US banking woes portend end of dollar reserve system – Asia Times

NEW YORK – The American banking system is broken. It does not herald more high-profile failures like Credit Suisse. The central banks will keep dying institutions alive.

But the era of dollar-based reserves and floating exchange rates that began on August 15, 1971, when the United States broke the link between the dollar and gold, is coming to an end. The pain will be transferred from the banks to the real economy, which will starve for credit.

And the geopolitical consequences will be enormous. The seizure of dollar credit will accelerate the transition to a multipolar reserve system, benefiting China’s RMB as a competitor to the dollar.

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