Quote Originally Posted by Fabius Maximus View Post
Shek, it is not hyperbole to say this is "potentially a regime changing event". Most major experts in the field have said so, in one form or another. The BWII system assumes accellerating debt accumulation in the US, matched with US dollar reserve accumulation by foreign central banks.
FM,

My "hyperbole" comment is how you described the potential realignments as the end of the post-WWII financial order. The end of the post-WWII financial order was the end of Bretton Woods and the fixed exchange rate regime around the nth currency, the dollar, and its peg to gold. There have been financial crises that have come and gone since the collapse of Bretton Woods. If you were to describe the ongoing events as the potential for dollar hegemony to end, then your statement would be on the mark.

Given that, however, it is still not a big fundamental issue. There would be some rebalancing pain, but not a long-term impact. While I'm not a fan of Paul Krugman's NYT columns or his inequality crusade, he is a solid international economist, and I offer up the following two pieces written by him on the impact of the end of dollar hegemony.

http://web.mit.edu/krugman/www/seignor.html
http://www.ecn.wfu.edu/~cottrell/ope...0407/0079.html