Why This Crisis Will Strengthen the Dominance of the Dollar as World’s #1 Currency

Contents

The dollar will strengthen amid the crisis, but the main victory for bitcoin
CONTENT

  • Dollar could further increase its influence during the coming financial crisis.

  • The collapse of the global financial system will lead to a fight for dollars and a depreciation of gold.

  • Many believe Bitcoin or another decentralized monetary system could be the solution.

International consortium of news organizations, developing transparency standards.

World faces humanitarian crisis as COVID-19 isolates entire countries.

The dollar will strengthen amid the crisis ...

However, the more severe impact of the virus appears to be provoking a potential recession that is closing markets around the world..

All assets, including stocks, oil and gold – and, of course, bitcoin – were hit hard and the global financial system stopped working. Therefore, many are wondering what the future holds for the markets, especially in the short term. However, some suggest that the US dollar may well increase its influence during this financial crisis..

But if the dollar really does become the “destructive force” that macroinvestor Raul Pal speaks of, then it is unlikely to have long-term success..

The dollar will strengthen amid the crisis ...

Pal believes there is a need to shape a new financial order and perhaps the COVID-19 outbreak could be the catalyst for a decentralized cryptocurrency financial system..

The demand for the dollar is growing

While the Federal Reserve is pumping billions of new dollars into the American economy, there are speculations that a deficit caused by the impending financial crisis is inevitable..

The dollar will strengthen amid the crisis ...

Usually, when markets are up, stocks and other assets strengthen, but now they are numb.

According to Pal, the collapse of the global financial system will lead to a fight for dollars and depreciation of gold. The speculation about a possible collapse of gold in this scenario looks very real – and it is already happening – since when the dollar rises, gold usually falls.

shuts down.

There is no funding mechanism to alleviate it.

I don’t think swap lines are going to work. There is no way to create the $ 15trn needed offshore and also provide for the dollar shortage onshore in the US.

– Raoul Pal (@RaoulGMI) March 18, 2020

New financial order

However, the strengthening of the dollar during this financial crisis and in the period preceding it is unlikely to last long. In fact, this financial crisis is likely to heighten the need to change the existing order, which central banks have been pushing for for some time..

At the end of all of this, we will need to create a new system from scratch. The global central banks have been telling us this for a long time now.

It will take time to play out and central bank balance sheets are going to explode to levels never imagined.

– Raoul Pal (@RaoulGMI) March 18, 2020

Many believe that Bitcoin or some other decentralized digital monetary system can be the answer in this situation..

In the long term, having such a decentralized system could help solve the problems associated with recessions and depressions in the future..

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