This year, there has been a flurry of news reports and opinion editorials discussing an alleged trend of dollar depreciation amid a flurry of BRICS-related disclosures. In a recent article, American political scientist and author Ian Bremer insists that claims about the dying US dollar are exaggerated. In addition to Bremer’s comments, economist Paul Krugman also asserted in a recent opinion piece that the greenback isn’t going away anytime soon and called some speculators “Weimarians, the people who always predict hyperinflation.”
Political scientist Ian Bremmer insists that the speculation of Doom Dollars is greatly exaggerated
De-dollarization has been a topical discussion in 2023, with many market observers skeptical that the US dollar could collapse in the near future. Many conversations and discussions revolve around the BRICS countries (Brazil, Russia, India, China and South Africa) and the alliances that these countries have established. Several decisions were taken with the help of members of the Organization of the Petroleum Exporting Countries (OPEC) to abandon the dollar in oil and gas settlements.
Moreover, all over the world Google Trends data Shows that the term “de-dollarization” reached the top 100 in terms of search interest during the week of April 2 to April 8, 2023. Google Trends data indicates that the topic started to gain traction during the last week of March ) 2023. Prior to that, the rate increased through the end of January 2023, but not as high as Google Trends’ 12-month hike in the week of April 2-8. Despite the increased interest, the internet has been flooded with stories discussing the theoretical demise of the US dollar and its removal from the throne of the world’s dominant reserve currency.
Amid these stories, Ian Bremmer, founder of the Eurasia Group and author known for his knowledge of global political risks, gave a presentation. different perspective On the alleged collapse of dollar hegemony. Bremer acknowledges the trend of de-dollarization by highlighting eight different articles. The author states that these stories have “provided a breeding ground for gold bugs, cryptocurrency cripples, hyperinflationary journalists, techno-liberals, anti-imperialists, and regular pranksters to stir fear about the imminent death of the dollar and its presumed disastrous consequences for the United States and the global economy.”
Bremer appears US dollar usage data from the Federal Reserve and insists that “rumors of the death of the dollar are greatly exaggerated.” He also asserts that, by most measures, the dollar “remains unquestionably dominant in global trade and finance.” The founder of Eurasia Group asserts that the US dollar possesses many “desirable features,” such as providing stability while also being “liquid, safe, and convertible.” However, Bremer concedes that the dollar’s dominance could one day wane, as other dominant currencies have done in the past. The author says:
None of this means that the dollar’s advantage cannot slip, of course. After all, every reserve currency that came before the dollar was dominant until the moment it ceased to exist.
Economist Paul Krugman Claims US Dollar Role ‘Looks Too Safe’
The founder of Eurasia Group is not alone in feeling that the dollar will not lose its hegemony any time soon. Economist Paul Krugman also published a bulletin editorial On the topic of de-dollarization in The New York Times. Krugman targets gold bug Peter Schiff and “Rich Dad, Poor Dad” author Robert Kiyosaki. Some of these individuals, the opinion piece says, are “Weimarians,” insisting they were expecting Inflation is similar to the Weimar Republic in the United States of America. Krugman insists that the US dollar’s dominance is not really in danger, and that “the dollar’s role appears largely safe.”
“The dollar has three great advantages,” said the Nobel laureate. “The first is incumbent: Since everyone is already using dollars, it would take exceptional circumstances to get them to switch. The second is that US financial markets are open: unlike China, we don’t place controls on people trying to move money in or out of the country.” Krugman added: The third is the rule of law.
In concluding his subscriber-only newsletter, Krugman said there was “one major caveat.” He believes there is a possibility that the US could default on the debt because the Republican-controlled House of Representatives refuses to raise the debt ceiling. On the political spectrum, Krugman is a Left democrat and he Classified “Most Liberal” by allsides.com. “Who will trust the currency of a country that seems to have lost its political mind?” asks Krugman in his New York Times article. “If that happens, the threat to the dollar’s reserve currency status will be the least of our problems.”
In your opinion, what does the future hold for the US dollar as the world’s dominant reserve currency, and how might the trend of de-dollarization affect the global economy? Share your thoughts on this topic in the comments section below.
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