The frequent use of unilateral sanctions by the United States in recent years has caused its economy to struggle and triggered a global trend of de-dollarization, but the United States does not seem to care about this risk and is confident in the dollar's position.
U.S. Treasury Secretary Janet Yellen recently appeared at a congressional hearing and expressed her views on the issue of de-dollarization, and she believes that the U.S. dollar is still an irreplaceable currency in the world financial system.
Yellen said that although the unilateral sanctions of the United States have made some countries seek other currencies as trading tools, due to the widespread use of the dollar around the world, no country can shake the hegemony of the dollar, even China, which is comparable to the strength of the United States.
The U.S. claims that the U.S. dollar has an advantage over other currencies as a reserve currency, so the U.S. has nothing to worry about even if traditional allies such as France begin to trade non-U.S. dollars.
However, Yellen also acknowledged the risks that the dollar may face, namely that countries around the world are accelerating the diversification of reserve assets, and the US debt ceiling crisis is also eroding the credibility of the US dollar, and she recommended that the US and Congress reduce their reliance on sanctions.
In fact, after the two parties in the United States attacked each other for increasing the US debt ceiling, Yellen's words also appeared to be a bit bluffing. Yellen's statement, on the one hand, is aimed at stabilizing the capital market and political situation in the United States, and on the other hand, it also reflects the blind optimism of the US fiscal circles about the dollar.
The reason for optimism in the United States is that the decline in the proportion of the dollar's reserve currency is a temporary crisis, the result of the epidemic and the competition between China and the United States, and as long as the epidemic is over, the United States can regain control of the monetary situation by adjusting fiscal policy.
However, the credit of the United States has been seriously damaged, people without credibility will not stand, the country without credibility will decline, the United States has frequently abused sanctions, and the U.S. debt is also facing default because of domestic political struggles, all of which have made countries around the world lose confidence in the dollar, and once the credit is damaged, it is difficult to recover.
For us, although the dollar is still dominant, we should not take it lightly. In the future, we should promote the development of a multipolar world and accelerate the internationalization of the renminbi, and gradually reduce the space for the dollar through a two-pronged approach.