Central bank gold buying remains hot

9.6.23 - Central bank gold buying remains hot

Gold last traded at $1,917 an ounce. Silver at $23.17 an ounce.

JPMorgan says the biggest risk of de-dollarization isn't a rival currency - it's that the US could lose a key tool it's used to fight past economic crises -Yahoo! Finance

The US dollar seems to be under constant threat from other currencies. JPMorgan provides an interesting perceptive: it is not the loss of the dollar's dominance but rather the loss of the ability to help manage the economy. This could create a serious crack in our economic foundation.

by Filip De Mott

The biggest risk of de-dollarization isn't a rival currency - it's that the US could lose a key tool it's used to fight past economic crises, according to JPMorgan.

According to a note on Tuesday, strategists led by Marko Kolanovic said de-dollarization risks are unlikely to mean emerging powers will suddenly stop using the dollar or replace it with another currency.

Instead, the key de-dollarization risk that Western economies face is mostly related to inflation and their debt burdens, they explained.

"Historically, imported deflation via trade with the global South and East, outsourcing less profitable segments of economy, recycling of trade surpluses into USD assets, and domestic energy independence (US shale growth), were key ingredients to the USD supremacy," JPMorgan said. "Imported deflation and debt demand has allowed Western central banks to successfully navigate every recent economic crisis with a combination of monetary and fiscal measures."