The U.S. dollar’s reign as the world’s reserve currency is coming under threat, as evinced by the recent surge in gold prices, according to Goldman Sachs, reports Bloomberg.
The dollar faces several risks, including that the U.S. Federal Reserve may shift toward an “inflationary bias” and a rise in political uncertainty, according to Goldman strategists.
The Bloomberg Dollar Spot Index is on course for its worst July in a decade.
It is only the beginning folks.
Hug your gold coins.
-RW
If the dollar were to lose its status as a widely used reserve currency, would some or all those dollars held by central banks come back to the U.S.? Would this produce more domestic price inflation in addition to that caused by money creation?
ReplyDeleteYes, yes it would. The big question is what would they replace the dollar with?
DeleteVery good question. Hard to imagine a joint currency. Perhaps the RMB (yuan)? This is definitely something USA goes to war over (ie if the yuan takes its, then well have to give them democracy one bomb at a time)
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