Note. The court accepted the trial of the president. How will the Assembly, social groups, the Government, the army, those who only want chaos and violence react? Possibilities: from resignation to death on the cross. What does the state get? Nothing. A policy that destroys all coexistence.

The “dollar problem” resurfaced after the banking explosion. At least three factors:

One, geopolitical tensions have risen, with some seeking to replace or at least influence the dollar (remember Lenin’s line: “The best way to attack capitalism is to attack its currency”). This is the case of China, which has teamed up with Russia to have much more exchange in yuan, and is pushing other countries (India) to follow the same path, but also oil countries like Iran who want to leave the dollar in that market (it is not new, some say that the central goal of the invasion of Iraq was to prevent the dollar from losing its dominance).

Twopoor US economic policy is leading in this direction: the public debt has grown exponentially, and the creation of dollars by the Federal Reserve has also increased, which can only weaken their currency (“they seem to be trying” to lose the privileges of the central currency).

Silicon Valley Bank: Why America’s Bank Failed (And What the US Federal Reserve’s Bailout of Its Clients Means)

Three, there is the famous Triffin Dilemma which affects the reserve currency and weakens it in the long run. A) It is a reserve currency because it creates confidence (quality). B) It must have the capacity to meet the growing needs of the world economy (quantity), which implies growing external indebtedness. C) Point B creates distrust in that currency, which contradicts point A.

The dollar will remain the reserve currency for at least my lifetime… What’s your bet?

But an important comment: the dollar is still the central currency, not because of its virtues (few), but because of the fragility of the others (they are worse)… What could replace it?

One: euro? It’s not very solid because it comes from 20 countries trying to reach an agreement with very different goals. It is often thought that the euro will break at some point (this doubt existed in the USA with the dollar until the end of the 19th century) If they do not believe in themselves, can it be the central currency of the world?

Two: Yuan? The key to a reserve currency is its freedom of circulation and buying/selling, which does not exist with the yuan, it is absolutely controlled by the government. Switch to? Maybe, but for a while. Obviously, as part of its expansion of power, China would like to “put a cherry” on the reserve currency and all the advantages it brings.

Three: another currency? The British pound, but the strength behind it has already passed, the same in a way with the Japanese yen, while the Swiss franc cannot supply the world due to the size of its economy.

Dollarization in unstable times

four: international currency? For example, around the IMF’s special drawing rights. But frankly, it would be unheard of for an international bureaucracy to manage a central currency.

Five: return to gold? It would be wonderful to have a pretty solid anchor… but that’s not going to happen because the last thing the world wants is an anchor that stops excesses.

Prognosis? The dollar will continue to be the reserve currency for at least my lifetime…later there may be surrogate digital currencies, various currencies, yuan?, any surprises? What are you betting on? (OR)