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Alasdair Macleod: The end of the road for the dollar
By Alasdair Macleod
Head of Research, GoldMoney
via Schiff Gold, White Plains, New York
Thursday, September 28, 2023
With the Asian hegemons undoubtedly able to introduce gold standards, where does that leave the dollar?
This article describes just how precarious the fiat dollar's position has become. For now the dollar appears to be buoyed up by rising bond yields. However, as they rise further, portfolio losses for foreign investors are likely to increase, leading to dollar liquidation.
It is not generally realized how many dollars and dollar securities are owned by foreigners, the bulk of them being held outside the U.S. banking system. And the quantity of foreign currency owned by Americans to absorb this selling is very small in comparison.
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Higher interest rates and bond yields also threaten to destabilize the banking system, a problem equally faced by the Eurozone, the UK, and Japan. But how can the U.S. government protect itself from this danger?
The only answer is to admit to the end of the fiat era and put the dollar back onto a gold standard.
However, the U.S. government does not have the mandate to take the required actions and officially at least is still in denial over the need to stabilise the currency. The legal position referring to the constitution is briefly touched upon, because laws will have to be considered to secure the dollar's future.
Unfortunately, the U.S. Treasury's gold holdings are almost certainly compromised. Furthermore, since the Asian hegemons have accumulated substantial holdings of bullion in addition to their official reserves, there is bound to be a strong reluctance to hand economic power to Russia and China by endorsing a return to gold standards.
My conclusion is that the era of the fiat dollar-based global currency system is rapidly ending, and for America and the dollar there can be no Plan B. It will almost certainly lead to the end of the fiat dollar, and the end of the U.S. hegemony. ...
... For the remainder of the analysis:
https://schiffgold.com/commentaries/the-end-of-the-road-for-the-dollar/
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