Financial analyst Charles Nenner, head of market timing at Goldman Sachs for over a decade, warns of the end of dollar hegemony and its impact on the US. According to Nenner, the influence of the BRICS bloc and Saudi Arabia could end the dollar’s role as a reserve currency and trigger a flight to safety.
Charles Nenner predicts the end of U.S. dollar hegemony
The U.S. dollar will weaken as a reserve currency. This is the future vision predicted by financial cycle analyst Charles Nenner. Nenner, who previously predicted that the dollar would survive, has recently changed his opinion, stating that the decline of the U.S. dollar has already begun.
In a recent interview with USA Watchdog, Nenner said:
I said the dollar is going to hold up, but it’s gone, it’s gone. We are really in trouble. There is actually no reason to be in the dollar.
Financial analysts predict that the recent breakthrough of the BRICS bloc, consisting of Brazil, Russia, India, China, and South Africa, with the help of Saudi Arabia, will play a special role in the process of disrupting the hegemony of the dollar as the world’s reserve currency.
Nenner believes that mid-cycle, the economy could recover due to the dollar’s depreciation in favor of exports. He explains:
The economy will get really bad. If the dollar gets really low, it might give a small boost to the economy because it’s favorable for exports. That’s just a bounce that fools people. It will only end in the long run.
Unintended Consequences
Nenner explains that a falling dollar will have a series of consequences for the U.S., first other countries will run to dispose of their U.S. debt and secure other assets such as silver and gold.
We will have a bad dollar. That usually means people will dump securities. If China or Russia dumps U.S. Treasuries, we will have a problem. I am getting very concerned because there could be a flight to safety.
China is one of the largestholdersof U.S. Treasuries, with $867 billion in holdings, accounting for just over 10% of the total share of U.S. debt, second only to Japan.
Other analysts have recently predicted the demise of the U.S. dollar. Jeffrey Tucker recently stated that the US dollar has reached a tipping point and will no longer be the currency of kings. Similarly, Nouriel Roubini has stated that the world economy will shift to a bipolar system, with China’s renminbi as an alternative currency to the US dollar.
Image credit: Shutterstock, Pixabay, Wiki Commons
