The dominance of the US dollar is called into question
“Only once before has a dominant currency been unseated, when the dollar took over from sterling. Such a dramatic shift in the global geopolitical order is unlike to arrive any time soon; in fact, for now, the pandemic will strengthen the currency’s dominance. But the weakening of the dollar suggests that this geopolitical order is nonetheless beginning to fray at the edges. The US should treat it as a warning. By relinquishing global leadership and damaging the credibility of its own institutions, the US risks forfeiting its “exorbitant privilege” once and for all.”
USAGOLD note: As in Hemingway’s The Sun Also Rises: “How did you go bankrupt? Two ways. Gradually, then suddenly.” So it can happen with a reserve currency.
Repost from 9-9-2020