The Dollar’s Days as Global Reserve Currency Are Numbered

World’s Largest Asset Manager Warns: The Dollar’s Days as Global Reserve Currency Are Numbered

The comments below are an edited and abridged synopsis of an article by Tyler Durden

Forty percent of the US deficit is funded by external factors. During a speech last month, Russian President Vladimir Putin issued a warning that the US risked undermining the dollar’s reserve currency status with its sanctions regime. The US is fighting its creditors (like China) by engaging in an acrimonious trade war. Furthermore, the CEO of the world’s largest asset management firm said, during a panel discussion at the New Economic Forum in Singapore, that the US dollar’s status as the world’s dominant currency would not last forever.BlackRock CEO Larry Fink pointed to the widening US budget deficit as the biggest risk to the dollar’s status as the global hegemon. Interest rates rise, the government struggles with its newfound debt premium and collateral damage in the equity market will be almost inevitable. The threat of interest rates becoming too high to sustain the economy with its growth rate is becoming a real concern for the US. Since the dominance of the greenback is the root cause of global financial and economic crises, Putin and Chinese PresidentXi Jinping are working on a different solution of their own.