The Eroding International Dollar

03 Apr

The Eroding International Dollar

A Key Reason to Own Gold!

The US dollar’s share of global currency reserves continues to fall.

One financial blogger headlines the story with this question: “Central banks getting nervous about the Fed’s drunken Money Printing and the US Government’s gigantic debt?”  (

Of course, they are getting nervous.  

The dollar’s share of global reserve functions has eroded from 85 percent in the 1970s.  It is now down to 59 percent, off seven percent since 2014.

Because we believe that the erosion of the dollar reserve function is one of the most decisive developments in the financial world, we have reported on it along the way.  

We tracked Russia’ almost total abandonment of its dollar reserves in favor of gold, writing in 2019 that “Russia, seeking to protect itself from a dollar crisis, continues to reduce its holdings of US Treasury bonds while beefing up its gold stock at an accelerated pace.  

“The Bank of Russia, the central bank, bought 8.8 million troy ounces of gold in 2018, increasing its total gold holdings by 14.9 percent.”  See Russia Adds Gold, Surpasses China… (For Now!) 

In 2919 we wrote, “Like Russia, China’s gold acquisitions can only be described as aggressive.  From 1,054 tons in June 2015, it now boasts reserves of 1,852.  

“In other words, China has grown its official gold holdings by 75 percent in 3½ years.”  See China Adds 10 Tons of Gold to Its Reserves in December.

More recently, we pointed out that the US foreign policy establishment is shooting the dollar in the foot with its promiscuous reliance on sanctions as a primary tool of foreign policy.  We cited a New York Times story that found increasing resistance to US sanctions and the development foreign account settlement options that bypass US control.  See Where Does the World Turn to as it “De-Dollarizes? 

Wolf Street writes, “The US dollar’s status as the dominant global reserve currency is a crucial enabler for the US government to keep ballooning its public debt, and for Corporate America’s relentless efforts to create the vast trade deficits by offshoring production to cheap countries, most prominently China and Mexico.

Talk to a Republic Monetary Exchange precious metals professional about the reasons why gold and silver are your best defense against the declining role of the dollar.