Two of the world’s biggest economies have the potential to dislodge the US dollar’s world reserve currency status, according to the former chairman of Goldman Sachs Asset Management.
In a new interview with the Russian government-funded RT, Lord Jim O’Neill says chances are slim that the US can hold on to its USD hegemony permanently.
“Eventually, as we saw in the United Kingdom, the world’s most actively used currency will ultimately be that of that world’s most important economies. So the idea that the dollar will remain king forever is probably unlikely.”
O’Neill says that he has no idea on the timing of when the dollar could be dethroned, and notes that conversations about the greenback’s defeat have come and gone for decades.
O’Neill originally coined the term BRIC, the acronym for the economic coalition of Brazil, Russia, Iran, China. Now, with the addition of South Africa, BRICS represents an attempt to circumvent US financial hegemony, something O’Neill says is possible if China and India manage to coordinate agendas.
“This is not the first time that people have talked about the end of the dollar, but it happens every other year, if not with the same intensity, and it’s never happened yet. If you look at the history of the pound sterling and its domination of the world financial markets, it persisted well beyond when the UK economy became much smaller as a share of global GDP…
At some point the dollar will lose its dominance status. I do think that if China and India could strongly agree on things as the two biggest countries in the emerging world and the only two with more than a billion people each, then that would probably hasten the end of the dollar’s dominance …”
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