Geopolitics Decanted by Silverado
Why Reports of the US Dollar’s Death Have Been Greatly Exaggerated
Aug 7, 2023
Geoeconomist Douglas Rediker discusses the enduring dominance of the US dollar, the lack of viable alternatives, and the limitations of the Chinese renminbi. The podcast also explores seizing Russia's Central Bank Reserves for Ukrainian reconstruction and the economic repercussions for China if it invades Taiwan.
38:45
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Quick takeaways
- The US dollar remains the dominant global reserve currency, allowing for the imposition of sanctions and wielding significant power.
- Viable alternatives to the US dollar are limited, with the renminbi lacking usability and convertibility compared to the dollar.
Deep dives
The Strength and Importance of the US Dollar
Despite speculation about the decline of the US dollar, its strength remains steady. While there has been a slight decrease in global dollar reserves, the dollar has been around 60% of global reserves for decades, with a current estimate of 58-58.5%. The US dollar's position as the world's dominant global reserve currency allows for the imposition of sanctions and wields significant power. The weaponization of the US dollar is not well-received by other countries, but alternatives to the dollar are limited. The renminbi is increasing in trade and reserve currency share, but its usability and convertibility are still not comparable to the dollar.
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