• Economists told the Daily Caller News Foundation that the policies of President Joe Biden’s administration are undermining the strength of the US dollar and jeopardizing US global influence.
• Economists expressed concern about the possible impact of Mr. Biden’s policies and highlighted the threat to the US dollar’s status as a global reserve currency.
• Heritage Foundation economist EJ Antoni told the DCNF, “Losing reserve currency status would mean a 70-year deficit pouring into the United States, all of which would be lost to the existing dollar held domestically. You will be competing to buy goods and services,” he told the DCNF. “It’s a hyperinflation scenario. It also means we can’t export inflation overseas, so we’ll bear all the costs of future inflation ourselves.”

Economists interviewed by the Daily Caller News Foundation say the policies of the Joe Biden administration are weakening the US dollar and threatening America’s global influence.

Economists told the DCNF about the potential impact of Mr. Biden’s policies and expressed serious concern that the US dollar’s status as a global reserve currency is in jeopardy. The result could be hyperinflation, spending cuts, and other serious consequences for other countries. Economists agree that actions taken by the Biden administration and the Federal Reserve have contributed to the weaker dollar, but disagree about the extent of the risk.

Heritage Foundation economist E.J. Antoni told the DCNF, “The Biden administration has taken so many actions to dethrone the Dollar King that it’s hard to rank them all on their destructive power. It will be difficult,” he said.

As a reserve currency, the US dollar is involved in most businesses on the planet. International trade is usually done in dollars.

“Losing reserve currency status … means that 70 years of deficits will flow into the United States, competing with existing dollars held domestically to buy goods and services,” Antoni said at the DCNF. told to “It’s a hyperinflation scenario. It also means we can’t export inflation overseas, so we’ll bear all the costs of future inflation ourselves.”

Economists particularly criticized the Biden administration’s sanctions against Russia as punishment for its aggression against Ukraine. The US seized the assets of the Central Bank of Russia, restrict In February 2022, Russian banks will join from the global financial messaging system, the Society for World Interbank Financial Telecommunications (SWIFT).

The United States and its allies have seized $300 billion worth of foreign currency assets held by Russia’s central bank that had been frozen by sanctions. according to to Reuters. A significant portion of the seized assets are now in the Federal Reserve Bank of New York, still owned by Russia.

Heritage Foundation economist Peter St. Onge told the DCNF that seizing the Russian Central Bank’s dollar reserves was “Biden’s single biggest mistake.” “This warned dozens of countries that if the United States doesn’t like your policies, it will collapse their economies and confiscate their dollars. In other words, the dollar now carries its own risks. .”

Furthermore, excluding Russian banks from SWIFT “sends a signal to countries that are not politically aligned with the United States that we are prepared to use the dollar as a political weapon, so they hold the US dollar.” became reluctant to do so,” said Dr. Thomas Hogan, a senior researcher in Russia. The American Institute of Economic Research (AIER) told DCNF.

Treasury Secretary Janet Yellen has praised the sanctions, saying they are effective in preventing Russia from destroying Europe without harming the United States, saying, “Our actions taken in concert with our partners and allies are a testament to Russia’s “It would undermine our ability to project power and threaten the peace and stability of Europe.”Mr. Yellen Said at the time. “We are united in our efforts to hold Russia accountable for the further aggression against Ukraine while reducing the impact on the American people and our partners.”

AIER economist Peter Earl told the DCNF that these sanctions against Russia have prompted countries to come up with alternative currencies to the US dollar.

According to NPR, China, Russia, Saudi Arabia, the United Arab Emirates and Brazil will start trading in Chinese yuan and Russian rubles instead of US dollars in 2023.

“No country wants to suddenly be unable to participate in international trade if there is a conflict or a falling out with Washington, DC,” Earl explained.

In addition, Russian state media report Brazil, Russia, India, China and South Africa (BRICS) are all set to announce gold-backed currencies soon.

“Gold-backed currencies pose a real threat to all fiat currencies, including the dollar,” Antoni told the DCNF. (Related: EJ Antoni: US Dollar Falls and Falls)

Janet Yellen says US dollar’s reserve currency status is not threatened by other currencies, including BRICS

Nearly 90% of international trade is in dollars, he said, and he doesn’t think that will change.pic.twitter.com/jKXQcOCqYc

— Crypto Tea (@CryptoTea_) July 10, 2023

“Our real source of power is the dollar,” Peter Schiff, chief economist and global strategist at Euro Pacific Capital, told DCNF. “If the dollar weren’t the reserve currency, government spending would have to be cut.”

Inflation is another reason for the dollar’s depreciation, with economists blaming the policies of Mr. Biden and the Federal Reserve. The consumer price index (CPI), which comprehensively indicates the prices of daily necessities such as energy and food, rose 3.0% annually in June. according to to the Bureau of Labor Statistics.

“Trillions of dollars spent, borrowed and printed by the Biden administration have resulted in the highest inflation in 40 years,” Antoni told the DCNF. “Such devaluations of the dollar have over time undermined foreigners’ confidence in currency stability.”

But Hogan told the DCNF that “the strength of the US dollar really depends on the monetary policy of the US Federal Reserve…the Fed creates inflation.”

“I don’t think inflation is Biden’s fault,” Hogan added. “As far as inflation goes, I don’t think it’s the Biden administration’s fault, it’s entirely the Fed officials’ fault.”

Hogan was even more optimistic. The dollar’s dominance has declined in recent years, but to a lesser extent. There are no other strong candidates for widespread use in international exchange. ”

“I would like the United States to have a more stable currency (less inflation), a stronger economy (less regulation), and a more credible government, but still the United States is on those margins. Better than almost every other country in the world,” Hogan added. “Unless China and Russia suddenly have free markets, strong property rights and stable currencies, they will not pose a serious threat to US dollar dominance.”

Earle was also optimistic about the dollar’s future as a reserve currency. “The likelihood of the dollar being kicked out of the global reserve currency position is extremely low, and it will take decades,” he told the DCNF.

Antoni disagreed. “It’s hard to overstate how tragic this is and how quickly it’s happening,” he said.

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