Rogers believes that “something” will eventually replace the US dollar as a reserve currency. According to the investor, the US dollar will have its “last chance” in 2021.
The dominance of the US dollar as a world reserve currency is nearing its end, according to investor Jim Rogers. Former George Soros’s partner believes that the US dollar is losing strength while the Chinese fiat currency, the yuan, is strengthening.
According to the co-founder of Soros Fund Management, “something” would replace the US dollar shortly. He did not directly refer to the yuan, but he envisions an adverse for the US fiat currency compared to its Chinese counterpart.
Rogers stated that “the US dollar has been the strongest currency in the world” for almost 100 years. In this regard, he referred to the background of the British pound and the Dutch guilder, the most reliable fiat currencies on the planet at the time.
The Chinese state medium Global Times reported that the Asian country plans to reduce its holdings of US debt from USD 1 trillion to USD 800 billion, around 20%. China would even be willing to sell all its US debt bonds in an extreme case, anticipating an armed conflict, according to the same medium.
The also co-founder of Quantum Fund considers that the growing tensions between the United States and China create a climate of uncertainty. This will eventually affect the dominance of the US dollar as a world reserve currency.
The increasing indebtedness of the United States adds to the tensions and the Chinese plans to erase at least 20% of its holdings of US debt. According to Rogers, this will be another negative factor in the immediate future of the US fiat currency.
The financial analyst predicted that the United States could revitalize control of the US dollar next year, but he warned that that would probably be its last chance.”
US Dollar Crash and Bitcoin Boom
The US dollar is not undergoing its best moment. In mid-August, the USDX weighted index fell to levels not seen since May 2018, while the price of Bitcoin has remained more than 50% higher so far this year.
Rogers’ position coincides with that of other renowned economic analysts, who consider that the dominance of the US fiat currency is at serious risk. Robert Kiyosaki, author of the best-seller “Rich Dad Poor Dad”, maybe one of the most persistent.
On several occasions, Kiyosaki has referred to the imminent death of the US dollar as a global reserve currency. He has even seriously considered Bitcoin as a safe alternative to the crisis that he sees coming.
On the other hand, Rogers stated that many countries — among which are Russia, India, and, Brazil — are considering alternatives to the US dollar. To summarize, this position stems from the behavior of the United States regarding other countries. He said that the sanctions that Washington imposes “hurt everyone.”
Apart from China, Russia has also been reducing its holdings of US debt, favoring its reserves in gold. At the same time, dozens of countries have been paying more attention to the possibility of launching their digital currencies (CBDCs).
By Alexander Salazar