Part 6/12:
Central to the discussion is the dwindling confidence in the US dollar's status as the world's reserve currency. The speaker describes the US as a “rogue nation,” undermining international institutions and disregarding treaties. The loss of trust extends beyond politics into financial markets.
US bonds, previously considered the safest assets globally, are now experiencing volatility. Rising interest rates threaten to inflate the debt service costs of a US already drowning in trillions of dollars of debt—expected to reach $38 trillion. The risk of a bond market run looms as investors doubt the US government's fiscal discipline. This erosion of faith in US financial stability could prompt nations and investors to seek alternatives, thereby weakening the dollar’s dominance.