Since the beginning of this year, there has been a flurry of news and editorials discussing the trend away from the dollar amid a flurry of disclosure related to the BRICS bloc. In a recent article, American political scientist and author Ian Bremmer argued that claims of the death of the U.S. dollar are overstated. In addition to Bremer’s comments, economist Paul Krugman, in a recent op-ed, argued that the greenback is not going away anytime soon, calling some speculators “‘Weimarists’ who constantly predict hyperinflation.”
Political scientist Ian Bremmer claims that the dollar death theory is exaggerated
The theme of de-dollarization in 2023 is a hot topic. This is because several market participants suspect that the U.S. dollar may collapse in the near future. Much of the conversation and debate revolves around the BRICS nations (Brazil, Russia, India, China, and South Africa) and the alliances formed by these countries. With the help of members of the Organization of Petroleum Exporting Countries (OPEC), several decisions have been made to ditch the dollar in gas and oil settlements.
In addition, worldwide, Google Trends datashows that during the week of April 2 to April 8, 2023, the term “de-dollarization” reached a maximum score of 100 points in search interest, according to Google Trends data. theme began to gain momentum in the last week of March 2023. Prior to that, interest increased at the end of January 2023, but not as high as the week of April 2-8, as recorded in the Google Trends 12-month index. Despite the increased interest, the Internet has been flooded with articles discussing the theoretical doom of the U.S. dollar and its ouster from its position as the world’s dominant reserve currency.
In one such article, Ian Bremmer, founder of the Eurasia Group and a writer known for his knowledge of global political risks, offers adifferent perspectiveon the supposed collapse of dollar dominance. Bremer discusses eight different articles, acknowledging the trend of de-dollarization headlines. The author states that these articles “have provided fertile ground for gold bugs, crypto shills, hyperinflationary truthers, techno-liberals, anti-imperialists, and commonplace con artists to stoke fears about the imminent death of the dollar and its supposedly catastrophic consequences for the US and global economy.”
Bremmer indicatesFederal Reserve’s data on U.S. dollar usageand argues that “rumors of dollar death are greatly exaggerated.” It also asserts that by most measures, the greenback is “arguably dominant in world trade and finance.” The Eurasia Group founder stresses that the U.S. dollar has several “desirable characteristics,” including providing stability while providing “liquidity, security, and convertibility.” Who would trust the currency of a country that appears to have lost its political sanity?” Krugman asks in his NYT op-ed. If that were to happen, the threat to the dollar’s reserve currency status would be the least of our problems.”
What do you think will happen to the U.S. dollar as the world’s reserve currency and how will the trend toward de-dollarization affect the global economy? Share your thoughts on this topic in the comments section below.
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