Analyst Says βDollar Dominance May Be Coming to an Endβ
A recent opinion piece by Michael Roach, a management consultant and researcher for the independent international policy think tank Lowy Institute, suggests that the dominance of the U.S. dollar may be coming to an end. Roach highlights several key points:
- When Saudi Arabia and Russia signed a military cooperation agreement in 2021, the U.S.’s exclusive role as the protector of the Saudi Kingdom ceased to exist.
- Saudi Arabia’s Finance Minister announced at this year’s World Economic Forum that his country is open to trading in currencies other than the U.S. dollar for the first time in nearly 50 years.
- During the BRICS summit, Russian President Vladimir Putin announced the bloc’s intention to create an international reserve currency, potentially backed by gold.
- Central banks are already stockpiling gold reserves, positioning themselves for a new international system.
- Roach highlights that the rise and fall of empires and reserve currencies are a recurring theme throughout history, suggesting a shift in world order may be imminent.
Roach concludes that as reliance on the U.S. dollar diminishes, central banks will begin dumping their dollar reserves, leading to hyperinflation, higher interest rates, falling asset prices, and further accelerating the decline of the U.S.
Hot Take:
The potential end of dollar dominance and the rise of alternative reserve currencies, such as those proposed by the BRICS nations, could have significant implications for the global economy. It remains to be seen how quickly this shift will occur and what the ultimate consequences will be, but it is clear that changes are on the horizon.
Benito Cormi, the brilliant crypto analyst who has made waves in the world of cryptocurrency. With his razor-sharp analytical skills and deep understanding of the digital asset landscape, Benito has become a trusted figure in the industry and remains at the forefront, tirelessly researching and analyzing market trends to help individuals and businesses make informed decisions in this dynamic landscape.
