An article suggests that since the U.S. military was able to kill Bin Laden, the U.S. dollar will remain the only world reserve currency. I find this logic very questionable.

With the death of Osama bin Laden, U.S. forces ended a nearly 10-year worldwide hunt for the mastermind of the Sept. 11 attacks and boosted the U.S. dollar's reserve currency status, too, trader Steve Cortes said Wednesday.

"History shows us that the country with the strongest military is always the reserve currency," said Cortes, founder of Veracruz. "I think the ability of those heroes, of SEAL Team 6, to project power globally shows us that U.S. military is uncontested in its dominance and I think the currency will re-assert accordingly."

While we should always look at and learn from history, we should never use history as a statistical argument for complacency. There is a common expression in investing: "Past performance is not indicative of future results."

As incredibly capable as our military is, its power cannot overcome the laws of economics any more than it can overcome the laws of physics. And we cannot continue to devalue the dollar by printing money and expect a surgical operation against a terrorist in Pakistan to convince the world to hold on to losing investments.

Even if the assertion above is true (that the country with the strongest military is always the reserve currency), it's not like anyone doubted we had the strongest military. The operation against Bin Laden was certainly a credit to our military but no-one doubted that we had this power... and yet the dollar has been losing ground.

The other big problem is that China has ultimate leverage as to whether we have the world's reserve currency and the most powerful military. If the Chinese choose, they can destroy our country without firing a single bullet. All they have to do is dump their dollar reserves on the market and our currency will collapse... and, with it, our ability to finance everything our government does--including the military. Yes, China would lose a lot of money in the process. But it's entirely possible they could look at that as the cost of accomplishing their political goals.

The article does continue with a reasonable comment:

"Wave the flag and buy the U.S. dollar," Cortes said, adding he thinks the dollar will soon hit its base with the end to the U.S. Federal Reserve's bond-buying program, commonly referred to as quantitative easing or QE. "It's very lonely to be a dollar bull right now, but I think it makes sense."

This certainly makes sense. Unless something else hits the fan, it's completely logical to believe that the dollar will stop losing ground when the Federal Reserve stops printing money. And if the Federal Reserve truly stops printing money, most of the long-term economic pessimism I've been expressing in my articles thankfully becomes obsolete.

Unfortunately, I continue to believe that there will eventually be a QE3, or resumed money-printing under some other name. If we continue to print money, our military will not be able to save us from the economic consequences.

If we are able to resolve our economic situation and maintain the dollar as the world reserve currency, it will because we got serious about our fiscal situation. Not because we killed Bin Laden.