re: Stanley Druckenmiller says the Fed is endangering the dollar’s global reserve status

quote:

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Here is the kicker that the Fed also knows. What does it get replaced with?

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Here’s something I’ve considered in recent times: what if the replacement isn’t another global reserve currency?

What if the system splinters into several regional reserve currencies between the largest local trading partners?

I could see a few countries attempting to step up and manage their own closed, regional systems given the opportunity. France has already essentially done it in West Africa. The U.S. could remain the center of NAFTA + Britain. If Argentina would get their shite together they are the logical choice for the Southern Cone of South America. Turkey in the Middle East. East and SE Asia and Europe are much harder to pick a winning horse in. Some countries have the size and demographic breadth/depth but lack stability (ie. Indonesia and India) while others are vice versa (Singapore, Japan, Germany, etc.).

The solution to these problems we’re approaching isn’t always more of the same.