\n believed by the vast majority that the American dollar will be
\n overthrown,”<\/span> says Dick Bove.\n<\/p>\n
\n “But it will be, and this \n The repercussions of the dollar\u2019s decline as the foreign currency \n Bove goes further, arguing that the deadlock in Congress over the \n “The ratings agencies are \n \n Political wrangling over raising the federal debt ceiling was \n According to the Wall Street Journal, New Zealand and China are \n Though officials told the WSJ that the talks were in the \n “There is no time frame for \n “We are aware it took Australia \n If China is indeed embarking on a project to establish its \n Beyond simply removing the American currency from trade, direct \n “The No. 1 security issue we \n “It’s a thousand times more
\n defrocking may occur in as short a period as five to 10
\n years,”<\/span> he tells CNBC.\n<\/p>\n
\n holding of choice would be more than a symbolic hit to America\u2019s
\n economic standing. With a budget deficit exceeding $1 trillion
\n per year, if the dollar were to decline against other currencies
\n the US would find itself in the uncomfortable position of having
\n to pay back this debt.\n<\/p>\n
\n federal budget, and the now-mandatory cuts designated by the
\n sequestration, are eroding confidence in America\u2019s fiscal state.\n<\/p>\n
\n already arguing that the government’s debt may be too highly
\n rated. Plus, the United States Congress, in both its houses, as
\n well as the president are demonstrating a total lack of fiscal
\n credibility,”<\/span> says Bove.\n<\/p>\n![\"Hong](\"http:\/\/rt.com\/files\/news\/1f\/3e\/90\/00\/hong-kong-stock-exchange.jpg\")
<\/p>\n
\n widely viewed as the primary reason that the US debt\u2019s rating was
\n downgraded in 2011. At the time, the rating agency Standard &
\n Poor\u2019s had issued a warning that progress towards balancing the
\n country\u2019s budget was required for a return to a \u201cstable\u201d outlook.
\n In that same year Moody\u2019s and Fitch Ratings both downgraded as
\n well.\n<\/p>\n
\n currently in talks to make their respective currencies directly
\n convertible, eliminating the need to convert either country\u2019s
\n currency into dollars when making or receiving payments.\n<\/p>\n
\n \u201cvery early stages,\u201d<\/span>
\n such a plan is likely to sound alarm bells for anyone worried
\n over the dominance of the US dollar.\n<\/p>\n
\n concluding an agreement,”<\/span> said a spokeswoman for New
\n Zealand\u2019s prime minister to the WSJ.\n<\/p>\n
\n around 12 months to achieve its recent agreement with
\n China,\u201d<\/span> she added.\n<\/p>\n
\n currency as more market-oriented, then its swelling trade with
\n nearby countries such as New Zealand and Australia, which agreed
\n last month to direct convertibility with the yuan, could well
\n continue to undermine the greenback.\n<\/p>\n
\n convertibility can also make Chinese government bonds more
\n attractive as foreign-exchange assets. Australia, for one, says
\n it plans to invest up to 5% of its total foreign-currency
\n reserves to Chinese government bonds, while New Zealand\u2019s Reserve
\n Bank has thus far not made any announcements either way.\n<\/p>\n
\n have as a nation is the preservation of the US dollar as the
\n world’s reserve currency,”<\/span> said Michael Pento, president
\n of Pento Portfolio Strategies to CNBC.\n<\/p>\n
\n important than a nuclear bomb being tested by North Korea. It’s a
\n thousand times more important that we keep the dollar as the
\n world’s reserve currency, and yet we are doing everything to
\n abuse that status,”<\/span> he added.\n<\/p>\n