Jim Rickards, economist and author of “Currency Wars,” says the US Treasury is actually the biggest threat to the US dollar’s status as a reserve currency. However, he warned that an increasing number of countries seeking alternatives to the dollar as a payment currency is also “a big problem,” stressing: “The dollar is under attack from all sides.”
Jim Rickards on the loss of the US dollar reserve currency status
Economist and author of “Currency Wars” Jim Rickards warned that even as China and other nations are intensifying their efforts to reduce their dependence on the US dollar, the biggest threat to the USD comes from the Treasury. He emphasized on “Fox & Friends Weekend” on Saturday:
The biggest enemy of the dollar as a reserve currency is not all those other countries. It’s the US Treasury.
Rickards explained the difference between payment and reserve currency. He noted that while many countries are moving away from using the US dollar for payments, the “biggest threat” to the US dollar is its potential replacement as a reserve currency. He detailed:
The US Treasury weaponized the dollar, froze Russian Central Bank reserves, and other countries looked around saying, ‘Hey, what if they don’t like what I did? And if they don’t like one of my policies, are they going to freeze my reserves?’
“If you say I want to get out of the dollar as a reserve currency, the only really good alternative is gold,” said the economist.
Commenting on efforts by China and several other countries to challenge the USD as a currency of payment, Rickards said:
That’s a big problem. The dollar is under attack from all sides. People are looking for substitute payment currencies.
A growing group of nations, including China, Russia, India, Malaysia and Saudi Arabia, have worked to reduce their dependence on the US dollar. Recently, China and Brazil reached an agreement to replace the USD with their own currencies in commercial transactions. In addition, the ASEAN countries have agreed to reduce their reliance on the US dollar for trade deals, and the BRICS nations are reportedly working to create a new currency.
Do you agree with Jim Rickards? Let us know in the comments section.
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