Volcker fears for the future of America

Paul Volcker, who chaired the Fed through most of the 1980s, thinks the dollar is in trouble:

Former Federal Reserve Chairman Paul Volcker, who is chairman of President Barack Obama’s Economic Recovery Advisory Board, said the U.S. dollar is in danger of losing its role as a global benchmark currency.

“The growing question is whether the exceptional role of the dollar can be maintained,” Volcker told a gathering of New York civic leaders at the University Club of New York last night.

The decline of the U.S. economy, political gridlock at home, U.S. involvement in two wars and “festering” geopolitical issues in the Middle East and Asia have undermined the ability of the U.S. to influence global events, Volcker said.

From Bloomberg (h/t Eric Janszen in this iTulip thread). Not surprisingly, Volcker takes it for granted that this will be a bad thing. But perhaps most interesting is this:

Volcker offered no prescriptive solutions as he spoke in broad terms of the country’s loss of stature.

When a guy who's supposed to be in charge of America's economic recovery admits that he has no clue what to do about it, it certainly does look like that country is in trouble.