The World and The Ratings Agencies Now Question the Reserve Status of the Clown World Fun Bucks

It was described as "the exorbitant privilege" by the French when describing the Dollar being recognized as the world's reserve currency.

The fat lady is now singing.

The path toward the Dollar's dethroning started when Obama was in office.  One ratings agency, S&P, dared to downgrade US debt in 2011.  Obama was not pleased and S&P retracted its criticisms.

Was S&P wrong then?  I don't think so.  I think they were early.  And, importantly, S&P's voice was alone.  S&P's concerns were valid in 2011 but they folded under intense political pressure.

The king had no clothing back then and it still parades around naked but it has been able to browbeat people into silence.  Until now.

If you take off the rose colored glasses and take a hard look at what this country, its leadership and the electorate in total looks like (think "Great American Voters"), do you see a nation that should have its currency serve as the world's reserve currency?  Don't get me wrong.  I see a lot of very good people who work hard, have their shit together, keep up their lawns and mind their own business.  Unfortunately, I also see a whole lot of complete idiots, ass-hats, bullshit artists, deadbeats, etc. that are "a waste of skin" to use one of my neighbor's phrases.

The Wheels Are Starting to Come Off

When an economy is 70% consumer spending and a large part of that consumer "spending" is driven by the use of credit, you get a very fragile situation.

Rising rates will slow some spending.  Higher standards and tighter underwriting when generating new loans will slow a lot of spending.  That is where we are today.  Nothing sobers the mind of greedy bankers more than losses and failure.  Poorly supervised banks are feeling the sting.

It's hard to "spend" what you don't have and for many "Great Americans", they can "spend" only that which they are able to borrow.

I'm enjoying the compounding interest.  Tomorrow, I will renew a certificate into a new certificate that has a higher rate than what I received last year.  It's a good time to have some money that can "climb the ladder" of increasing interest rates.