Former Federal Reserve official: US Dollar in question due to future of globalized economy

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Economist Zoltan Pozdar Warns of End of the Current US Dollar Dominance
  • Back in May 2022, Former Federal Reserve and U.S. Treasury Department official, Zoltan Pozsar, suggested that the current dominance of the US dollar is in question due to future conditions of the globalized economy.
  • Zoltan warned that of particular interest is the rise of China, the conflict in Ukraine and the subsequent sanctions, and the rise of cryptocurrency.
  • Credit Suisse’s Zoltan Pozsar argues Bretton Woods II crumbled when the G7 countries seized Russia’s foreign exchange reserves. Keeping money inside financial institutions like the IMF was considered risk free. That is clearly no longer the case. Similarly, Bretton Woods I collapsed when Nixon took the US of the gold standard back in 1971 when dollars were convertible to gold at a fixed exchange rate of $35 an ounce. This led to Bretton Woods II, backed by “inside money” or the dollar, which itself is not linked to gold or any other commodity.
  • Now the basis of this system, which has operated for the past 50 years, is being called into question. The sanctions on Russia, which showed that reserves accumulated by central banks can simply be taken away, raised the question of “what is money?”
  • That question may explain why Pozsar believes a huge shift in the way the world organizes money and reserves is now underway, “creating a “Bretton Woods III backed by outside money,” (gold and other commodities). Including crude oil and bitcoin.

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