World Reserve Currency. IV.

Today I elaborate on criterion III, viz., "the currency must have a widely accepted value (even if such value fluctuates moderately). "

What destroys a nation's currency ? I mean actually destroys it, not the hyperventilation of the pundits about a bit of inflation.

1. Loss of a major war.
2. Revolution.
3. Close calls with either of the above.

Over the past 100 years, China, Germany, Japan, France, Italy, Spain, Russia and Great Britain have all suffered one or two or all of the above. The US has not.

What nation NOW has the military power to forestall ANY concern about loss of a major war?

The United States of America.

What nation has had a stable, democratically elected republic for over 200 years ?

The United States of America.

What nation's currency has over 100 years of continuous value for the purchase of goods or services ?

The United States of America. I recently received a quarter minted in 1910 as change at a drug store. That quarter was still accepted as true money. This is NOT true for even the British pound. Old currency is NOT accepted, but must be turned in at the Bank of England with great inconvenience.

I have a few hundred Deutche Marks in my safe that are now effectively worthless, as the Euro has replaced them. But old US currency even the 19th century is still acceptable as money. It's actually worth a lot more than its face value to collectors. But that money is still money.

What nation has a large enough economy to permit other nation's to be assured of being able to actually spend the money they hold as reserves for their own currency?

The United States of America.

Recent news reports show that nation of big mouth leaders, Red China, refusing to let Coca-Cola purchase even a simple juice company. So much for any value for the Chinese yuan in size. Government permission is needed to spend it. And that means risk of confiscation.

Markets

JPM good earnings. Fido Fund owns a good bit (average price 22) for the long term ... uh ... that is until it hits 45. hehe.

Word of the Day

"Wain" - noun [$10] archaic.
"Wainwright" - noun [$10]
Wain means a wagon. Wainwright means a wagon maker.
Sentence: LBJ's "anti-poverty" programs created poverty by providing incentives to climb onto the wain to ride while others pulled it. The Reagan years of supply side provided incentives to become a wainwright (metaphorically), not a mere rider. And the Clinton welfare reforms pushed many of the lazy riders off the wain.

Le Mot du Jour

"Agacer" - verb, regular -er conjugated like commencer.
Agacer means to irritate, to annoy; to egg on.
La Phrase: Une personne certaine qui commente sur ce blog s'amuse à agacer tout le monde. C'et liberté.
Sentence: A certain person who comments on this blog enjoys himself by irritating everyone. That's freedom !