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IPFS News Link • Economic Theory

ZeroHedge 'Dollar' Debate Recap: BRICs Bust, CBDCs Crushed, & No "Non-Painful Way"

•, by Tyler Durden

Our esteemed economic experts vigorously debated the question: Will the Dollar remain the global reserve currency in 2030?

Making the negative case, Austrian economist Bob Murphy put forth a succinct case why foreigners will continue to ditch the dollar. In simple terms, an abysmal fiscal situation and poor customer service.

"These numbers are astronomical," said Murphy, adding "It's happening right now."

"So yes, I don't see a non-painful way to change this trajectory. And other things equal, you're a foreigner and you keep seeing them pile up the debt - you're going to conclude 'this is unsustainable, we need to start weaning ourselves off of reliance on this currency."

Brent "Dollar Milkshake" Johnson countered that — despite the many blunders of the Biden administration — the dollar is stronger than ever with the core driver being the overseas "Eurodollar" market wherein trillions of USD-denominated debt remains outstandin.

"To your point, reserves have fallen. Interest rates have risen. The interest expense is now the highest line-item in the US budget," said Johnson. "But all that has done is turbocharged the dollar."

"Despite helicopter money. Despite PPP. Despite numerous bailouts. Despite BTFP. Despite a guy in the White House who really doesn't know where he's at. Despite a horrible withdrawal from Afghanistan... you can go on and on about the reasons that the US is in a bad situation and as a result the interest rates are going to rise. But the interest rates rising makes the dollar more attractive."