Breaking Down De-Dollarization: Lyn Alden’s Expert Analysis
Macro expert Lyn Alden identifies two significant factors fueling the de-dollarization surge.
In an interview on The Jay Martin Show, Alden explains that diminishing trust in U.S. government bonds among other nations is a key driver. The macro specialist points out that the yields offered by U.S. treasuries are lower than inflation, prompting many countries to seek alternative investment options.
Over the past year, de-dollarization has experienced notable acceleration, primarily due to two fundamental reasons. Firstly, after the global financial crisis and subsequent years, numerous countries concluded that investing in U.S. treasuries is unappealing.
They are unwilling to finance the U.S. government when faced with negative real yields. Throughout the 2010s, T-bills consistently yielded less than inflation, while longer-duration treasuries closely matched the consumer price index. These assets underperformed compared to equities, real estate, and other alternatives. Consequently, many governments have chosen not to support such investments.
Alden further emphasizes that countries are shifting away from the dollar due to concerns that the U.S. government could seize their reserves at any given moment. According to Alden, these nations understand that the fate of their dollar reserves lies in the hands of a select few politicians in Washington.
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The treasury and dollar market function as a permissioned ledger, which means individuals can be denied access to it. Assets can be unilaterally confiscated, albeit not arbitrarily. Over the past 50 years, most countries worldwide have experienced periods where they fell out of favor with Washington in one way or another.
Consequently, many nations are considering reducing their reliance on the dollar and treasuries as they realize that a small group of individuals in D.C. holds the power to freeze their funds with a mere gesture.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
