The Dollar, the RMB and the Euro

Michael Pettis submits:

Barry Eichengreen had a very interesting piece in last weeks Wall Street Journal. In it he argues that we are approaching the end of the period in which the US dollar is the worlds dominant reserve currency, and suggests what that might mean for the world. Here is what he says:

The single most astonishing fact about foreign exchange is not the high volume of transactions, as incredible as that growth has been. Nor is it the volatility of currency rates, as wild as the markets are these days. Instead, its the extent to which the market remains dollar-centric.

The greenback, in other words, is not just Americas currency. Its the worlds. But as astonishing as that is, what may be even more astonishing is this: The dollars reign is coming to an end. I believe that over the next 10 years, were going to see a profound shift toward

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