Jay Newman and Meyrick Chapman in Politico:
There’s no question about it — the United States dollar is under attack.
Finance is prone to fads, and its latest mania is de-dollarization: the notion that the dollar will soon meet its demise as the world’s preeminent reserve currency.
Everyone seems to hate the greenback. China recently crowed about its “triumphant” purchase of an LNG cargo, which was paid for in yuan and traded through China’s Shanghai Petroleum & Natural Gas Exchange. And Brazilian President Luiz Inácio Lula da Silva has called for development of a new currency for BRIC countries — Brazil, Russia, India, China and South Africa — to dethrone the dollar.
Such events attract media attention, of course, but they may just turn out to be sideshows. Of greater import are China’s arbitrary punishment of Deloitte for alleged audit failures, the summary arrest of the Mintz Group’s corporate due diligence team in Beijing and the political corruption that has long plagued Brazil.
In essence, the devil may be hated, but for all the chatter about its death, neither the numbers nor the stories support the hype. And while it’s true that the U.S. government does itself no favors by applying economic sanctions indiscriminately, spending profligately and printing money, in the immediate future, there’s no replacing the dollar and the institutions that go along with it.
More here.