by James Rickards
Daily Reckoning
1) Is tomorrow THE day that the dollar “dies” and is replaced?
Tomorrow, Sept. 30, is when the International Monetary Fund (IMF) officially adds the Chinese yuan to its basket of currencies comprising its special drawing right (SDR). It has enormous long-term implications for the dollar.
Does that mean the dollar becomes worthless overnight? Of course not. Tomorrow’s event may not even make major headlines. You won’t hear about it in the news. And it won’t cause the dollar to crash immediately. This is a development with long-term implications, but in itself, it will not make waves. But that’s the point — the dollar will die — but with a whimper, not a bang.
The dollar replaced the British pound sterling as the world’s dominant currency last century. But it was a gradual process that took place between 1914 and 1944. It didn’t happen overnight, nor will SDRs replace the dollar overnight.