Former Lehman Brothers executive Lawrence McDonald has said in an interview that although the US dollar is riding high at the present moment, it may very well soon lose its coveted status as the world’s reserve currency.
In the interview published Thursday with the Russian news agency Sputnik, McDonald said, “It’s definitely going to happen. It’s not a near term problem, maybe 20 to 30 years because the US has so much wealth, we’ve got a lot of military power, but there’s no question. The peak dollar best years are right about here.”
McDonald, who served as the vice president of distress debt and convertible securities trading at Lehman Brothers, noted that the dollar’s dominance will be harmed mightily by the recent attempt to weaponize the Swift banking system to deny financial services to Russia, which pushed many banks to other substitutes.
He went on, “The sanctions-SWIFT game should be used by the West once every 10 years, but they’ve been using this against multiple countries. Sanctions against Russia in a war, okay, that’s fine. From a US perspective the problem is you’ve hit 10 different countries over the head with the sanctions card, so you’re forcing these countries to form a bloc against you. That’s what’s happening.”
He continued to say that he believes within two years, the dollar will be worth much less, as other nations will have adapted ways around the Swift system.
One week ago, China’s Charge d’Affaires to Russia noted the global de-dollarization has been sped up by the recent formation of payment systems using national currencies which Russia has been pioneering with trading partners.
Last week, Russian President Vladimir Putin said that in his opinion the US has “discredited” its own currency by attempting to weaponize it to deny trade to other nations. He went on to say the global status of the US dollar as the global reserve currency is under threat because of it now, as other nations begin to perform settlements in national currencies and that gradually becomes the dominant means of settlement across the globe.
