On Wednesday, in an interview, famed investor Jim Rogers told the Russian news outlet Sputnik that the US dollar is losing its leading global positioning, while Washington has become the world’s largest debtor.
The Quantum Fund co-founder pointed out that as more countries begin to shun its use in global trade, any nation continuing to deeply rely on it will begin to encounter difficulties in engaging in trade.
Rogers said, “Many friends of America are moving, trying to find something to compete with and ultimately replace the US dollar.”
He went on to point out that any international currency should have a geopolitically neutral status to facilitate trade settlements reliably, so nations can trust its use. He then noted that the lack of neutrality which has been exhibited by the White House, along with increasing concern about the credit-worthiness of the United States, have now stripped the US dollar of those attributes.
He went on, “Many people are starting to say: wait a minute, I don’t know if we want to use that money, because it will have a problem someday. But also, the world’s international currency is supposed to be completely neutral. Anybody can use it for anything you want. But now Washington is changing the rules. And if they get angry at you, they cut you off.”
Rogers speculated that as a rapidly growing number of countries are searching for an alternative to the dollar, it is even possible the Chinese yuan could replace the dollar as the most used currency in the settlement of international trade obligations.
Over the past few years, Russia has been building up its economic relationship with China, even adopting the yuan in settling its international trade obligations. By early April, the dollar had been replaced as the most-traded foreign currency on the Russian exchange. In addition, the yuan is continuing to move into a number of other markets throughout the world.
Rogers concluded, “It will happen. It has always happened. And America’s time is coming to an end. The American dollar this time is coming to an end. No currency has been on top more than 150 years. Nobody has always been on top, so it’s always happened.”
