the reserve, those countries don't need those dollars, so they go into circulation. That puts those 3 Trillion into the pool with another $1 Trillion in circulation in the US, diluting the value of those dollars to 1/4. If there are four times as many dollars in circulation, each one will be worth 1/4 of what it was before the decision. After that, more disruptions would follow. Currently the world market for oil is priced in dollars. When that stops being the case, the use for dollars to buy oil goes away and those dollars flood back. As other currencies shift in value, our debt payments would inevitably change, most likely for the worse. China's recent devaluation of their yuan has this effect.
David Buckner, adjunct economics professor at Columbia University (yeah, they sometimes hire sane profs!) was interviewed by Glenn Beck yesterday about this. It's a good interview and (as far as I can see) not behind a paywall. You can listen.