Ron Paul, a former U.S. politician and Libertarian Party member, has recently addressed the issue of the U.S. dollar’s diminishing influence in the international market. According to Paul, even if this does happen, it probably won’t be as fast as some predictions have suggested.
Ron Paul Examines Decline of US Dollar Hegemony
Ron Paul, the former U.S. congressman, has recently appeared in his webcast “The Ron Paul Liberty Report” to discuss the position of the U.S. dollar as a reserve currency and the impact of recent events in countries such as China, Russia, Brazil, and other nations in this regard.
Paul believes that if the U.S. dollar is eventually dethroned as a reserve currency, it will be a slower process than some have predicted. He stated:
People have been talking about this for a long time, and it’s amazing, it’s always longer than some predictions. Somebody could have said in 1930 that the dollar standard is not going to last long with the Fed taking over. Predicting the exact time is very difficult.
He also highlighted the different phases that the U.S. dollar has gone through, with special emphasis on the abandonment of the Bretton Woods system by former president Richard Nixon, who, as Paul pointed out, was already being criticized for allowing the dollar to become an inflationary currency that had no backing.
Consequences of a World Reserve Currency
The former congressman argued that while having a national currency as a world reserve currency had its advantages for the U.S., it also had some drawbacks. Paul commented:
It gives us a license to inflate. It gives us sanctions to interfere in the market with sanctions. License to fight wars we shouldn’t fight.
According to Paul, the decline of the dollar began with the creation of the Federal Reserve, which has the power to influence the monetary policy of the country without congressional approval. Nonetheless, he believes that the current events involving nations seeking to replace the dollar as a trade currency are a sign of an accelerated process.
There are signs that something big is happening, and it has to do with China, Brazil, and Russia. They are ganging up on us. If they are succesful, people will find a scapegoat, but it is not true. We have to look at our monetary policy in a much more honest way.
What do you think about Ron Paul’s opinion on the U.S. dollar’s future? Let us know in the comment section below.
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