3 - 5 minute read
The US dollar has taken a major hit in recent months following a move by the US government to seize tens of billions of dollars’ worth of assets from Russian oligarchs. Economist and Bitcoin bull, Jeffrey Tucker, noted that this event marked a major shift in history and will go down as the turning point for the dollar’s dominance as the world’s reserve currency. In a recent interview with NTD, Tucker noted that since the end of the gold standard in 1971, the dollar has remained the dominant currency. However, the US’ decision to seize Russian assets, which were denominated in dollars, is starting to deter countries from holding USD.
“Now, if the US puts its political might behind other peoples’ willingness to hold its currency, and bludgeons them and attacks them and criticizes their policies and actually confiscates assets, then that just discourages people from holding the dollar,” says Tucker. He also notes that the most obvious effects of potential de-dollarization will be domestic inflation, which he says is probably not going away any time soon and is already out of the Federal Reserve’s hand.
In the long term, Tucker believes that the USD will be dethroned, and this could seriously hurt international business that’s domiciled in the US. This is because, for years, the dollar has been universally accepted as the gold standard when traveling anywhere around the world. However, if other countries start to abandon the US dollar, it would no longer be king.
According to Tucker, a lot of powerful and important countries are turning their attention to other viable currency options. The move away from the dollar has already started, and he believes that this could have serious implications for the international market. Tucker further explains that there’s a real possibility that other countries will start to take measures to switch from the dollar to other currencies, such as digital ones, to safeguard their assets.
The shift away from the US dollar as the world’s reserve currency is not without consequences. It could have a significant impact on international trade and currencies. For traders, it’s essential to keep an eye on trends and, perhaps, even tune their strategies to account for possible changes in currency markets. As for the future implications of this phenomenon on the global economy, it remains to be seen how things will pan out in the coming years.
The Bottom Line
The US government’s decision to seize assets from Russian oligarchs is having unintended consequences. The move is putting the dollar’s status as the world’s reserve currency in jeopardy, meaning we could be witnessing the end of an era. Although it’s still early days, the trend towards de-dollarization has already begun, and traders should remain vigilant in their monitoring and adjust their strategies accordingly. As the international market shifts away from the dollar, there will be opportunities and risks, and it’s essential to proceed with caution.