What Would the Currency Wars Lead to?: Much Ado about Nothing?

Some argue that a currency war would eventually evolve into a military war, pointing out history has shown that a currency war in conjunction with a trade war ultimately evolves into a military confrontation

Others contend that this whole currency fuss is merely a show for the U.S. November elections.

The USD is on the way to becoming toast. Quite a few countries seem to be fully aware that the USD is weakening, thereby preparing for the ramifications of a weak U.S. dollar. We may see the stronger U.S. dollar for a short period of time as the stock market tanks down the road. Yet the long-term trend is clear as the U.S. Fed prepares to launch a new round of QE.

Perhaps the bottom line regarding this currency matter would be: how long could the USD can maintain the reserve currency status?

The U.S. Fed seems to have effectively monetized the dollar’s reserve currency status so far. That may change if OPEC and other suppliers demand to be paid in a currency basket instead of the USD. The Chinese appears to know that, so they have had some talks with several countries to make oil traded in something other than the USD. Then that would be a sea change.