Ray Dalio at Bloomie:
Meh. There’s a difference between cyclical deflation of a currency and structural. Dalio is about two hundred years too early by confusing the first and second. Perhaps because he is so biased towards China. Recall this hogwash:
To refresh your memory, the chart below shows the relative powers of the leading countries as measured in indices that measure eight different types of power—education, competitiveness, innovation/technology, trade, economic output, military, financial center status, and reserve currency status.
China should be about halfway up that line and on a much less steep trajectory.
The US dollar has never been more dominant and there is nothing in sight to change it:
- Europe still broken;
- Chinese globailsation reversing;
- gold etc too small and too restrictive.
Expect these calls to resume as the USD falls again during the slow global recovery.
To be honest, the only thing I can see that could kill USD hegemony is the US itself, not by monetisation but by internecine politics.