Monica Crowley, former Under Secretary for Public Affairs at the U.S. Treasury Department, warned of “catastrophic” consequences if the US dollar loses its status as the world’s reserve currency.” It would mean the end of the U.S. dollar,” she said, predicting that “there would be a complete collapse of the global economic system.”
Crowley warns of “catastrophic” consequences if the U.S. dollar loses its status as the world’s reserve currency
Monica Crowley, former Assistant Secretary of the U.S. Treasury, explained on Fox News Saturday what would happen if emerging economies shifted from the US dollar to the Chinese yuan and the US dollar ceased to be the dominant global currency. She emphasized:
It is difficult to say exactly how catastrophic it would be to abandon the US dollar as the world’s reserve currency.
Crowley explained that since the end of World War II, the dollar has been considered a safe asset. Initially backed by gold, there has been no hard asset to support the dollar for the last 50 years since President Nixon took the U.S. off the gold standard. Instead, he said, it has been supported by the “strength and economic power” of the United States.
The former Treasury official cited “the fact that oil has always been traded in dollars” as another important factor, warning:
If that were to end, it would mean the end of the US dollar.
Emphasizing that it has “really been a privilege” for the U.S. dollar to be the world’s reserve currency, he said: “We have abused that privilege for years through reckless monetary and fiscal policies, and the last couple of years we have really devalued the dollar.
Crowley continued: “On top of that, we have Biden’s weakness, his war on domestic energy production in the US, the perfect storm of the Ukraine war… For all these things, America’s enemies, led by China, are forming a new economic bloc.
The former Assistant Secretary of Public Affairs said, “What we need at this point is…” because this is a pivotal time. Saudi Arabia, which has indicated that it is open to this, to say, ‘You know what, we’re willing to consider other currencies to trade oil,'” he added. And Crowley warned:
If that happens, the world economic system will completely collapse, and the American economic system will definitely collapse. If that happens, we will have soaring inflation like the Weimar Republic. If you think inflation is terrible right now, wait a minute.
“But more importantly,” he noted, “we will lose our economic dominance and our superpower status.
Image credit: Shutterstock, Pixabay, Wiki Commons