Nouriel Roubini: World May Abandon USD, Create Bipolar Global Currency System

Nouriel Roubini says that countries worldwide may become less dependent on the U.S. dollar and create a two-currency system. A professor at New York University’s Stern School of Business said that world leaders are seeking ways to eliminate the dollar’s power. Roubini said in several talks that China, Russia, and Brazil might build an alternative financial system that doesn’t use the USD to settle international trade. 

Nouriel Roubini said that the weakening of the dollar might not happen immediately, but Americans could feel it was happening over time. He said the current banking problem was a big reason the USD fell. The failures of banks are making people less likely to believe the dollar, so other countries are getting rid of the reserve money.

He said the idea of making new money arose because of the problems between the U.S. and China. “It’s clear that the strategic rivals of the United States- China, Russia, Iran, Pakistan, and their friends and allies. Want to build an alternative economic monetary and global reserve currency system. Because they’re concerned about the sanctions that the US, Europe, and others can impose”.

Roubini also said that the banking problem is not over and that more secrets could come out. “They (banks) lend to SMEs, they lend to households, they lend to commercial and residential real estate. The credit crunch is going to take the U.S. economy into a recession later this year”.

When other countries move away from the dollar, they might not feel the effects of a bad economy as much. This could give them an extra boost to make more money when the American economy is terrible.

“China has $1 trillion of reserves. Therefore, they’re going to move in the direction of proposing the RMB as an alternative to the U.S. dollar. Gradually, we’re going to go from a unipolar to a bipolar global reserve currency system,” Roubini summed it up.