The dollar's chokehold on finance

GREENBACK STRENGTH - THE DOLLAR INDEX COULD CERTAINLY BOUNCE BACK FROM THE CURRENT LEVEL, BUT IT WOULD NEED TO PICK UP A REAL HEAD OF STEAM TO GET TO THE HIGHS IT REACHED SOME MONTHS EARLIER

- JAMAL MECKLAI

AS THE CASE is every few years, there is once again increasing long-awaited talk of the demise of the dollar in terms of its influence in the world.

With the United States national debt rapidly approaching $32 trillion (about a third of global gross domestic product) and expected to explode in the next two decades, the argument goes that at some point, nobody would want to buy US government debt, particularly as it is backed only by the "full faith of the US government" and not any hard assets; in other words, if the US were to default on its debt, holders of Treasuries have no right to collect anything. (And given that Donald Trump is rearing his head again, a year before presidential elections are due, the "full faith of the USgovernment" today is an increasingly bad joke.) This explains why, from time to time, there are waves of belief that the dollar will collapse upon itself-either replaced with a single contender competing with the dollar (in the early 2000s, the Euro; more recently,preCovid, the yuan); or that gold will come back as a medium of exchange; or that cryptocurrencies, which, theoretically at least, are not dependent on any government's credibility, will control the financial world.