FameEX Hot Topics | Ex-Treasury Official Cautionary of Total Economic Collapse in Case of US Dollar Losing Reserve Currency Status

Monica Crowley, former Assistant Secretary for Public Affairs for the U.S. Department of the Treasury, recently warned of the potentially catastrophic consequences if the US dollar were to lose its global reserve currency status. Speaking on Fox News, Crowley explained that the US dollar has been considered a safe haven since the end of World War II, and has been backed by the strength and economic power of the US since being taken off the gold standard by President Nixon 50 years ago.

However, if emerging economies were to move away from the US dollar and towards the Chinese yuan, it could spell disaster for the US economy. Crowley emphasized that the abandonment of the US dollar would be catastrophic and that it is difficult to overstate just how severe the consequences would be. One key factor is the fact that oil has always been traded in dollars. If this were to change, it would mean the end of the US dollar. Crowley stressed that the US dollar's reserve currency status has been a real privilege, but that the US has abused this privilege through reckless monetary and fiscal policies in recent years. This has led to the devaluation of the US dollar.

The potential consequences of losing reserve currency status include a significant devaluation of the US dollar, a sharp rise in interest rates, and a drop in the value of US bonds. This would have a severe impact on the US economy and could lead to a global economic crisis. Furthermore, if the US dollar were to lose its reserve currency status, it would also have political implications. The US has long been seen as a global superpower, and the dominance of the US dollar has been a key factor in maintaining this status. Losing reserve currency status would be a blow to the US's prestige and could have long-lasting effects on its influence in global affairs.

In conclusion, Crowley's warning highlights the importance of the US dollar's reserve currency status and the potential consequences if it were to be lost. The US must take measures to address its reckless monetary and fiscal policies in order to maintain its status as a global economic power.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.