The billionaire CEO of the world is concerned about the decline of the US dollar’s sway, which he attributes to the foreign policy of the Biden administration.
Elon Musk has developed into a sort of watchdog over the activities of the American government abroad.
The tech mogul gained political clout by giving Starlink to Ukraine during the conflict with Russia. Musk’s rocket company SpaceX created the independent satellite internet service known as Starlink. This service enables both Ukrainian civilians and the Ukrainian Armed Forces to maintain secure communications on the front lines.
Is the U.S. Dollar Losing Its Reserve Currency Status?
As a result, the sanctions against Russia have been tightened by Washington and its allies in Europe. However, the lack of a plan for ending the Russian war has sparked discussion about American support for Ukraine through NATO. The Biden administration is criticized for taking a tough stance against the Kremlin.
Musk and his friends, who think that the lack of a peaceful way to end the Russia-Ukraine conflict has dealt American diplomacy and the United States’ standing in the world a serious blow, are the ones who are fueling this debate.
Genevieve Roch-Decter, CFA, a former small-cap money manager, stated on Twitter on March 29 that “the US dollar is losing its reserve currency status,” adding in a subsequent tweet that the US Dollar has been the backbone of the global economy for decades. Several countries even use the US Dollar as an official currency, including El Salvador, Panama, and Ecuador.
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Russia and Saudi Arabia
The billionaire CEO of the world is concerned about the decline of the dollar’s sway, which he attributes to the foreign policy of the Biden administration.The dollar is regarded as the central banks’ reserve currency. This indicates that different national central banks hold their foreign currency reserves primarily in U.S. dollars.
This frees up the United States from keeping foreign exchange reserves in other nations’ currencies and, in particular, makes it possible to finance the balance of payments deficit.
Since the end of World War II, the dollar has held this status, which represents the US’s dominance on the international stage.
About 60% of the foreign exchange reserves held by central banks worldwide are held in US dollars. Dollars are used in almost half of all international trade, loans, and debt securities.
However, some experts claim that the sanctions imposed on Russia as a result of the conflict with Ukraine have aided in the promotion of initiatives to de-dollarize international trade.
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