The U.S.
dollar continued its six-month slide Tuesday
amid a growing
international chorus that wants the dollar
replaced -- or at least supplemented -- as the
world's reserve currency, a move
that would end the greenback's six decades of
global dominance.
Further, large emerging economies -- such as
China, Russia, Brazil and
India -- are tired of kow-towing to the American
buck, and sense an opportunity to knock a
weakened dollar off its imperial perch.
"The
U.S. dollar is headed for also-ran status, and
it will continue to lose its value against many
other currencies and assets," Miller Tabak
equity strategist Peter Boockvar said.
"The rest of the world
wants the U.S. dollar to lose influence, but no
one wants it to be abrupt, as it's in no one's
interest. An evolutionary process is
what is wanted."
"In
the next two to three years, it is highly
unlikely to see the dollar replaced," said Eswar
Prasad, an economics professor at Cornell
University and a senior fellow at the Brookings
Institution in Washington.
"Over the next decade, though, we would expect
to see other currencies play a much more
significant role."
Other
nations have followed China's criticism. In
March, Kazakhstan criticized the dollar and
called for the creation of
a new currency it calls the "acmetal" (a coinage
combining "acme" and "capital"). Last
month, Iran shifted its reserve currency from
the dollar to the euro, a move that is likely
more political than economic and a response to
harsh U.S. criticism of Iran's nuclear moves.
Both
China and Russia have
called for a new "global supercurrency," similar
but larger in scale to the euro, that would
replace the dollar.
Even the world's big
financial institutions are piling on.
"The United States would be mistaken to take for
granted the dollar's place as the world's
predominant reserve currency," World Bank
President Robert Zoellick said in a speech last
week.
