Can commodities serve as a reserve currency?

"It's a fad, a brief investment fancy. And there's nothing wrong with investing in one of them, so long as you remember that commodities are not units of account, nor mediums of exchange," Langan said. "Oil and commodities can store value, like a currency, but they can also lose value much faster than many hard currencies, and certainly faster than the U.S. dollar."

What's driving the current commodities-displacing-the-dollar notion? "It's the U.S.'s current down period," Langan said. "The potential U.S. recession, credit slump, and budget and trade deficits that have led to the dollar's decline against other major currencies. Add a dose of higher inflation, and you can see why people are talking up 'commodities as the new reserve currency.' But it is irrational, long-term."

For the U.S., solutions ahead

Irrational, long-term, Langan argued, because the United States will solve its problems. True, a presidential election is ahead -- one where candidates from the two major parties are likely to offer distinctly different programs to address the nation's aforementioned concerns, but Langan says if history is any precedent, the problems will be addressed.

"Right now, pessimism is in season, but that too, is cyclical," Langan said. "The commodity hawks are way too pessimistic. What they're overlooking is the United States' resiliency, its capacity to solve its problems."

Langan's solutions include: 1) a tax increase and a modest reduction in federal spending growth to eliminate the federal budget deficit (or at least get the receipt/expenditure lines moving in the right direction, 2) a new engine of growth for the U.S. economy, such as combination of domestic infrastructure work and green-collar alternative energy jobs, 3) public policies that encourage citizens, particularly low/lower-middle income adults, to save more, to increase the nation's saving rate, 4) a bipartisan solution to provide universal health insurance, one that lowers overall health care costs, and 5) technological innovation that increases U.S. GDP growth, worker productivity, and makes the U.S. a more attractive place for capital.

The above would go along way toward restoring sustainable growth to the U.S. economy, and also increase the dollar's value vis-à-vis the world's other major currencies. To be sure, Langan recognizes that the above are not likely to be achieved within the new president's first term.

"But many will be, in my interpretation, and those solutions will get the economy moving in the proper direction again," Langan said. "And that should put to rest any notions of commodities as a reserve currency."