Could The U.S. Dollar Could Be Replaced As The World Reserve Currency?

Online, May 11, 2011 (Newswire.com) - Financial advisor Dennis Tubbergen frequently discusses U.S. and world economics in his online blog and in his Moving Markets™ newsletter. One of Tubbergen's recent blog topics was the possible collapse of the Euro.

Now the financial advisor, advisor to financial advisors, author and radio talk show host is looking at the possibility of the U.S. Dollar being replaced as the world reserve currency.

"While doing some research this week, I found an article from CNN Money published February 11, 2011," begins Tubbergen. "If you're an American conducting business in U.S. Dollars, this should be very frightening to you."

Tubbergen refers to a quote from the CNN article as follows: "The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency. The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system."

The article goes on to explain that SDRs were created by the IMF in 1969 and can be converted into whatever currency a borrower requires. According to CNN, the IMF has a history of lending funds denominated in SDRs to borrowing countries.

CNN's article also argues, "The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in U.S. policy."

Among other things, the Fund also maintained that assets such as gold and oil, which are currently traded in U.S. Dollars, could instead be priced using the IMF's Special Drawing Rights.

"The translation here - the rest of the world, which is dependent on U.S. Treasuries and the U.S. Dollar to execute transactions, is fed up," claims Tubbergen. "The massive printing of money by the Federal Reserve devalues the Dollar and causes problems for the rest of the world - namely inflation and the devaluing of reserve assets."

The CNN posting goes on to quote billionaire real estate magnate Sam Zell, who stated, "I can't imagine anything being more disastrous to our country than if the dollar lost its reserve-currency status. I think you could see a 25 percent reduction in the standard of living in this country if the U.S. Dollar was not longer the world's reserve currency."

Zells also warns that if the U.S. Dollar loses its current status, interest rates will go up or the dollar will go down.

"As I've said, debt and reckless spending always have consequences, even if those consequences are not immediately obvious," concludes Tubbergen. "If the U.S. policymakers continue to try to solve our debt problems indirectly by printing money, the victims will be the American public."

Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in the USA Wealth Management Building in downtown Grand Rapids, Michigan. Tubbergen is CEO of USA Wealth Management, LLC and has an online blog that can be viewed at www.dennistubbergen.com. His weekly talk show The Everything Financial Radio Show is simulcast on two Michigan metro stations and also airs to over 600,000 financial advisors, with recent podcasts available at www.everythingfinancialradio.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.