"Every perception is to some degree an act of creation, and every act of memory is to some degree an act of imagination."

-- Gerald Edelman, Second Nature: Brain Science and Human Knowledge
4 The Capital War6 The Capital WarThe Capital WarChapter 7: US-China Relations and Wars2020-10-18JournalThe most often asked question regarding the dollar is, “How could the United States lose its reserve currency status when there are no good alternative currencies to replace it?”  So let’s look at that question more closely. The reserve currency assets and their current percentages of total foreign exchange reserves held are as follows: These six are used in these amounts because of both historical reasons and the fundamentals that affect their relative appeal.  As explained and shown in charts earlier in this study, a reserve currency’s usage, like a language’s usage, lags the fundamental reasons for using it by many years because the usage of currency is not easy to change.  Right now the four most used reserve currencies—the US dollar, the European euro, the Japanese yen, and the British pound—are of the old leading empires of the post-1945 period though they have limited fundamental appeal.  They came from the G5 countries and are about as anachronistic as the G5 is. Continue reading…