Donald Trump: China’s Yuan Will Likely Displace U.S. Dollar as the Number One Currency
Former US President Donald Trump has expressed his concerns about the state of the US dollar and believes that the Chinese yuan could potentially replace it as the world’s top currency. In a recent statement on his social media platform, Truth, Trump said that this catastrophe would “probably” happen during Biden’s presidency and that it would be the “biggest defeat” in the history of America, happening quickly.
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However, it is worth noting that several nations are currently moving away from the US dollar, such as the Malaysian Prime Minister, who recently asserted that there is no reason to continue to depend on it. The Chinese yuan has already surpassed the dollar as the most traded currency in Russia, and even the ASEAN nations are considering dropping it for settlements.
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Trump’s concerns are not unfounded, as three congressmen recently introduced a “Gold Standard” bill to re-peg the currency to a fixed weight of gold bullion, protesting against Washington’s “irresponsible spending habits” and the “creation of money out of thin air”. This would help the US dollar regain a stronger hold.
However, the wider community seems to disagree with Trump’s opinion. Fluent in Finance points out that the yuan only accounts for just over 2% of global reserves, while the US dollar accounts for around 60% of all foreign exchange reserves. This suggests that the yuan is not yet ready to displace the US dollar as the world’s leading reserve currency.
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The recent decline in the value of the US dollar may be traced back to multiple factors, such as the slowdown in US manufacturing activity last month, renewed inflationary fears due to OPEC’s unexpected output drop, other macroeconomic challenges, and geopolitical tensions.
In conclusion, the US dollar’s future may seem uncertain, but it remains the reserve currency most countries have on hand, and the yuan has a long way to go before it can compete internationally due to political and economic factors. Trump’s worries about the dollar’s value are warranted, but whether or not the yuan will overtake the dollar as the world’s reserve currency remains an open question.