Economist Nouriel Roubini Predicts Major Shift in Global Currency Landscape
According to NYU economist Nouriel Roubini, strategic competitors of the US, such as China, Russia, Iran, Korea, Pakistan, and their allies, are interested in creating a new monetary system as an alternative to the US dollar.
This is because they are worried about potential sanctions imposed by the US and Europe.
Roubini believes that China may propose the RMB as an alternative to the US dollar, leading to a shift from a unipolar to a bipolar global reserve currency system.
However, this process will not happen immediately, negatively impacting global growth and production costs. Roubini warns that the US banking crisis is not over and predicts that a recession will likely occur later this year.
Roubini’s full interviews with Yahoo Finance and CNBC-TV18 can be found here and here, respectively.
Roubini argues that the US-China cold war is getting colder, and this situation is exacerbating the trend toward an alternative global reserve currency system.
He suggests that this change will increase the cost of financing for the US when the country already has very high public and private debt ratios.
Additionally, Roubini predicts that the credit crunch resulting from the US banking crisis will significantly reduce economic growth and lead the US economy into a recession later this year.