If one is going to go after sacred cows, one should really go after sacred cows. Most of the people in our society who get credit for "going after sacred cows" are just going after unfashionable ones. At least ones that are unfashionable in the circles they want to appeal to. We live in a world of iconodules posing as iconoclasts.

Tuesday, October 13, 2009

They'd be Insane Not To

There's sound and fury about a move away from the dollar as the international reserve currency and unit of exchange for pricing commodities.

Here in America, note of this is often accompanied with an undertone of shock, appalled at the idea that other countries are scheming against the dollar and plotting to replace it. Even those Americans who recognize that our current policies are devaluing the dollar and run a nontrivial risk of leading to hyperinflation seem to have this attitude.

But really, can one blame anyone in the world for seeking a refuge in the face of this building storm?

No. Instead, one should be advising Americans to get out of dollar-denominated assets as much as they can, and invest in things that will retain their value in the face of a devalued dollar.

This is unfortunate, and sad, and the U.S. Government is insane to risk losing one of America's most important assets, an asset they clearly under-appreciate and take for granted, the status of the dollar as the world's reserve currency. But if we cannot convince them to change their policies, which are self-destructive, we cannot blame others for seeking to shield themselves from the consequences of these deranged policies, and indeed would be wise to do so ourselves.

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