I can't pretend to be an expert on this. But it's what they call fiat currency. It's not tied to gold standard.
The future of the US dollar looks murky at best, based on a lot of what I'm reading and listening to.
Nouriel Robini is known as Dr. Doom. Listen to this podcast and you'll likely leave in tears (if you think Republicans are talking down the economy - listen to this guy). In May 2020 he called the inflation we are seeing now though. He saw it. This guy knows his stuff. Here's a portion of the podcast where he's asked about the dollar and its reserve currency status:
Tracy: (31:19)
Yeah, I remember talking to you about it earlier in the year, this idea of a sort of tokenized dollar that's more tied to hard assets. You know, this is also something we've discussed many times on the podcast at this point. The idea of the dollar losing its reserve currency status. And one of the things about that is people have been talking about it for a long time and it hasn't yet happened. What in your opinion makes this time different?
Nouriel: (31:47)
Several things. Of course it's not going to happen overnight. The decline of reserve currency status takes many years. But there are at least two factors. One is that the US has very large current account of fiscal deficits. There are fiscal deficits in other advanced economies, but they tend to run current accounts surpluses or a balance while we have a twin deficits. And historically every time they had twin deficits and the dollar was too strong, you have a cycle of dollar going up and then has to go down in order to restore the external competitiveness. And the fall of the dollar can be 30 to 40% on a weighted basis. So that's going to be something that is going to happen, especially as the Fed is going to wimp out while other central banks will have to start to tighten.
Secondly, I think that the big revolution right now is that a regime change, is that we have weaponized the US dollar for national security and foreign policy purposes and that might be the right thing to do. We have to punish our enemies. Whether it’s Russia, North Korea, Iran, or even China with trade and financial sanctions, because there is a geopolitical rivalry, it's going to get worse. But they know right now, even the Chinese, that their dollars can be seized like they were seized in North Korea, in Iran, and now in Russia. And not just the dollar, also the yen, the euro, the pound, the Swiss dranc. So if you need another reserve currency, that is a reserve currency or asset. It’s not dollar euro, yen, pound and Swiss franc. Which one is the only one out there that is going to be an alternative that cannot be seized by the US or Europe or Japan?
Joe: (33:25)
Bitcoin.
Nouriel: (33:27)
It’s gold.
Joe: (33:28)
Oh.
Nouriel: (33:28)
It's gold, but gold not in the vault in New York, New York Fed or London, but gold in your own vault or caves in Russia or China, wherever you have it. So I think that that's going to be what's going to lead to a sharp fall of the value of the dollar, the strategic [inaudible] of the US have a plan to completely phase out their exposure to dollar assets. And that's going to be a regime change for the long run as opposed to doing a short-term factor. It's going to happen.
Joe: (33:54)
I really thought we might hear Nouriel make the case for Bitcoin there, but I have basically just one last question…
Nouriel: (34:01)
Bitcoin is another sh*tcoin. There's no fundamental value.
Joe: (34:04)
We'll break that out to a separate story.
Nouriel: (34:07)
It’s going to be gold, there's going to be TIPs. It's not going to be Bitcoin, frankly.
Nouriel Roubini Predicts a Crisis 'Worse' Than the 1970s
Dr. Doom lives up to his moniker.
https://podcasts.apple.com/us/podca...e-than-the-1970s/id1056200096?i=1000583274967
