The one hundred US dollar bill, fondly known as the 'Benjamin,' remains universally accepted legal tender. More and more, the reason for such widespread acceptance relies more upon quantity – the number of Benjamin notes floating around – and not quality. (Of late, the US dollar has been a poor store of value against most currencies.)
At one time, any self respecting international gangster cherished the feel of large wads of one hundred dollar bills. No more.
The Chinese triad likely prefers the Yuan. Maybe even the Singapore dollar, exchange controls permitting. The Japanese Yakuza's loyalty stays with the Emperor and his Yen. Russian and East European organized crime syndicates probably prefer doing business in the Euro.
All is not yet lost for the US dollar. The Latin American drug kingpin and Mexican human trafficker still revel in Benjamin's glow. Moreover, gangsters in many Asian and African countries still yearn for the US dollar.
Organized crime syndicates may not be the only people shunning US dollars. Central bankers are also diversifying their reserves into other currencies.
The global move away from the US dollar is confirmed by the percentage of international reserves held in US dollars by central banks. The US dollar's share of reserves has been in steady decline for many years.
Thus, rating agency Standard and Poor's recent announcement placing the US credit rating on negative watch should not come as a surprise to many. Statistically, being added to the negative watch list implies that the odds of a US debt rating downgrade within the next three years are 33 percent.
Two major wars and an 'out of control' financial sector have taken a toll on the US economy. Not even the world's sole superpower can afford overseas military deployments measured in decades.
International military adventurism costs money.
Unfortunately for the US, China (as America's lead banker) seems to have run out of patience with the world's biggest debtor nation. China is no longer willing to write blank checks. Consequently, China is cutting back on its ongoing US Treasury bill purchases.
Fortunately for the US, there are few credible alternatives to the US dollar.
Nevertheless, China is trying hard to elicit other options. The country is buying 'real' assets in any country such assets are available. Even gold and other precious metals have regained respectability among central bankers.
Importantly, the People's Bank of China is making slow but steady progress in 'internationalizing' the Yuan; moving towards one elegant solution to China's foreign exchange reserves dilemma: gaining seigniorage for the Renminbi.
The United States is still the world's sole superpower. America's operating flexibilities, soft and hard power, are superior to any other nation in the world. That is a fact.
Nonetheless, America's role as the exclusive lead actor on the international stage is nearing its final act. The country's unwillingness (or is it inability?) to decisively affect events in Libya is clear evidence of America's declining global influence.
Some years ago, America's politicians would not have shied away from another overseas military engagement, especially if the conflict could be couched in the rhetoric surrounding the global war on terror. In 2011, there is little appetite to expand America's 'greatness and idealism.'
American financial, military and psychological energies have been sapped by internal problems. Surely, all nations have the ability to revitalize themselves over time. The US is no exception. None should write off the US as a global power.
Nevertheless, there is a transformation of roles occurring on the world's stage. Soon, the US will not be eligible for 'Best Lead Actor' nominations, but merely for the 'Best Supporting Actor.' The 'Lead Actor' position must be shared with an ancient civilization comprised of young dragons.
Over time, the US must learn to share the global spotlight.