White House Economist Warns China Wants to Weaken US Dollar’s Reserve Currency Status — Senator Says Biggest Threat Comes From Within

In a legislature hearing, White House economist Jared Bernstein says there’s “some evidence” that China wants the U.S. dollar to suffer its presumption arsenic the world’s reserve currency. However, U.S. Senator Bill Hagerty stressed that the biggest menace to the USD dominance comes from within.

China Wants to See U.S. Dollar Losing World’s Reserve Currency Status, Says Bernstein

White House economist Jared Bernstein answered immoderate legislature questions astir the U.S. dollar’s presumption arsenic the world’s reserve currency earlier the Senate Banking Committee connected Tuesday during a proceeding connected his information to beryllium president of the Council of Economic Advisers.

Bernstein, a existent subordinate of the White House Council of Economic Advisers, antecedently served arsenic main economist to then-Vice President Joe Biden successful the Obama-Biden Administration earlier joining the Center connected Budget and Policy Priorities, wherever helium served arsenic a elder chap from 2011 to 2021.

During the hearing, Senator Bill Hagerty (R-TN) noted efforts by respective countries that endanger the presumption of the U.S. dollar arsenic the planetary reserve currency, specified arsenic Brazil’s president, Luiz Inácio Lula da Silva, calling for an extremity to the dollar commercialized dominance. Emphasizing that China applauded this, the legislator from Tennessee asked Bernstein: “Do you hold that China wants to spot this happen?” The White House economist promptly replied:

I deliberation there’s immoderate grounds that it does.

Commenting connected wherefore China wants to spot the USD dominance reduced, Bernstein detailed: “I deliberation determination are highly important privileges, and adjacent successful the realm of information reasons, to person — the benefits from having — the reserve currency.” He added: “One of the astir evident is, of course, sanctions. If you power the reserve currency, you’re capable to impost sanctions arsenic we’ve done connected Russia to sizeable effect.”

Debt Ceiling and the ‘Biggest Threat’ to USD

Senator Hagerty proceeded to rise concerns astir “the unthinkable debt” the U.S. authorities “has piled up,” and “the involvement complaint cost, which the CBO [Congressional Budget Office] has projected to really beryllium greater than our full defence budget.”

However, Bernstein said: “One happening we could truly bash to assistance some the dollar support its reserve currency status, but besides to support the worth of the dollar, would beryllium to rise the indebtedness ceiling.”

Commenting connected the U.S. dollar perchance losing its reserve currency status, Hagerty stressed the value of getting fiscal policies successful order. “The fiscal spending is, I think, going to fto the marketplace dictate what happens to the dollar arsenic a reserve currency, and if we proceed to let shortage spending to get retired of control, I very, precise earnestly americium acrophobic that we bash it to ourselves. I cognize China would similar to bash it to us.” He concluded:

China would similar to spot america suffer our presumption arsenic a reserve currency but I deliberation the biggest menace is from wrong by allowing our spending to get retired of control. That’s the way that we’re connected now. We request to spot it backmost nether control.

Do you deliberation the U.S. dollar volition suffer its presumption arsenic the world’s reserve currency? And, bash you hold that the biggest menace to the USD comes from within? Let america cognize successful the comments conception below.

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