Jim Rickards, economist and author of “Currency Wars,” says the biggest threat to the US dollar’s reserve currency status is actually the US Treasury. However, he notes that the growing number of countries seeking alternative settlement currencies to the dollar is also “a big problem,” and emphasizes that “the dollar is under attack from all sides.”
Jim Rickards, on the U.S. dollar losing its reserve currency status
Jim Rickards, economist and author of “Currency Wars,” warned that the biggest threat to the U.S. dollar is the Treasury, despite increasing efforts by China and other countries to reduce their dependence on the dollar. He emphasized on “Fox&Friends Weekend” Saturday:
The biggest enemy of the dollar as a reserve currency is not all other countries. It is the U.S. Treasury.
Rickard explained the difference between a settlement currency and a reserve currency. He noted that many countries are moving away from using the U.S. dollar for payments, but that the “greater threat” to the U.S. dollar is its potential substitution as a reserve currency. He detailed that:
the U.S. Treasury weaponized the dollar and froze the foreign exchange reserves of the Russian central bank. If they don’t like one of my policies, are they going to freeze my foreign reserves?
“If you want to get away from the dollar as a reserve currency, the only really good option is gold,” the economist opined.
Regarding the efforts of China and several other countries to challenge the USD as a settlement currency, Rickard says:
It’s a big deal. The dollar is under attack from all sides. People are looking for alternative settlement currencies.
More and more countries are trying to reduce their dependence on the dollar, including China, Russia, India, Malaysia, and Saudi Arabia. Recently, China and Brazil agreed to replace the U.S. dollar with their own currencies in trade transactions. Additionally, ASEAN countries have agreed to reduce their reliance on the U.S. dollar in trade settlements, and the BRICS countries are reportedly working to create a new currency.
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