I define the reserve currency as being collateralized with oil which in turn is facilitated with military projection via the process of Empire.
We are in an unraveling process which challenges the "reserve currency" which currently runs on actual use of force and on reputation as evidenced by large trade and current account imbalances as well as the use of force.
This weakness has encouraged growing instability in places such as Pakistan, Yemen Bahrain, Syria, Libya, Saudi Arabia, South Ossetia, Georgia, and North Korea. We have emerging would-be mini-empires of China, Russia, and Turkey/Iran willing to contend on the great landmass. In a way we have fully depreciated our Empire which naturally under-costs energy cost including that of oil and nuclear. I talk also about Japan as an illustration that energy has been mis-cost. There is no proper accounting in human life which allows people to have selectively high standards of living in an untenable context.
Loss of life used to be reserved for the people on the edge of empire, but this is shifting towards the middle where people in Europe, Japan, and the US becoming more vulnerable to the loss of life support. In the US we are in denial with most people totally unaware of total costing let alone the idea that we project military force worldwide.
Those at the top of the US system are trying to keep the status quo in place with last ditch efforts including the patriot act, pervasive propaganda, fascism, and the gutting of the constitution. I would describe the US in winter where we fail to acknowledge degradation in standards and prospects. Arab Spring more accurately describes people who have realized that they are losers in terms of sourcing life-support, it has nothing to do with democracy movements...........
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