Argument: If the dollar is globally depreciating, mass dumping of dollar can occur

Support

• “Basics of Dollarization”, Joint Economic Committee Staff Report July 1999, Updated January 2000” Another risk is the possibility that a large number of foreign users of dollars will suddenly switch to the euro or another currency, causing mass dumping of dollars and forcing the Federal Reserve to increase interest rates to prevent inflation from flaring up. But as long as the dollar continues to be trustworthy, mass dumping is unlikely. The best way to prevent it is for the dollar to continue the good performance of the last 17 or so years.”

• Currency Crises and Exchange Rate Regimes ,RGE Monitor

• MS Brazilian supermodel Giselle Bundchen announced that she only accepts payments in Euro and not in dollars
• Blbg: Jay-Z’s music video features him thumbing through euros rather than dollars
• Other dollar dumpers: hedge funds and reserve currency diversifiers (e.g. Asia, oil exporters)
• This year, Kuwait, Syria dropped dollar peg; Russia revalued; China widened trading band; Vietnam,

Qatar cut or plan to cut,dollar holdings; Iran ended oil transactions in dollars

• Goksel: Whereas the dollar has some advantages over the Euro, a bipolar currency regime dominated

by Euro and US Dollar may emerge in near future