US Banking Troubles Herald End of Dollar Reserve System – Asia Times

NEW YORK – The American banking system is broken. That doesn’t portend more high-profile failures like Credit Suisse. The central banks will keep moribund institutions alive.

But the era of dollar-based reserves and floating exchange rates that began on August 15, 1971, when the US broke the peg between the dollar and gold, is coming to an end. The pain will be transferred from the banks to the real economy, which will be hungry for credit.

And the geopolitical consequences will be enormous. The confiscation of dollar credit will accelerate the shift to a multipolar reserve system, benefiting the Chinese RMB as a competitor to the dollar.






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