We are at a turning point for the US dollar, Jeffrey Tucker says, noting a growing trend towards de-dollarization. “The dollar will not be king,” he warned, adding that history will record recent events as “a turning point for the dollar.”
Jeffrey Tucker on de-dollarization, the turning point of the US dollar
Jeffrey Tucker, an author and publisher who has worked with former US actor Ron Paul and the Mises Institute for many years, shared his view on the growing trend of dollarization and its effects on the US economy in an interview with NTD News on Wednesday.
In response to a question about whether de-dollarization is really happening and when will we feel its effects, he explained that the United States has controlled the global currency market since 1944, enabling it to influence policies around the world. But referring to the attack and the sanctions imposed by the US government on Russia following the outbreak of the Russian-Ukrainian war, he said:
History will record that this was the turning point for the dollar. Since 1944, the dollar was dominant even after the end of the gold standard in 1971… That really changed with the attack on Russia and the sanctions because a lot of those assets that the US arbitrarily seized were denominated, of course, in dollars.
“If the United States puts its political power behind other people’s desire to hold their currency and attacks them and attacks them and criticizes their own policies and actually confiscates assets, it discourages people from holding dollars. So suddenly we have a situation where all these very powerful and important countries are saying, ‘We need to Do something about this. Let’s get rid of the dollar. We have to move on to something else. They can do that and that’s starting to happen.”
And noting that the BRICS countries (Brazil, Russia, India, China and South Africa) have begun to “marginalize” the US dollar, he stressed that this will affect the US debt situation which can really constrain the Fed.
Inflation ‘fixed’
On how de-dollarization will affect Americans in terms of a potential recession, Tucker explained: “The effect at the local level will not be as pronounced as people think. The biggest thing we have to worry about domestically is de-dollarization domestically, namely inflation.”
He stressed that inflation is “holding,” adding: “It’s with us. It’s not going anywhere. The Fed hasn’t been able to reverse that.” He further noted that the dollar has lost 15 cents of its value over the past two and a half years. “This is inflation,” he said, stressing that it is “a direct result of Fed mismanagement.”
Tucker warned, “De-dollarization will affect us as we travel internationally. Right now, the dollar is basically gold wherever you travel in the United States…and that will certainly come to an end.” Moreover, he said that it would also “seriously harm international businesses that are based in the United States.”
The dollar will not be king. It’s not going to happen tomorrow or next year or even the next five years, but looking at the long-term trajectory, I think we’re at a tipping point.
Do you agree with Jeffrey Tucker about de-dollarization? Let us know in the comments section below.
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