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FameEX Hot Topics | Former Treasury Official Warns of Potential Economic Catastrophe if US Dollar Ceases to Be Global Reserve Currency

2023-03-29 15:56:05

Monica Crowley, a former Assistant Secretary for Public Affairs for the U.S. Department of the Treasury, recently cautioned about the potentially disastrous outcomes that the US could face if the US dollar were to lose its global reserve currency status. Speaking on Fox News, Crowley explained that since the end of World War II, the US dollar has been viewed as a safe haven and has been backed by the strength and economic power of the US since being taken off the gold standard by President Nixon five decades ago.

Crowley emphasized that if emerging economies were to move away from the US dollar towards the Chinese yuan, it could spell catastrophe for the US economy, and that the abandonment of the US dollar would be calamitous, making it difficult to overstate just how severe the consequences would be.
One crucial factor is that oil has always been traded in dollars, and if this were to change, it would mean the end of the US dollar. Crowley stressed that the US dollar's reserve currency status has been a privilege, but that the US has abused this privilege through reckless monetary and fiscal policies in recent years, leading to the devaluation of the US dollar.

Losing reserve currency status could lead to a significant devaluation of the US dollar, a sharp increase in interest rates, and a decline in the value of US bonds, which would have a significant impact on the US economy and could result in a global economic crisis. In addition, losing reserve currency status would have political implications, as the US has long been viewed as a global superpower, and the dominance of the US dollar has been critical in maintaining this position. Losing reserve currency status would be a setback to the US's prestige and could have long-lasting effects on its influence in global affairs.

In conclusion, Crowley's warning highlights the importance of the US dollar's reserve currency status and the potential consequences if it were to be lost. The US must take measures to address its reckless monetary and fiscal policies to maintain its position as a global economic power.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.

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