US Would be Better Off If Dollar Were Not Global Reserve Currency

link here to article

This article is a bit technical but it makes several very interesting points about how the advantages that the US derives from the status of the dollar as the global reserve currency is outweighed by the disadvantages. It also claims that it is not good for the Asian countries that have taken advantage of the dollar's reserve status to develop export based economies predicated on undervalued currencies. It would be better for the global economy if the US were to take the steps that would eventually unwind the dollar from its current position as the sole reserve currency.

The problem for the US is that it has to choose between accepting high unemployment or debt because of the use of the dollar's status in Asia. The US has chosen debt. China and Japan overproduce which also results in high debt. China's strategy is to import foreign demand and to use its high savings rate to export capital. That strategy is like the colonial strategy of the past. The UK, for example, imported demand from its colonies and exported its savings to the colonies for investment.