The US dollar is threatened with losing its dominance in international trade. The question has been agitating American public opinion for several weeks. Some are more aware of the risk than others. If it were to materialize, the whole world economic system would collapse.
Default of payment: main threat for the American dollar
A few days ago, some rejected the idea of a loss of influence of the American dollar. Now, this possibility seems to convince others. This is the case of former US Secretary of State Hillary Clinton.
The latter obviously did not miss the opportunity to speak out on this issue of national interest to the United States. According to her, the risk is very present. The dollar’s reserve currency status could be compromised.
And the fault is not to be sought outside the United States as some may have thought recently. If the US currency is in danger of losing its influence in international transactions, it is mainly due to the country’s payment default.
“If Congress continues to flirt with default, calls to dethrone the dollar as the world’s reserve currency will grow louder”underlined the former Democratic presidential candidate of 2016.
Default of payment: a threat to the global financial system?
Hillary Clinton’s analysis goes beyond the simple framework of national issues. The situation of the American currency could, according to her, mutate into a more global problem, threatening international financial stability.
Thus, the fact that the United States defaulted on its debt would not only impact the American dollar. It could eventually cause a planetary financial wreck. The reason: a loss of trust from individuals, businesses and governments around the world.
For now, these “have confidence that America pays its debts, upholds the rule of law and guarantees stability.” But one thing is obvious for Hillary Clinton. It is that as the United States defaults on its debts, the States of the world will work to cover themselves.
In this context, the former Secretary of State warns: “The debt ceiling debate is not about authorizing new spending. It is for Congress to pay the debts it has already contracted. Refusing to pay would be tantamount to not paying off your mortgage, but with global consequences”. The BRICS countries have understood this and are preparing for it.
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