Gringo Investor: “I Don’t Like to Say it, but I’m Afraid Something Else will Replace the Dollar”
A US investor named Jim Rogers has predicted a high probability that a currency will soon replace the dollar due to the external debt of the United States and the policies that the Trump Administration has implemented in the country and against China, which has most of the US debt.
The status of the world’s main reserve currency of the dollar may soon end, according to US investor Jim Rogers, who commented on the recent tensions between the US and China and the policies of the Trump Administration.
“I’m an American, so I don’t like to say it, but I’m afraid the US dollar is reaching its century of dominance and something else will replace it. The US is now the largest debtor nation in world history and is increasing [its debt] every day,” said the investor in an interview with RT.
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The United States has a debt that exceeds 26.5 trillion dollars and according to a report published in the Global Times, China can reduce a large part of its holdings of American debt in bonds to about 800,000 million dollars from a current level of more than one trillion of dollars. According to experts consulted by that news outlet, this may increase the risks of non-compliance, while the Trump Administration continues to be immersed in a policy of sanctions against China.
“China could sell all its US bonds in an extreme case, like a military conflict,” warned Xi Junyang, a professor at Shanghai University.
In this regard, Jim Rogers believes that if China decides to eliminate a fifth of the US debt “it will put pressure on interest rates in the US” and at the same time help China to strengthen the yuan because “if they sell US debt they are selling dollars, so their currency goes up.”
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The sanctions policy that the Trump Administration has chosen, according to the investor, has made China and other countries look for other alternatives, while Washington does not take this risk so seriously considering that the Asian giant is the second country holding the most US bonds in the world.
“If Washington gets mad at you, it imposes sanctions on you. That hurts everyone. So the Chinese, the Russians, the Indians, the Brazilians and other countries are starting to look for a competitive alternative currency to the US dollar,” he said.
According to Rogers, the dollar may still show strength next year after the intensified protests of Black Lives Matter against police brutality in the US and the upcoming presidential elections on November 3, “but that will probably be its last chance,” Rogers concluded.
Featured image: © CC BY 2.0 / Mike Poresky / Fire
Translation: OT/JRE/EF
