Wealth MANAGEMENT WITH JOE WIRBICK

Joe Wirbick is president of the lancaster financial services firm sequinox. he specializes in retirement planning and distribution. he blogs about wealth management at cPBJ. com. here's an excerpt:

There has been a lot of talk in the press and on the news about the future of the U.S. dollar as the world's reserve currency. I personally see no reason for this to be a concern. Allow me to explain.

Just to catch up, since the 1940s, when the world let go of the British pound sterling and embraced the all-mighty dollar, the U.S. has held the position as the world's reserve currency.

As Wikipedia puts it, "A reserve currency (or anchor currency) is a currency that is held in significant quantities by governments and institutions as part of their foreign exchange reserves, and that is com- monly used in international transac- tions."

Having the status of reserve cur- rency gives us many economic ben- efits; however, there has been much talk recently about ending our reign.

I don't see how this could be pos- sible when looking at the state of global economic affairs.

I agree that by issuing so many U.S. dollars we have devalued our currency. According to experts, the dollar is down around 39 percent since 1993. However, all currencies globally have seen dramatic reduc- tions in their values. We are not alone in this.

I also agree that world reserve currencies do change. We started thousands of years ago in Greece, moved to Rome, Persia, Italy, Spanish pieces of eight were popular for a while, the British pound and now greenbacks.

I also can see the concern with the widespread flurry of printing of dollars for the past five years. Investors are worried we are reducing the value of the dollar down to nothing.

I hear all of these fears and valid points, but no one can answer one simple question: Who will replace us?

The most talked-about succes- sor is China's renminbi, the official Chinese currency. I have no idea why China would want that.

Remember, China's economy relies heavily on exports. If the ren- minbi became the reserve currency, that could drive the value skyward. This is something the Chinese govern- ment has avoided for many years in order to keep its exports attractively priced. ...

-Nov. 13

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