Key Takeaways
- White House economist Jared Bernstein has confirmed that the global status of the US dollar is threatened
- Bernstein is President Joe Biden’s nominee as the head of the Council of Economic Advisers
- China has convinced several countries to stop trade with the US dollar
YEREVAN (CoinChapter.com) — In yet another confession from the Biden Administration, White House economist Jared Bernstein has claimed that there is ‘some evidence’ that China wants to weaken the US Dollar by challenging its global status as a reserve currency.
Bernstein addressed the Senate Banking Committee after President Joe Biden nominated him as the head of the Council of Economic Advisers. He has been a member of the council since January 2021. He has also previously served as the chief economist and economic adviser to Joe Biden when he was the Vice President of the United States under President Barack Obama.
Republican Senator Bill Hagerty from Tennessee quizzed Bernstein on his stance on the weakening US Dollar. This forced the economist to concede that China threatens the dollar’s long-held status as a trade currency.
“I’d like to start with you and talk about what I see as a very troubling trend that’s been developing. That’s the growing momentum and efforts of our allies and our adversaries to weaken the Dollar’s role as the international reserve currency. That includes Xi Jinping, Vladimir Putin… Brazil’s Lula calls for an end to dollar trade dominance. China applauds this. Even Malaysia sought to promote alternatives to the dollar,”
Hagerty said.
Bernstein has previously argued that it would be good for the US Dollar to lose its global status as a reserve currency. The Senator referred to these arguments to make sense of his current position.
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Jared Bernstein wanted to Dethrone’ King Dollar.’
In a 2014 article in the New York Times titled “Dethrone King Dollar,” Jared Bernstein called on the US Government to stop putting efforts to maintain the greenback’s dominance.
Instead, Biden’s long-time confidant argued that “America’s trade deficit can worsen” as long as the dollar remains the global reserve currency.
“New research reveals that what was once a privilege is now a burden, undermining job growth, pumping up budget and trade deficits and inflating financial bubbles. To get the American economy on track, the government needs to drop its commitment to maintaining the dollar’s reserve-currency status,”
Bernstein wrote.
However, he now seems to have backtracked from this thought. He told the Senate that he does not believe the United States would be better off if the US Dollar “were somehow to lose its status as the world’s reserve currency.”
Bernstein’s statement on China comes just a day after Biden Administration’s Treasury Secretary Janet Yellen revealed that economic sanctions on Russia hurt the US Dollar.
Also Read: US losing political clout as Allies in the European Union look to strengthen ties with China
No love left for the US Dollar
Earlier this month, former US President Donald Trump had warned that the US Dollar’s dominance as a reserve currency would end, thanks to Joe Biden’s policies.
Last month, China and Brazil announced they would ditch the dollar and start trading in their currencies. During his official visit to China last week, Brazilian President Luiz Inácio Lula da Silva openly denounced the dollar’s dominance. He further urged developing nations to replace the American currency with their own.
Russia announced recently that it would use the Yuan to trade with countries in Asia, Africa, and Latin America. Last month, China completed its first liquid natural gas (LNG) trade in Yuan, in the 65,000 tonnes of LNG imported from the United Arab Emirates.
Moreover, nearly 20 countries have agreed to accept the Indian Ruppee in global transactions.
Recently, BRICS announced it is working to form its internal currency for trade. The organization comprises economic giants Brazil, Russia, India, China, and South Africa.
As March ended, Saudi Arabia joined a China-led Shanghai Cooperation Organization as a dialogue partner.
With allies ditching it and rivals doing everything to undermine the US dollar, it is unsurprising that Jared Bernstein has seen “some evidence” that the dollar’s days are numbered.
