Former US Treasury Department Assistant Secretary for Public Affairs Monica Crowley has warned of “catastrophic” consequences if the US dollar loses its status as the world’s reserve currency. “That would mean the end of the US dollar,” she said, predicting that “there would be a complete implosion of the world economic system.”
Crowley warns of ‘catastrophic’ consequences if US dollar loses global reserve currency status
Monica Crowley, former Assistant Secretary for Public Affairs at the US Treasury Department, explained on Fox News on Saturday what would happen if emerging economies moved away from the US dollar towards the Chinese yuan and the US dollar ceased to be the dominant currency in the world. She emphasized:
It’s really hard to overstate how catastrophic the abandonment of the US dollar as the world’s global reserve currency would be.
Crowley explained that since the end of World War II, the dollar has been considered a safe haven. Initially, it was backed by gold, but after President Nixon took the US off the gold standard, there hasn’t been any solid asset backing the dollar for the past 50 years. Instead, it has been backed by the “strength and economic power” of the US, he said.
The former Treasury official added that another important factor is “the fact that oil has always been traded in dollars,” warning:
If that were to end, it would mean the end of the US dollar.
Emphasizing that the US dollar having the status of the world’s reserve currency “has been a real privilege,” he said: “We have abused the privilege with totally reckless monetary and fiscal policy for so many years, certainly in the last two years, that It has really devalued the dollar.”
Crowley continued: “On top of that, you now have this perfect storm of Biden’s weakness, his war on US domestic energy production, the Ukraine war… Because of all these things, we have America’s enemies, led by China, forming a new economic block”.
The former Assistant Secretary for Public Affairs added that since we are at a pivotal moment, “all it would take at this point … is for Saudi Arabia, which has indicated that it is open to this, to say, ‘You know what, we’ll be open to consider other currencies to trade oil.’” Crowley warned:
If that happened, there would be a complete implosion of the global economic system, but certainly of the American economic system. And if that were to happen, you’d be looking at sky-high inflation raging, the Weimar Republic type of inflation. If you think inflation is bad right now, just wait.
“But more importantly, we would lose our economic dominance and we would lose our superpower status,” he said.
Do you think the US dollar will lose its status as the world’s reserve currency and do you agree with Monica Crowley on the “catastrophic consequences”? Let us know in the comments section.
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