Russian Prognostications on the Dollar

For many months now, Russian private and public financial institutions have been trying to determine what will happen to the US dollar and the global economic regime it underpins. As the rubble swung to a new low following the collapse of the oil prices and as the dollar value keeps fluctuating, many in Russia are trying to figure out if the dollar will still remain the official currency for too long. Business daily "Fiansoviye Izvestia (Financial News) has recently published six possible scenarios about the fate of the American currency:

1. Most favorite "conspiratorial" scenario - United States will stop using the dollar in favor of an "Amero"- common unified currency of America, Canada and Mexico. The exchange rate of amero to dollar will be 1 to 10. All investments made with a dollar will lose most of their value.

2. The United States will print an entirely new "dollar," citing the concern that too many counterfeit dollars are in circulation. At the same time, it will refuse to accept dollars from beyond its borders, where the majority of dollar cash is circulated. Therefore, all cash in "people's mattresses" will become worthless.

3. America will stop printing a $100 banknote. The majority of such "Benjamins" are in global, not American, circulation.

4. America will announce a technical default. Many experts state that such is impossible for an economy of its size, because the American economy would lose much of the world's confidence. However, the United States changed the rules of the financial game many times before, thus becoming the principle global power in the process.

5. America will continue to print the dollars, causing greater inflation and the dollar's devaluation. The dollar will then crash, which will solve the problem of decades of borrowing cash from overseas.

6. The global financial system will be restructured entirely. Soon enough, many regional currencies will replace the dominant dollar. Some predict that within a decade there will be several such currencies, produced by countries united into economic and currency unions. The European Union has already started down this path, and there are similar deliberations among some Arab, Asian and Latin American states. Russia is currently looking at a plan to unite its rubble with currencies of other former Soviet states.