James Grant is in amazement about the role of the dollar in global finance:
“Dollars pile up in Asia. Merchandise piles up here,” says Mr. Grant, as America, in possession of the printing press, has tried to achieve the “ancient hope of mankind, to live without working.”
The “fiat” dollar, he adds ruefully, “is one of the world’s astounding monetary creations. That a currency of no intrinsic value is accepted as money the world over is an achievement that no monetary economist up until not so many decades ago could have imagined. It’ll be 40 years next month that the dollar has been purely faith-based. I don’t believe for a moment it’s destined to go on much longer. I think the existing monetary arrangements are so precarious, so ill-founded and so destructive of the economic activity they are supposed to support and nurture, that they will be replaced by something better.”
Comment: The problem is that before it can get better it must get worse and who wants that?