I have certainly considered this scenario many times, of how the dollar regime might evolve, and the one discussed below remains one possible outcome.
There is an intense international discussion going on about the future of the international currency system, and relations in general. I have referred to this generally as the 'currency wars' for some time.
Most Americans have yet to notice this, due in no small part to the silence of the mainstream media. If the US and the BRICs cannot engage in a rapprochement over the future of the international monetary system, and keep pushing a hard line for a US dollar hegemony, then of course the BRICs may pursue those discussions by other means.
One way to do this would be to revalue gold at let's say $10,000 per ounce, and use it to partially back their own currency, or currencies. Bill Holter does a good job of outlining that in the article excerpted below. [...]
So grab something solid and hang on. I don't know enough to be able to predict how this will turn out, and anyone who might be able to do so realizes that the fog of war is descending quickly. Predictions and guesses are cheap, and will become even more plentiful as things progress. But knowledge is the coin of the realm.
There could be rough waters ahead, mateys. But one can always hope that cooler and wiser and stronger heads will prevail. This will play out slowly, until something happens, and then events may being to move rather quickly. Pray for the best, and prepare for the worst.
[...]
"Next Tuesday, Vladimir Putin will meet with Chinese President Xi Jinping, I believe that the odds are quite high that an energy deal will be announced where Russia will supply China with oil and gas and that infrastructure (pipelines) will also be built to the express exclusion of the dollar. Please understand that this is not a deal where a few million barrels of oil are sent and then get settled for, no, this will be a very long term partnership which is why the infrastructure will be built.
My intent was to explain that China has imported 1,000′s of tons of gold over the last several years and that they (even though their system is very highly leveraged just as ours) have prepared themselves for what is coming. 'What is coming' is that China will have just as many massive defaults as the U.S. will …but with a “small difference.” I believe that China will mark gold up to an arbitrary number of let’s say $10,000 per ounce which will do a number of things. First, this will make China’s holdings worth much much more which can and will be used as collateral to steady their debt markets. This collateral will serve to re liquefy the banks AND back their currency should they wish to (I believe they do).
Another added 'benefit' is that this will expose the fact that the West no longer has any gold. The dollar will go into a spiral because not just 'one lunatic' like Saddam Hussein is proposing to no longer use dollars. No, we are talking about 2 major oil producers and our largest trading partner who may just be the largest economy in the world having eclipsed us. Another little tidbit is that these 3 taken together were for years the absolute arch enemy of the U.S. and now they are forming a unified triad where Russia and Iran can say, 'Hey, you told us not to use dollars anymore, we’re just doing what you’ve told us to do.' Talk about forming 'policy' without looking 5 seconds into the future, our sanctions would be the definition of this."
Bill Holter,
They Don't Need Us, We Need Them
