Dober komentar Wolfganga Munchaua o smešnosti argumentov ameriških ekonomistov, da vloga dolarja v nastajajočem multipolarnem svetu ni ogrožena, ker ima Kitajska presežek z trgovinski bilanci. Vendar: bolj kot ZDA uporablja svojo valuto kot orožje v obliki finančnih sankcij, večja je verjetnost, da bo izgubila status svetovne valute. Kateri tuji (nacionalni) premoženjski sklad, zunaj držav Nata, bi še vedno želel imeti velik delež premoženja shranjen v ameriških obvweznicah, če pa je potencialna razlastitev le še ene ameriške volitve proč? ZDA s svojo agresivnostjo pospešeno izpodkopavajo položaj dolarja.
We note a lot of gloating from some US academics, who are telling us that, no, the global role of the dollar is not falling. And, no, there is no de-globalisation. The gloat is about comments from the Brazilian president, Luiz Inácio Lula da Silva, who said
“Why should every country have to be tied to the dollar for trade?… Who decided the dollar would be the (world’s) currency?”
Most of this gloating comes in the form of the straw man variety of arguments: China is running massive current account surpluses, which force them to invest their surplus in a foreign currency. Our all-time favourite is the assertion that there is no evidence of de-globalisation in the trade data. This falls into the category of Berlusconi economics. There can be no recession because the restaurants are full.
We understand the reasons why the dollar has emerged as the world’s largest currency. We also understand that this has nothing to do with the denomination of prices. Even if the oil industry were to start using the euro as the denominator, it would not make a difference. Lula has got that part wrong. But he still has a point.
The dollar has climbed to its position because the Europeans did not challenge it on purpose, and because the Chinese growth model, in its early phase, was critically dependent on large savings surpluses. Neither of these factors is likely to persist. There is big geostrategic shift happening in the world that allows the former Brics economies – China, India, Brazil, South Africa and Russia – to decouple from the west. A large part of the reason why this is viable now is based on the scarcity of some raw materials that are becoming increasingly important, like rare earths. And on the fact that China in particular has invested in production capacity in other parts of Asia, Africa and Latin America, much more so in recent years that than the US.
There is an awful lot of lazy thinking going on, by US economists and their uncritical fan club in the English-speaking media, that large current account deficits are a precondition for a currency to dominate. This argument falls into the same category as Lula’s crude statement: it is not quite right, but not completely wrong either. It is the converse that is true: you cannot be a Mercantilist, like China was, and have a dominant currency at the same time. But that only explains what happened in the past. As China is investing its investment from US treasuries to things like Chilean lithium mines, or German robotic companies, in other words from bonds to equity, the argument no longer holds. If the world splits into the west and the rest, it is perfectly viable for the rest to have its own dominating currency. Or for the euro to become the dominating currency for as long as Europeans act independently of the US, which is not the case now.
We noted with some interest that Stanley Druckenmiller, one of the most successful US hedge fund investors, is citing the weaponisation of the US dollar as one of the reasons why he is shorting the US currency. Druckenmiller even cited Lula’s comment. We see it in exactly the same way: the more you weaponise the currency through financial sanctions, the more likely you are to lose the status of the world’s currency. Which foreign sovereign wealth fund, outside of Nato, would still want to hold a large proportion of the wealth in US treasuries if expropriation is only one US election away? One foreseeably dangerous moment to watch out would be how the US reacts to a Chinese invasion of Taiwan. The US could repeat what it did with Russia and freeze the Chinese dollar reserves: some $3tn. You may call it a proportionate response. We call it a default. Do you believe that people will want to trade in dollars if and when that happens?