In another sign that the United States has been sliding deeper into a potentially dangerous financial position, the IMF once again repeated a call for the world to create a replacement for the dollar as the global reserve currency. Further weakening of the dollar vs. the Euro and other global currencies has been cause for concern. Volatility in the dollar is said to poorly represent the global economy instead being directly tied to changes in U.S. policy and economic conditions.
Experts claim that creating a more stable global currency standard could help to reduce the impact of energy and commodity price spikes that are directly related to the U.S. dollar. Since gold, fuel, and other commodities are priced in dollars, large fluctuations in the value of the dollar can have far-reaching worldwide impacts.
Despite the recent firming of the U.S. dollar, global concerns over growing budget deficits and increased spending are likely to continue to put pressure on the dollar until the underlying fiscal policies begin to change.
While no current dollar alternative seems poised to pose an immediate threat to make a legitimate takeover bid, support is growing stronger around the world to move to a system that more accurately reflects the global economy.
The world is still spooked from the most recent recession and while a recovery is clearly underway, avoiding a repeat of one of the sharpest economic downturns in the history of the modern world is going to remain politically popular for the foreseeable future.