Introduction
There is an increasing trend to move away from the U.S. dollar as the king of reserve currencies. This global movement is fueled by factions within the U.S. seeking to weaken the dollar intentionally. One of the primary reasons behind this effort is to pave the way for the introduction of a central bank digital currency (CBDC) and a new monetary system. In this article, we explore the motivations behind the de-dollarization movement, the potential consequences, and the key individuals involved.
The Unsustainable Debt Levels
The U.S. is grappling with unsustainable debt levels, leaving policymakers with limited options to fix the situation. According to Andy Schectman, President and Owner of Miles Franklin, there are only a few ways to address the issue: inflation, default, or finding a villain. By weaponizing the U.S. dollar, the country is driving other nations to turn away from the greenback, including Saudi Arabia. The U.S.’s green initiatives, currency inflation, destabilization of the bond market, and vilification of fossil fuel usage have pushed Saudi Arabia away, potentially leading to the loss of the dollar’s petro status as a settlement currency. Schectman points out that OPEC, Xi Jinping, and Putin are being positioned as the villains behind this move.
A Deliberate Effort from Within
According to Schectman, the de-dollarization movement is not a mere coincidence. Powerful individuals within the U.S., such as Jared Bernstein, the chairman of President Biden’s Council of Economic Advisers, have expressed their desire to see the greenback fail. Bernstein stated in a 2014 op-ed that the dollar’s reserve-currency status has become a burden and needs to be dropped. In another op-ed from 2018, he mentioned that a diminished reserve status for the dollar would be positive. By weaponizing the dollar, those in power are possibly working towards de-throning it as the global reserve currency.
The Role of CBDC in the Monetary Shift
The introduction of a central bank digital currency aligns with the theory of a deliberate de-dollarization effort. Lael Brainard, the National Economic Council Director, is known for supporting a CBDC. This position, coupled with other advisors’ push to eliminate the dollar’s reserve status, raises questions. Is this all part of a larger plan to level the economic playing field or to move away from the debt-based Keynesian economic experiment? A CBDC would serve as a key component in a new monetary system.
The Growing Interest in CBDC
Currently, over 130 countries, representing more than 95% of global GDP, are exploring the implementation of a CBDC. This significant increase from just 35 countries in May 2020 indicates a growing interest in this digital currency. The advent of a CBDC seems inevitable, but privacy concerns remain a major consideration. While a CBDC brings advantages and disadvantages, including potential loss of privacy, Schectman believes its introduction is almost certain. The question is whether a significant event will trigger widespread acceptance.
The Pushback and Uncertain Future
The implementation of a CBDC in the U.S. is likely to face pushback from various quarters. In a country where privacy is highly valued, the loss of anonymity associated with digital currencies could lead to resistance. Schectman emphasizes the potential for a frightening future if such an event occurs, highlighting the unease among a significant portion of the population.
Conclusion
The movement to dethrone the U.S. dollar as the global reserve currency is gaining momentum. Factions within the U.S. are actively working towards weakening the dollar to introduce a new monetary system and central bank digital currency. The country’s unsustainable debt levels and the desire to find a solution have contributed to this trend. While a CBDC seems inevitable, the tensions and uncertainties surrounding its implementation make the future uncertain. Only time will reveal how this global move to dump the dollar unfolds.
