Much of what is currently happening right in front of our eyes provide evidence of an unfolding sea change in the global monetary order. As the US Fed turns from monetary easing to monetary tightening, with uncertain outcomes for the global economy, investors’ trust in currencies issued by central banks is eroding. Blockchain technology has enabled a much-hyped boom in cryptocurrencies as investors seek alternatives to the US dollar, once perceived as an invulnerable safe haven. These shifting tides in the monetary system are coming to pass in different ways, at different velocities, and at different levels of visibility. On the cusp of fundamental change, it is particularly important not to lose sight of the forest for the trees.
The global economic order was and is undoubtedly dominated by the US. The US produces the world’s largest economic output, enjoys far-reaching diplomatic clout, and is an uncontested military hegemon, all of which testifies to its global dominance. On the currency front, the global balance of power is embodied in the long-standing US dollar-centric global currency architecture, which critical observers have warily referred to as an “exorbitant privilege
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Courtesy of In Gold We Trust