(Kitco News, Wed. Sep. 8th, 2021– The withdrawal of U.S. troops from Afghanistan has left a power void in the region, with some analysts saying that weaker American presence overseas could signal a threat to the U.S. dollar as a global reserve currency.
Michael Lee, founder of Michael Lee Strategy, told Michelle Makori, editor-in-chief of Kitco News, that sooner or later the U.S. dollar would need to be replaced regardless of what happens in the Middle East, although there is no imminent threat to the dollar’s reserve currency status yet.
“I would say that you need something to replace the dollar, and if you think things would be bad for the U.S. if we lost our reserve currency status, think about how bad it would be for the rest of the world. So, unless there’s a real global superpower that’s an economic powerhouse the likes that has never been seen before on the face of the Earth, you’re talking about massive global total depression. At some point that will happen. I do not see that happening in my lifetime,” he said.
Lee noted that while China is a competing economic power with near peer status to the U.S., the Chinese currency, the Yuan, is still nowhere as ubiquitous as the dollar when it comes to global trade.
The military withdrawal from Afghanistan is only going to escalate geopolitical tensions with China going forward, Lee added.
“The geopolitical risk as a result of the way we withdrew from Afghanistan is exponentially higher than it was just a month ago. I think China is absolutely emboldened. I do not think any of that geopolitical risk is priced in the market,” he said.
Posted by :
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com
