See the comment in Brad Setser's blog - Brazil and Argentina are already finding other ways to pay each other, Russia may deal in euros... if no-one wants the dollar after Jesse's predicted devaluation, it may go from devalued to almost worthless.
But what will countries do, that export to the USA? Devalue their own currencies? Or demand payment in euros? Or oil contracts? Even Setser admits to struggling to understand what's going on.
Jesse also comments on a report that the Gulf States may diversify into gold.
1 comment:
I think those who export to the US -- i.e. China, Japan -- will have to start building economies that consume much of what they produce. This is not so bad; after all, Americans aren't the only ones who like big screen televisions and remodeled kitchens. :) Folks like Jim Rogers and Peter Schiff see Asian economies, many of which are built on exporting to the US, as the next boom. I tend to agree.
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