Source: Axel Merk, Merk Investments
The end of U.S. dollar dominance may be unfolding in front of our eyes. No, we don’t think China’s ascent is the key threat; instead, key to understanding the U.S. dollar may be to understand the money market fund you might hold. Let me explain what’s unfolding in front of our eyes, and what it might mean for the U.S. dollar and global markets.
Typically, when we think about potential threats to the dollar, we think a different reserve currency might take over; or that foreigners might dump their dollar holdings. I will touch on these, but then dive into what may be a much bigger elephant in the room. Bear with me.
Foreigners holding U.S. debt
Yes, foreigners hold trillions in U.S. debt, and if they were to dump all their debt, borrowing cost in the U.S. might rise. Except it hasn’t happened: in…
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