Wayward sentinels of the $

The  ongoing fiscal discord within the US,its $ 17 Trlln external debt and the nearing deadline that could prevent it from servicing the same ,is  not much different but for scale, from the fiscal-economic  travails of other world economies in a stasis,except that the dollar is the world currency.We saw the huge tranche of monthly QE ,on for many months now , playing havoc with cross -currency evaluations across the globe. If the onset of QE was unsettling ,the rumour of its tapering down was more unnerving.If the QE was the invading phase of the monetary Tsunami ,the looming default could be  the receding one.That is the exorbitant privilege of the Dollar  to terribly unbalance ledgers of every nation. Worldwide there are  trillions  in  overnight  repo’s between banks that use US  Treasuries as the collateral for these short term loans. Should these instruments of exchange became suspect and
unacceptable as collateral, financial markets would effectively collapse . Should their value plunge sink, banks capital ratios may go below statutory limits. If there were an actual default then banks would illegally be holding a defaulted instrument as part of their primary capital.The default may not take place at all or even if so,the inundation of global economic shores may remain contained, but  these custodians and printers of the world currency currently  appear to be treating their extremely onerous obligations as cavalierly as an oversize banana republic.Perhaps time that the global exchange gets a basket of mature currencies to replace  an increasingly wayward nation's dollar .
    ( PUBLISHED ECONOMIC TIMES : OCT 16 )