Dollar hegemony predicted to wane by 2050 according to renowned economist Rogoff.
Casual Take on Rogoff's Prediction: The Greenback's Reign Won't Last Forever
Hey there! Guess who's predicting a shakeup in the global currency system? Top economist Kenneth Rogoff, that's who!
In an interview with UniCredit, Rogoff, a professor at Harvard, reckoned that by 2050 the almighty dollar's dominance won't be what it is today. He said, "Absolutely not!" He also added that China's steady withdrawal from reliance on the dollar will sway other countries too.
Why's that? Well, the Greenback's grip on foreign exchange reserves and international debt denomination might not be as firm as it once was. Rogoff explained that it's already evident in foreign exchange reserves, where the dollar's share has been quite slipping for around a decade now.
Now, you might wonder what's happening here. Basically, other countries, including China, might not tie their currencies as closely to the dollar. And those countries seem to be wise to this shift, considering the dollar's dominance is showing signs of fraying at the edges.
Source: ntv.de, RTS
Extra Insights:
- Rogoff has made several predictions and analyses about the future dominance of the U.S. dollar in the global currency system, suggesting a significant decline in its preeminent role over the coming years.
- He's voiced concerns about a possible major crisis in the dollar's status as the global reserve currency within the next four to seven years. Rogoff attributes rising interest rates, excessive debt, and challenges in debt control as factors that threaten the dollar's position.
- The U.S. fiscal outlook and threats to central bank independence, specifically geopolitical tensions between the U.S. and China, also contribute to accelerating the erosion of dollar dominance.
- China’s renminbi is actively increasing its global footprint, offering an alternative to the dollar, which is a critical factor in weakening dollar dominance.
- The rising use of cryptocurrencies, driven largely by gray market actors to evade taxes and bypass sanctions, also poses a threat to the dollar's dominance. While Rogoff acknowledges the dollar’s current supremacy, he views crypto as a rising challenger that gradually erodes this dominance.
The Commission, perhaps comprising of business-savvy individuals, has also been asked to submit a proposal for a directive on the protection of workers from the risks related to exposure to ionizing radiation, as the finance sector eyes a potential shift in global currency dominance away from the United States dollar. This anticipated transition may be influenced by countries like China, which are actively reducing their reliance on the dollar.
