Subject:
reserve currency A reserve currency, or anchor currency, is a currency which is held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, such as oil, gold, etc.
This permits the issuing country to purchase the commodities at a marginally lower rate than other nations, which must exchange their currency with each purchase and pay a transaction cost. For major currencies, this transaction cost is negligible with respect to the price of the commodity. It also permits the government issuing the currency to borrow money at a better rate, as there will always be a larger market for that currency than others. (Wikipedia Feb 2010)
Euros versus the dollar
By John Schroy, on July 2nd, 2010 | 
The multiplicity of independent central banks is the Achilles heel of the eurosystem. A bank, controlled by the government, in a fiat money environment, that acts as the paying agent for that government, has — in effect — the capability to print money (although not necessarily banknotes).
Imagine, tomorrow the headlines in the Wall Street Journal read “$100 billion is inflationary euros issued without the knowledge of the European Central Bank”. What would be the effect of the news on the value of the euro as a reserve currency?
International finance
By John Schroy, on May 23rd, 2009 | 
Who determines the ‘world reserve currency’? Central bankers? IMF officials? College professors?
The answer is ‘none of the above’. In an open, global economy, the world reserve currency is determined by the judgment of millions of importers and exporters in many countries.
The world reserve currency is decided by consensus and the personal decisions of exporters as to what currency they will accept for their goods.
On this basis, it’s too early to count the dollar out.
Good and bad banks
By John Schroy, on May 8th, 2009 | 
In May 2009, the Obama administration divided some of America’s largest banks into ‘good banks’ and ‘bad banks’.
This broke a long-standing practice of protecting the reputation of the US banking system. The Obama government seized TARP funds as an instrument of political power.
Banks, large and small, are now eager to escape the trap of taking TARP funds, which will require them to raise $74.6 billion, either by selling equities on the market, or from profits.
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