This is exactly right. People love to claim that we can print unlimited money because we are the reserve currency, yet the entire underlying collateral of the international trade system that preserves this is international us treasury repo markets (eurodollars), which becomes totally untenable as that becomes a negative carry position with real negative yields.
The further we go down that line, the more attractive dedollarization becomes.
And go where? European central bank assets are at 53.1% of GDP, Bank of Japan assets are at 125.7% of GDP, and the US FED is at 34.4% of GDP [0]. But hey, you could go with the chinese yuan, they "only have a 36% assets to GDP ratio" if you trust them.
This is correct but it is not the whole picture. If all the existing options that look like the previous setup are bad, you might find that whatever setup we move to, does not look like the old setup.
There is no law of physics that there has to be one underlying global reserve fiat currency. That is basically a historical oddity that was a result of our huge creditor position vs Britain at the end of WW2.
Going forward look for a basket of currencies, which could include gold, and potentially even crypto. Of course this is speculation.
That's been the story for a while, right? It was the reserve currency. Where else are you going to go? And what I'm saying is that I think you'll see in the coming year or two how it plays out.
I personally see it being a slow death that drags out over a decade, not a big sudden event that happens in the next two years but I agree with your premise.
