Patrick Boyle On Finance Is China Dumping the Dollar? - And is Ray Dalio Right about Reserve Currencies?
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Apr 22, 2025 The podcast delves into the financial chaos triggered by Trump's tariffs, revealing a sell-off of U.S. assets and its implications for investors. It questions whether a shift away from the U.S. dollar is underway, especially as China diversifies its portfolio. Insights into Ray Dalio's theory about the evolution of reserve currencies spark debate. The discussion highlights how geopolitical tensions and local economic policies could shape the future of American investments amidst rising market volatility.
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US Dollar Risk Reassessment
- Rising US Treasury yields accompanied by a falling dollar and stocks indicate fear of increased US risk, not just market volatility.
- This unusual pattern suggests investors are reassessing the structural attractiveness of the dollar as the global reserve currency.
Long-Term Currency Shifts
- Economic power shifts occur over centuries, not months, following 250-year cycles of rising and falling empires.
- Ray Dalio sees the current period as a transition in world leadership, impacting reserve currency status.
US Dollar's Enduring Role
- The US dollar’s reserve currency role originated post-WWII due to US economic dominance and gold reserves.
- Despite shifts to a floating exchange rate, the dollar remains central due to trust, liquidity, and market size.