CNBC: 3 Reasons the World Could Turn Its Back on the US Dollar

The US dollar may lose its status as the world’s reserve currency due to weak US governance and geopolitical pressures: the North Korea threat, diminished US-EU transatlantic ties and China’s prominence in global markets, including skill in managing credit excesses, so far, without disrupting the global economy. China strives to increase demand for yuan, announcing plans to buy oil in yuan and allow trade partners to settle that yuan in gold. “China is the world's largest importer of crude,” writes David Reid for CNBC, reporting that analyst John Hardy “forecasted that maintaining a stable currency while buying oil in yuan will be the first steps to increased global demand for renminbi.” Iran and Russia, burdened by sanctions, would go along with the plan. As the United States pursues an isolationist path, Japan and Europe could find the country a less reliable partner. Some US plans like tax reform may provide a short-term boost, but dysfunctional politics could deter other nations in funding rising US debt. The US debt is about $20 trillion, and foreign nations hold about 30 percent. Hardy concludes, “the rest of the world has its own agenda.” – YaleGlobal

CNBC: 3 Reasons the World Could Turn Its Back on the US Dollar

US dollar could lose reserve currency status due to Chinese leadership and skill in managing credit excesses, North Korea threat and US isolationist bent
David Reid
Thursday, October 12, 2017

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David Reid writes for CNBC.com. He previously worked as a Television Producer on CNBC International’s Squawk Box Europe, European Closing Bell and Worldwide Exchange.

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