Bad News for the US Dollar: IMF Calls for New Reserve Currency

Shut down the printing presses or America will pay an even bigger price than just a devalued dollar. Two much US currency used to stimulate the economy without much success is the discussion of the International Monetary Fund. Their latest report says replace the dollar with a new reserve currency that will hold its value. This is all done to protect lenders who have invested heavily into US treasury bonds. Obviously when the Federal Reserve floods the market with dollars, it lowers the value of the dollar which lowers the worth of these bonds.

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.

So what does this mean to Americans? As long as the dollar is used as the reserve currency, the United States has control of what that dollar is worth. If they are successful in moving to a different currency, Americans will see prices rise as the weak dollar will need more dollars to equal the worth of the chosen reserve currency. In other words, you think $3 a gallon gasoline is expensive now, just wait until the US dollar is no longer the standard to define the value.