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Will the Dollar Lose Global Reserve Status – Epi-3277

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The U.S. dollar is currently the dominant global reserve currency, meaning that it is held by central banks and other financial institutions around the world as a store of value and a medium of exchange. If the dollar were to lose its status as the global reserve currency, several significant consequences could occur:

  1. Decreased demand for U.S. assets: As central banks and other financial institutions reduce their holdings of U.S. dollars, demand for U.S. assets, such as Treasury bonds and equities, would decline. This could lead to lower prices for these assets and higher borrowing costs for the U.S. government and American corporations.
  2. Increased inflation: The loss of the dollar’s reserve currency status could lead to higher inflation in the United States, as the value of the dollar falls and the prices of imports rise. This could also lead to reduced purchasing power for Americans, as the cost of imported goods and services would increase.
  3. Weakening of U.S. geopolitical power: The dominance of the U.S. dollar as the global reserve currency has given the United States significant geopolitical power, as other countries rely on the U.S. for access to financial markets. If the dollar were to lose its reserve currency status, the U.S. may find it more difficult to project its power and influence globally.
  4. Increased volatility in global financial markets: The U.S. dollar’s status as the global reserve currency has contributed to stability in global financial markets. If the dollar were to lose this status, there could be increased volatility and uncertainty in global financial markets, as other currencies and assets compete to fill the void left by the dollar.

 

The loss of the U.S. dollar’s status as the global reserve currency would have significant economic and geopolitical consequences, not only for the United States but also for the global economy as a whole.  It is something people don’t think can happen, but every reserve currency that ever has existed, has eventually failed.  Today we examine what it might really look like if it happened and how it actually could.

Join Us Today to Discuss…

  • What is the BRICS alliance and what does it have to do with all of this
    • The stated goals of the BRICS alliance
      • Promoting Economic Growth and Development
      • Enhancing Geopolitical Influence
      • Addressing Common Challenges
      • Strengthening Cooperation and Partnerships
  • What does the media say would happen if we lost reserve status – link
  • China’s peace deal with Saudi Arabia and Iran is bigger news than you think – link
  • What really happens if the US Dollar Loses Reserve Status
    • Decreased Demand for US Assets (dollar/bond dumping)
    • Increased Inflation (crippling)
    • Weakened US Geopolitical Power (reduced soft power)
    • More volatility in global markets (real price discovery)
  • Is this likely, well it is eventually inevitable but when is the real question
    • What prevents it for now
      • A lot of nations benefit from it
      • Our military despite being woke is still incredibly powerful
      • The system is highly entrenched
  • The era is ending but there is no way to know what the “end” really looks like yet

 

Resources for today’s show…

 

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