The DXY Index of the US dollar has a weighting against other currencies that made sense in the 1980s.
It is heavily weighted to the Euro, the Yen, the Loonie, and the Pound.
The Euro replaced the Deutsche Mark, but has recently lost some of its global significance.A more useful index based on the current global realities of a new multi-polar world would be more appropriate.
Any new index must include a transnational standard of value such as gold.
"There can be no other criterion, no other standard than gold. Yes, gold which never changes, which can be shaped into ingots, bars, coins, which has no nationality and which is eternally and universally accepted as the unalterable fiduciary value, par excellence."
Charles De Gaulle, President of France, February 4, 1965
"I have always argued that the gold standard of the 19th century was a very effective stabilizer. It kept inflation essentially at zero, and I felt it was critical for the tremendous growth that occurred for the American economy in the latter part of the 19th century. When we went off the gold standard essentially in 1933, we then had to have what we call "fiat money" which is essentially money that is — it's printed paper money. Which unless we restrict the volume of, can be highly inflationary. The type of interest rate regulation that I and indeed most central banks in the last 20 years have been involved in has been to try to replicate the laws and rules that were governing the gold standard."
Alan Greenspan, Chairman Federal Reserve, September 18, 2007
"Gold is unique among assets, in that it is not issued by any government or central bank, which means that its value is not influenced by political decisions or the solvency of one institution or another."
Salvatore Rossi, Chairman Central Bank of Italy, 30 Sept 2013
Why did gold 'fall out of favor amongst the world's central banks in the 1980s and 1990s? Because gold was an unpalatable restraint on the rise of the United States in its quest for unipolar global hegemony. It has had to engage in continuing acts of interference and aggression to sustain this strategic leverage, the Petrodollar, and its predatory financial system. It has even subordinated a large part of its own domestic economy to the concentration of wealth.
That period in history seems to be coming to an end as oil's role as the primary source of energy begins to diminish. The powerful will resist this stubbornly, and attempt to control the remaining supply of oil while impeding the rise of alternatives.
It is merely prolonging the inevitable. Looting by the power elite ensues. It is still not too late to restore the balance in the system, but the opportunity for endogenous reform is growing short.
The writing is on the wall.
