Being the global reserve currency brings immense advantages. But reserve status is not a birthright. It comes with stringent requirements. In a world where the safety-liquidity-return hierarchy governs global capital flows, breaching the “safety” pillar would be the most dangerous move of all.
Yankee reserve $ is the cleanest shirt in the laundry.
If someone can please provide another alternative to the US$ as a reserve currency, I am all eyes. Please keep in mind, that Yankee $ is the most fungible, it is the most transparent, it is accepted almost worldwide, transfers occur almost immediately and seamlessly, the American government has never defaulted on a Treasury debt payment, the US remains the largest economy in the world, the US military is the largest and most lethal on the planet, Yankee $ is used a currency peg and the the US has AA credit rating.
If a responder mentions gold as a replacement, please explain how long it will take for physical gold transfers to occur? And, what happens when the debtor doesn't pay?
"Totally agree that the real story isn’t just about ‘China selling’ but about the bigger structural shift: the dollar losing its safe-haven bid. If that trend sticks, the passive under-hedging strategies that worked for decades could flip into a massive headwind. Appreciate you breaking it down so clearly."
Being the global reserve currency brings immense advantages. But reserve status is not a birthright. It comes with stringent requirements. In a world where the safety-liquidity-return hierarchy governs global capital flows, breaching the “safety” pillar would be the most dangerous move of all.
Yankee reserve $ is the cleanest shirt in the laundry.
If someone can please provide another alternative to the US$ as a reserve currency, I am all eyes. Please keep in mind, that Yankee $ is the most fungible, it is the most transparent, it is accepted almost worldwide, transfers occur almost immediately and seamlessly, the American government has never defaulted on a Treasury debt payment, the US remains the largest economy in the world, the US military is the largest and most lethal on the planet, Yankee $ is used a currency peg and the the US has AA credit rating.
If a responder mentions gold as a replacement, please explain how long it will take for physical gold transfers to occur? And, what happens when the debtor doesn't pay?
The Federal Reserve and the Great American Gold Heist:
https://kingcambo812.substack.com/p/fear-and-loathing-at-the-federal
"Totally agree that the real story isn’t just about ‘China selling’ but about the bigger structural shift: the dollar losing its safe-haven bid. If that trend sticks, the passive under-hedging strategies that worked for decades could flip into a massive headwind. Appreciate you breaking it down so clearly."
Top notch assessment as always.
My dollars never go down, Alf! I go down!