Rethinking the Global Money Supply

More talk about ditching the US Dollar as the reserve currency in this article.  What do you think will happen to the exchange rate of the US Dollar if all those countries who use the US Dollar as a reserve start selling those dollars?

The U.S. response to the Chinese proposal was revealing. Treasury Secretary Timothy Geithner initially described himself as open to exploring the idea; his candor quickly caused the dollar to weaken in value—which it needs to do for the good of the U.S. economy. That weakening, however, led Geithner to reverse himself within minutes by underscoring that the U.S. dollar would remain the world’s reserve currency for the foreseeable future.

Does the US Dollar need to weaken?  Higher oil prices, higher food prices, and higher car prices are what we need?  Is the problem with General Motors and Chrysler the strong US Dollar?  The dollar has been weakening for years.  I went to Europe in 2002, and a Euro cost about $0.88 – It cost about $1.60 just prior to the market crash of 2008, where a rush to the perceived safety of the US Dollar caused it to strengthen.  That means that a $30,000 Chevrolet Tahoe cost 34,091 euro in 2002, and 18,750 euro in 2008.

It should be the job of the US Government and the Fed to protect the US Dollar – not weaken it.  By the way, “overly expansionary monetary policies” is another way of saying “Printing too much money”