The U.S. dollar has been dominating the global currency market since 1944, which has enabled it to influence policies worldwide. However, a growing trend of de-dollarization may be signaling the end of this, according to Jeffrey Tucker, an author and publisher who worked for former U.S. Representative Ron Paul and the Mises Institute for many years. In an interview with NTD News on Wednesday, Tucker shared his view on how the trend could impact the U.S. economy.
Tucker believes that history will record recent events as the turning point for the U.S. dollar. He cited the attack and sanctions imposed by the U.S. government on Russia following the outbreak of the Russia-Ukraine war as a crucial event in the trend towards de-dollarization. He argued that this has discouraged many powerful and important countries from holding the dollar as their primary currency. Instead, these countries are now turning their attention to other currencies.
The BRICS countries (Brazil, Russia, India, China, and South Africa) are among those starting to “marginalize” the USD, according to Tucker. He emphasized that this will affect the status of U.S. debt and may even restrain the Federal Reserve.
While Tucker acknowledged that the impact of de-dollarization within the U.S. might not be as pronounced as people think, he stressed that it could lead to inflation. The author warned that inflation is “sticky” and has been a direct consequence of the Fed’s mismanagement of the currency. Over the past two and a half years, Tucker noted that the USD has lost 15 cents of its value, emphasizing the need for the Federal Reserve to address the issue.
De-dollarization will also affect Americans as they travel abroad, according to Tucker. He argued that the dollar will not be king indefinitely, meaning that other currencies will take its place over time. This will directly hurt international businesses domiciled in the U.S., he notes.
Although Tucker does not believe that de-dollarization will happen overnight, he is confident that we are at a turning point. Going forward, countries will begin to marginalize the USD in exchange for alternative forms of currency. Despite these changes, the impact in the U.S. may not be as pronounced as some might expect. However, the need for the Federal Reserve to address inflation and work towards stabilizing the value of the currency remains clear.
Overall, the trend towards de-dollarization signals a shift in global economic policies and could have significant implications in the years to come. While predicting the full impact of this trend is difficult, it is clear that the status of the USD as the dominant global currency may be coming to an end. As countries continue to marginalize the USD, it remains to be seen what the impact will be on global markets and the economic stability of the United States.