Sprott Money News - Ask The Expert - Dr. Paul Craig Roberts

I think that people need to be wary that the dollar could take a hit in foreign exchange markets if Russia and China and India and the BRICs--Brazil, South Africa, if they succeed in organizing their international payments in their own currencies and simply abandon the use of the dollar because that would result in a drop in the demand for dollars in the foreign exchange markets.

And unless Washington could use currency swaps with the Japanese and the Europeans to support the dollar by purchasing it, and they might be able to do that for a short period, you'll see a decline in the dollar.

In the meantime, the growth of use of other currencies could be disrupted by Washington and Wall Street and London by shorting those currencies in foreign exchange markets, or destabilizing the currencies by sending in capital inflows, driving them up, yanking the capital inflows out, driving them down.

Like it happened to Asia in the late '90s. So the outcome of this will take a while longer. But I think that the dollar is world money... that that role is over. It effectively ended by two things. One, the massive policy of quantitative easing in which so many trillions of new dollars were created in order to support bond prices.

And then on top of that, the application of sanctions. First to Iran, an oil producer and then to Russia. Because the sanctions applied to Russia resulted in essentially Russia moving much of its energy outside the dollar system. And so, other energy producers are likely to follow that.

So the dollar's time is about up. But it could continue for several more years.

- Source, Sprott Money