Economist and NYU professor Nouriel Roubini has predicted that strategic rivals of the US will build an alternative monetary system that does not rely on the USD. According to Roubini, China, and Russia are teaming up with their allies to create a “bipolar” global reserve currency system.
Roubini believes that China, with its $1 trillion in reserves, will push for the RMB to become an alternative to the US dollar. However, he cautioned that the shift will not happen overnight and will lead to slower global growth and more expensive production costs.
The economist further pointed out that the current crisis in the US banking system is far from over and that the worst in terms of severe banking stress is yet to come. He also noted that the credit crunch will significantly reduce economic growth and could push the US into a recession later this year.
Roubini’s warning highlights the growing concern among economists and financial experts that the US dollar’s dominance as the world’s reserve currency is coming to an end. The move away from the dollar by strategic rivals could lead to a significant shift in the global economic order, with major implications for trade, finance, and geopolitics.
As the US-China rivalry intensifies, other countries may be forced to choose sides and align themselves with one or the other. This could lead to the formation of new economic blocs and the fragmentation of the global financial system.
