World is turning its back on the dollar, Saxo Bank FX strategist writes

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World is turning its back on the dollar, Saxo Bank FX strategist writes by Chris Powell – GATA

hree Reasons the World Could Turn Its Back on the U.S. Dollar

By David Reid
CNBC, New York
Wednesday, October 11, 2017

A combination of geopolitical pressures could spark the end of the U.S. dollar as the world’s reserve currency, according to the head of foreign exchange strategy at Saxo Bank.

In a quarterly outlook note titled “The World Is Turning Its Back on the Almighty Dollar,” John Hardy claimed the U.S. currency was “increasingly dysfunctional” and there was an urgent need to replace it.

The currencies analyst highlighted these three geopolitical issues currently putting pressure on the dollar’s status:

“– The ongoing rise of China as it assumes a more prominent role in global trade and financial markets and in particular how it will manage policy and unwinding the excesses of its credit bubble in the wake of the 19th Party Congress scheduled for October 2017 without upsetting its domestic economy and the global economy.

“– The North Korean regime’s striving to maintain credibility and untouchability as a nuclear power and how this impacts China-U.S. relations, but also how Japan deals with this threat in terms of domestic as well as foreign policy,

“– The loosening of the U.S.-Europe transatlantic alliance and how Europe and the European Union find their feet as a more independent superpower — or not — in their own right after the German elections.”

Hardy extracts “de-dollarization” as a direct theme that can be pulled from China’s situation as the country looks to encourage demand for its yuan.

“China is eyeing the benefits of having its own currency play a larger role and to supplant the U.S. dollar’s role in global trade,” he said. “The initial focus is on the global oil trade, where it has announced the intention of buying oil in yuan and allowing trade partners to settle that yuan in gold.”

Hardy said settling in gold is a clever move by Beijing as it provides oil-exporting countries with a greater degree of comfort. …

… For the remainder of the report:

https://www.cnbc.com/2017/10/11/the-us-dollar-may-be-at-risk-as-the-glob…

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Chris Powell

The Gold Anti-Trust Action Committee was organized in the fall of 1998 to expose, oppose, and litigate against collusion to control the price and supply of gold and related financial instruments. The committee arose from essays by Bill Murphy, a financial commentator on the Internet (LeMetropoleCafe.com), and by Chris Powell, a newspaper editor in Connecticut. Murphy's essays reported evidence of collusion among financial institutions to suppress the price of gold. Powell, whose newspaper had been involved in antitrust litigation, replied with an essay proposing that gold mining and investor interests should act on Murphy's essays by bringing antitrust lawsuits against financial institutions involved in the collusion against gold. The response to these essays was so favorable that the committee was formed and formally incorporated in Delaware in January 1999. Murphy became chairman and Powell secretary and treasurer.