Can US Continue to Dominate Global Financial System? … (Death of the Dollar–15) with Video

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The US dollar’s status as the reserve currency and as a safe haven will end.

The Bottom Line –
Can US dominate global financial system forever?

( Discussion of the US dollar begins @ 8:30 mark)

– Flash Points –

1 – With the relatively robust US economy, the US$ remains strong.
2 – It will remain strong, owing primarily to its “exorbitant privilege.”
3 – Any bankruptcy process begins slowly, but ends suddenly.
4 – The entire global financial system is fragile.
5 – Fear is replacing trust.

– Synopsis –

On a recent episode of The Bottom Line, Steve Clemons hosted a panel discussion on whether or not the US can continue to dominate the global financial system. They also touched on the question of US dollar hegemony.

Their pertinent thoughts on the latter subject are as follows:

Edward Luce  

“The dollar is the tallest dwarf.” 

“It’s not the wolf at the door. It’s the termites in the foundation.” 

“How did you go bankrupt? Gradually, then suddenly.”  

“Any number of black swan events could cause this foundation to collapse. … The dollar is the least bad option.”    (Image source)

Sandra Navidi  

“The dollar will remain strong only because it’s the best house in the neighborhood.”  

“The exorbitant privilege, the fact that the US can print dollars, is also still considered a safe haven.”

“The whole system has become more fragile.”   (Image source)

Douglas Rediker  

“The dollar continues to appreciate,”  owing to the relative strength of the US economy. 

“The dollar has been stronger than the president would like. … It will continue to be resilient.”

– For “the rest of the world, there is no alternative”  to holding the dollar.  

– Eventually, an alternative to the dollar will arise, but “eventually is a long time.”    (Image source)

Steve Clemons  

“Fear is replacing trust in the world.”   

– That will probably result in “a less mighty dollar.”   (Image source)

– Insight from Outside –

The panel tries to put a positive spin on the status of the US and its dollar. But they are pretty much unanimous in their pessimistic outlook.    

They understand that US hegemony will end … albeit eventually. They also realize that the US dollar’s status as the reserve currency and as a safe haven will also end. 

No Alternatives … Except Gold, Silver, and Bitcoin 

The panel members assert that the US dollar is “the least bad option”  and “the only alternative.”

That may be true in terms of national currencies, but those are not the only choices. We have the option of holding gold or silver, the most resilient money for the past 3,000 years. Moreover, we now have cryptocurrencies such as Bitcoin, the most rapidly appreciating money for the past 10 years.    (Image source)

The only reason that other countries hold the US dollar is because they have to. The only reason they tolerate it is because they have no other choice. Not yet. anyway.

However, that will change – eventually or maybe soon.   

The question remains of how the US will go bankrupt, and the answer comes from Ernest Hemingway (as quoted by Edward Luce). The US is now going bankrupt gradually. Eventually, it will go bankrupt “suddenly.”

Posted via Steemleo



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7 comments
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The USD has bee abused for years and cannot sustain all the debt that its keeps on absorbing through all this infinite money printing and borrowing from the future. Its funny money now, the fact that its held out this long is impressive in itself it won't be a case of how, its a case of when

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Hi @majes.tytyty,

The only reason that other countries hold the US dollar is because they have to.

This is true. Currently, my country is using the dollar more as a currency of use than the country's own currency, the sovereign bolivar (Bs). Businesses, markets, street vendors, even fast food vendors will accept your dollar as a means of monetary exchange.

To see an expression like Death of the Dollar, is something that I don't think will happen in the next 25 or 50 years, to give a date. Maybe 100 years?

Seeing a $1 bill or a $5 bill or a $20 bill was hard to see about 10 years ago (maybe less). It was even illegal to use that currency. And now it's in the wallets and pockets of many Venezuelans.

Even doctors' offices charge you in dollars. So I don't think it' s gonna be that easy for this one to die. As long as there are countries that depend on that currency, it will keep on living. That's my opinion. I'm not an expert in finance or economics. But I remember the first time I was called crazy for making a dollar budget three years ago here in Venezuela. Now everyone here does that.

Obviously Bitcoin is giving us a hand with the economic situation and hopefully will continue to do so. However, it is still not as accepted or understood as a dollar bill, which you can touch, use and exchange.

Thanks for sharing and keeping us updated :)

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Thanks for your detailed reply. Of course, it will take many and major changes before the dollar dies, but it can't survive for long.

In fact, the posts in this series of mine are all based on and all refer to the insights and opinions of various experts in the field. I simply summarize and compile all their ideas.

And what they say, resoundingly, is that the dollar is doomed. Of course, it's used around the world as the "petro-dollar," and it's the major currency in not only the US, but also Panama, Cambodia, and, as you say, now Venezuela.

But the fact that it's used there does not in any way mean that it will last longer. It might be 10–20 years before it loses much of its value, but the trend is clear.

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It's amazing what could happen to a nation as strong as the US. But I guess they're not exempt from suffering the same thing as the boiled toad. I don't know if you've ever heard that story, but the problem is that obviously a toad would never bathe in a boiling pot. But if you put it in a pot of room temperature water and start raising the temperature, it won't realize it's being cooked until it's too late.

Stay blessed :)

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Ya, I've heard that tale several times.

Anyway, the USA is a giant toad, getting very very warm in that pot on the stove.

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Are you from US? You've better save your capital in crypto ;D (maybe STO?)

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