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Markets Zoon's avatar

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.

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Greg's avatar

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?

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King CAMBO's avatar

The Federal Reserve and the Great American Gold Heist:

https://kingcambo812.substack.com/p/fear-and-loathing-at-the-federal

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Chase Bradley's avatar

"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."

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Devo Brown's avatar

Top notch assessment as always.

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Jarl Tollefsen's avatar

My dollars never go down, Alf! I go down!

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