Discussing the Future of the U.S. Dollar and Its Place as the Reserve Currency
April 11, 2023
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this week. My name is Jake Sanders, and I am a partner at Wealth E&P and operate as a Wealth Advisor and Certified Financial Planner.
I’ve been getting a lot of questions about the U.S. dollar, and surprisingly not about inflation or interest rates. In particular, I’ve been asked if the U.S. dollar will lose its current status as the reserve currency of the world. In short, I would say no, not at least in our lifetimes. A lot of times, these questions are usually followed up by referencing an article or something they’ve seen on the news about China, Russia, or Saudi Arabia. No doubt, these countries have been less than coy about their desires and attempts to supplant the U.S. dollar and its status in the world.
Regarding China, Russia, and Saudi Arabia specifically, I would say that they are not free; these countries do not have free markets. I would emphatically say that the rest of the world is not going to trust the reserve currency status to a communistic or dictatorial type of government. Now that being said, excess spending and printing of money, along with expansion of government that I believe is too rapid, have certainly caused the dollar status in the world to diminish over time.
Is the U.S. dollar doomed? Will our children be spending a different currency than we are now? Ultimately, time will tell, but I for one do think we have time to get our fiscal and economic houses in order.
If not, regardless of which way it might go, our team at Wealth E&P would love to chat with you about how we’d approach this. If you have any other questions about the stock market or the economy in general, please feel free to reach out or visit www.wealthep.com. Otherwise, stay tuned for our next Market Minute and our Economic Update Dinner recording! We appreciate you, and we hope you all have a great week.
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