Mohacsy's Safe Portfolio Member Forum

[gfp927z]

Elroy, Thanks for the insights :o)

A judicious use of the SDR could theoretically extend the useful life of the US dollar reserve system for many years (similar to how the US dollar supplemented the declining British pound as the world's reserve currency between WW 1 and WW 2). But if they have to roll out too many trillions of SDRs during the next global financial crisis (to supplement the depleted Fed), then that might fatally undermine the US dollar as the main reserve currency.

>> Fed is far more robust than you imagine <<

Let's hope so, but with their balance sheet significantly tapped out already (9 tril range), the Fed likely can't handle another 2008 type global bailout by itself, without triggering a loss of confidence in the dollar. The Western finance oligarchy know this and have been preparing for an eventual transition to a more global reserve system. The SDR was originally created (1969) since they could see the Bretton Woods system teetering. The Petrodollar arrangement luckily saved the day after the dollar lost its gold backing (1971), but nothing lasts forever. Adding to the intrigue, China-Russia-BRICS and others are working on their own non-dollar systems, so looks like the handwriting is on the wall. One possibility is that the US/West may soon have to pre-emptively 'do something' to force the transition into a new reserve system that they have significant control over.


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>>> De-Dollarization Is Happening at a ‘Stunning’ Pace, Jen Says

Bloomberg

by Matthew Burgess

April 18, 2023


https://finance.yahoo.com/news/dollarization-happening-stunning-pace-jen-082144378.html


(Bloomberg) -- The dollar is losing its reserve status at a faster pace than generally accepted as many analysts have failed to account for last year’s wild exchange rate moves, according to Stephen Jen...

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