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Project Syndicate/Kenneth Rogoff/3-30-2021
“The mighty US dollar continues to reign supreme in global markets. But the greenback’s dominance may well be more fragile than it appears, because expected future changes in China’s exchange-rate regime are likely to trigger a significant shift in the international monetary order.”
USAGOLD note: Rogoff sees the dollar’s exorbitant privilege unravelling and finally ending. Concurrently, he sees the yuan gaining ground, particularly in Asia, as a rival reserve currency. “Modernization of China’s exchange-rate arrangements,” he says, “could deal the dollar’s status a painful blow.” One would think that gold is likely to play a strong role in any Asian currency regime given the cultural attachment throughout Asia, China’s huge gold reserve in addition to its place as the world’s top gold producer, and the lack of any clear alternative as the ultimate store of value.
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