As More Countries Link Arms With China, Is US Dollar Dominance Truly at Risk?
A growing number of major economies have recently criticized the status of the U.S. dollar as the primary currency for global trade, leaving experts to fear long-term danger for U.S. dollar dominance.
Several countries expressed a strong desire to change the global reserve currency at the Brazil, Russia, India, China and South Africa (BRICS) summit last week, threatening current U.S. dollar dominance. While the global reserve currency is not going to change overnight, the future of the dollar as a global reserve currency could be endangered if U.S. adversaries can coordinate effectively, and the U.S. does not take appropriate action, experts told the Daily Caller News Foundation.
“The US is absolutely in danger of losing global reserve currency status,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the DCNF. “The threat has increased because the Biden administration has devalued the dollar by an astonishing 16% and also weaponized the dollar abroad.”
If the dollar is replaced as the global reserve currency, experts warn that the U.S. could be faced with hyperinflation as the dollars that are currently being used in the international market come back home, flooding the market. Additionally, the loss of global reserve status would weaken the dollar compared to other countries, decreasing the borrowing power of the U.S. government, which could lead to a need to cut spending.
BRICS will be admitting six new countries—Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates—to its coalition starting Jan. 1, 2024, which could add power to the calls of the other BRICS countries to supplant the U.S. dollar. Following their admission, the coalition will encompass 3.7 billion people. (Read more from “As More Countries Link Arms With China, Is US Dollar Dominance Truly at Risk?” HERE)
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