PIMCO: Dollar Supremacy Is Coming To An End

PIMCO portfolio manager Curtis Mewbourne is getting a lot of attention for a new report predicting the long-term demise of the dollar, or at least its end as the undisputed reserve currency.

This kind of stuff is great for sensational headlines, though Mewbourne's own argument isn't particularly sensational or novel.

It basically comes down to: The emerging economies, notably China, are coming on fast, and China is starting to do more trade directly with other countries without the need for dollars.

China for example has entered currency swap arrangements with a number of countries so that trade financing can be negotiated in renminbi as opposed to dollar terms. In addition, several countries have signed up to replace part of their foreign currency reserves with new bonds issued by the IMF and denominated in SDRs (Special Drawing Rights), a basket of currencies. (more)