De-dollarisation is happening, so why has the monetary system not collapsed yet? - Fat Tail Daily
De-dollarisation is happening, so why has the monetary system not collapsed yet? - Fat Tail Daily
Source: Fat Tail Daily
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DW NOTE
The dollar's share of global reserves dropped from 72% in 2000 to 58% today, yet Treasury yields remain stable and dollar funding markets still set the global cost of capital. De-dollarisation advocates mistake long-run portfolio diversification for systemic collapse — China and Russia have been vocal sellers, but Japan, the Gulf states, and European central banks continue rolling their holdings. The monetary system hasn't collapsed because no alternative exists: the euro zone remains fiscally fragmented, the renminbi inconvertible, and gold pays no yield. Incremental reserve shifts are real, but the infrastructure of dollar clearing, sovereign debt issuance in dollars, and commodity invoicing in dollars remains untouched.