First, the denial. If you tell someone that the dollar will drop by half, they say it is impossible. Someone said that to me again yesterday (without even reading the article in front of him... how typical). But of course, the dollar dropped by half during the Reagan Administration, etc., and over the course of the last 7 years, it has dropped another 40%, so this is nothing new.
Second, the scared stage. Paralyzed like a deer in headlights is no way to figure out how to dodge problems.
On October 6, 2009, the top story at The Independent was the report of meetings by Russia, China, Japan, France, and the Gulf States, to end the use of dollars for oil and gas by 2018 and to move to a basket of currencies and gold.
"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."
The reaction was indeed furious.
On one side, "Don't be ridiculous. This is some stupid conspiracy theory."
On the other side, "Well of course they are meeting. Why is this 'news'?"
The official reactions were things like: "I don't know anything about that", and "Only God knows the future".
Ha ha ha ha ha...
The timeline of 2018 to transition out of the dollar just seemed too long to me... a veil to make the problem seem less urgent.
Then, on Wednesday, this:
Russia is ready to consider using the Russian and Chinese national currencies instead of the dollar in bilateral oil and gas dealings, Prime Minister Vladimir Putin said.
...
We are ready to examine the possibility of selling energy resources for rubles, but our Chinese partners need rubles for that. We are also ready to sell for yuans," Putin said.
And then, this:
Oct. 15 (Bloomberg) -- The dollar may drop to 50 yen next year and eventually lose its role as the global reserve currency, Sumitomo Mitsui Banking Corp.’s chief strategist said.
Story in Japanese
See? A divine comedy being staged, with some pretty rough props, effects, and stage management...
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