Can U.S. maintain its status as reserve currency 10 years from now ??

US dollar is losing ground as the reserve currency of the world. US dollar holding as percentage of global central bank holding is shrinking for over 10 years now, it has gone from >80% to now in 60% range.

Chinese economy is evolving rapidly from Manufacturing to Technology and being Service-driven

Middle East (OPEC) and China’s trade partnerships (oil for infrastructure) reducing incentives for Petrodollars.

Then, there are other major economies that are rising, most of these countries have come a along way from where they were end of World War II.

Last but not least our policies are self-sabotaging, we are creating inflation through our excessive money printing spree. Our debt is at all time high, we keep raising the ceiling, forget about lowering the debt levels, we run the risk of default if we do not keep raising the ceiling.

The point is if we extrapolate this over next 10 years, you can pretty much see the writing on the wall.

And I have not even factored in the role Bitcoin / Crypto can play as masses flee from US dollar

When it will start happening, it will not happen gradually, it would look like abrupt and sudden shift that was out of our control.

( I will write a separate post on consequences of US dollar losing its status as a reserve currency of the world)

Having reserve currency is one the greatest powers a country can have and our status as reserve comes from a historic event (World War II) that led to the shift in the world order (as Ray Dalio calls it), but we cannot take our primacy for granted any more.

Here are few things we can do to ensure we maintain our status as the dominant reserve currency:

I can keep going with this list and talk about Education, healthcare etc. but I feel none of it would matter if we do not get the handle on the three points I shared above. We need Government / politicians to get out of their own way, so we can move forward.

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