From Daily Reckoning
''What do you think would happen if the US suddenly became competitive and financially prudent? What if it started producing trade surpluses? It would be disastrous for the global economy. Global liquidity would dry up...there would be a massive credit crunch.
So the system depends on US profligacy. The US may enjoy an 'exorbitant privilege' in the words of former French President Charles De Gaulle , but it's one that has benefitted - and we use that term loosely - the world in terms of delivering debt-based economic growth.
But for how much longer? Triffen identified the problem way back in the 1960s. Since then nothing has changed. The dilemma is now so big that it can't be undone or reversed. The dual role of the US dollar as national and international currency is no longer viable.
So what happens next? Well, we can guarantee that any change will not be smooth or voluntary. The maintenance of the 'system' has many powerful beneficiaries. Which is why they'll hold on until the death before change forces itself upon us.''
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