Manage episode 285791592 series 2854797
What is the long-term future of the US dollar?
In this episode, I talk Lyn Alden who is an engineer in love with finance. She runs an investment research service for individuals and institutions at her website where she covers value investing with a global macroeconomic view.
As a big theme, she has been exploring the strength of the US dollar in the rapidly evolving world order and what the future holds for the world’s reserve currency. She claims that the 2020 decade will see a weakening of the US dollar due to a phenomenon known as the Triffin dilemma and that’s what I discussed with her in this episode.
What we talk about
0:05 – Introduction
3:52 – What is a reserve currency?
10:27 – How did the US dollar replace hard assets like Gold as a reserve in foreign countries?
15:10 – The arrival of fiat currency
20:37 – What determines the strength of a currency
24:38 – The role of the second World War in strengthening the US currency
28:33 – Why did the USA want to push the US dollar as a reserve currency?
31:51 – What pressures prevent printing too much money?
34:34 – Triffin’s dilemma
39:20 – What is the petrodollar system?
40:04 – The case for the weakening of the US dollar weakening
45:53 – Long-term implication of the US dollar getting weaker? And why has inflation not hit even when there are more US dollars in circulation?
53:25 – Who benefits from a weak US dollar?
57:24 – How would a weakened dollar influence the dollar’s status as a reserve currency?
1:01:02 – Would the US maintain its global reserve currency status or accelerate its desire to not be a global reserve currency?
1:04:44 – What happens when the US dollar is not the global reserve currency anymore?
1:08:40 – Is the idea of having more reserve currencies a good one?
1:09:26 – Do you think a cryptocurrency like bitcoin could also become a kind of reserve?