Zoellick predicts the decline of the dollar

Expert after expert has been writing obituaries on the decline of the US dollar. Robert Zoellick, the World Bank president is latest to join the chorus. And he has argued rather vehemently on the dollar's place in the global scheme of things. Zoellick is of the opinion that the US dollar would lose its favored position as the Euro and the Chinese Renminbi gain in influence. “The greenback's fortunes will depend heavily on U.S. choices. Will the United States resolve its debt problems without a resort to inflation? Can America establish long-term discipline over spending and its budget deficit?” is how Mr. Zoellick chose to put it across.





With the US Government hell bent on turning on its printing presses at full throttle, its balance sheet has started resembling that of a banana republic and such countries are quite likely to default on their interest payments, thus making the holders of the US dollar extremely nervous. Little wonder Zoellick feels that investors in the US dollar might switch to stronger currencies like the Euro and the Chinese Renminbi, thus increasing their influence and vastly reducing that of the US dollar.