Robert Kiyosaki and his "team" of advisors were in Singapore recently to conduct a 2-day seminar. During the seminar, Robert Kiyosaki warned that US$ might go down to zero...

Actually, I disagree with his view. He forgot something. The US$ is currently the World Reserve Currency. Most countries have alot of their foreign reserves in US$. Secondly, U.S. is the world's largest Debtor nation (owes the most money).

Imagine if you lend money to someone and this guy goes to zero, what will happen to you? You will also go down the drain with him. That is the situation the whole world is facing right now.

If U.S. goes down, so would the World. Thus, it is actually in the interest of NOT just U.S. but the whole world to ensure that even if U.S. dollar will lose its dominant position in the Global economy, this is likely to be done over a period of say 30 to 40 years, not 3 to 4 years.

This is NOTHING new. Before World War II, UK's British Sterling Pounds was the world's dominant currency. Even though UK loses it dominant position to U.S. after World War II, (1944).

After more than 60 years, Sterling Pounds, though a weaker currency, is still a very stable currency, even though it has lost its dominant position in the world.

Thus, this is also a possible scenario for the future of U.S. and US$.

People such as Robert Kiyosaki paints a picture of Global Catastrophe. The thing is do you honestly think that the Whole World and all the governments of different countries will stand by and do nothing to see the collapse of U.S. and the whole world?

I think it is very unlikely. Robert Kiyosaki has a different view though. What is your own view?

Having Financial Literacy is the ability to think for yourself, not to listen to other people, whether Robert Kiyosaki or Dennis Ng blindly. Do not treat every word they say as the Truth, learn to analyse what they say and ask if it makes sense or not.

Below is a recent statement by China to reaffirm that China backs US dollar as reserve currency.

Cheers!

Dennis Ng, http://www.MasterYourFinance.com

Financial Times: US dollar backed as reserve currency

“A leading Chinese financial official on Monday rejected suggestions the US dollar could be replaced quickly as the global reserve currency, as US Treasury secretary Tim Geithner arrived in China on his first official visit.

“‘In the short term I don’t think we can find another currency to replace the US dollar,’ said Guo Shuqing, chairman of China Construction Bank and former head of the country’s foreign exchange administrator. ‘The US dollar is the main currency because their economy is number one in terms of competitiveness, in terms of innovation.’

“Speaking in an interview with the Financial Times, Mr Guo also raised doubts about a proposal from China’s central bank governor, Zhou Xiaochuan, to replace the dollar with a ’super-sovereign reserve currency’ based on special drawing rights issued by the International Monetary Fund.

“‘We’ve had SDRs for many years but everybody knows they don’t work so well,’ said Mr Guo. ‘People worry about US dollars very much because of the imbalances in the current account but that has been the case for many years - they have had a deficit in the current account since the very beginning of the 1970s.’

“The bulk of China’s total international investment position is held in US dollar assets and only 6% is in the form of direct investment.

“Fears that US moves to tackle the recession could undermine the value of the dollar have led to calls from senior Chinese officials, including Mr Zhou, for more conservative fiscal policy and suggestions that the dollar be replaced as the world’s reserve currency.”

Source: Lionel Barber, Martin Wolf, Jamil Anderlini and Kathrin Hille, Financial Times, June 1, 2009.