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Dollar dominance may be in jeopardy

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Dick bove, senior research analyst at Odeon Capital, considers that the picture looks different with respect to the future of the North American currency. Well for him, the dominance of the dollar is in danger and maybe it’s time for cryptocurrencies to take advantage.

The hegemony of the dollar seemed to prevail in the world, since practically the environment of the world economy has been governed by the American currency.

Since the global pandemic began, certain phenomena have occurred in the performance of the dollar.

Since it began as the safeguard currency against any measure in the markets. And as the months progressed, the situation changed, beginning its plummet into free fall.

Now, analysts carefully study the performance of the American currency in every sense. As many are beginning to consider that perhaps this is the time for other trading methods to take the lead.

The dollar-dominated financial system could come to an end

For Dick Bove, the long-standing financial system, ruled by US dollars, could come to an end amid the challenges of the current system, providing the possibility for a multi-currency system to be implemented.

The most relevant aspect of his analysis is that, beyond pointing to other currencies as the safe substitute for the dollar, his vision focuses on the need for digital currencies to be included in this new market structure that he envisions.

The new currencies could be paper, metal or cryptocurrencies”Bove wrote. “The possibility of this happening can only be described as terrifying to many analysts and investors, but the probability is quite high, as the system requires it, as the dominance of the dollar is in danger.“.

This possible change in the global financial system came after the prices of gold and other precious metals rose.

The new currencies that could dominate the market

To understand why the analyst Bove considers this possible future, where the dominance of the dollar is in danger globally, it is necessary to review the meaning of these variants.

In the case of paper money, it is a fictitious or figurative value, which necessarily circulates as money. Basically it fulfills the functions of a contract that, in the future, should give in exchange money or a payment of the obligations contracted in the previous agreement between the parties.

Metallic money, on the other hand, is commonly known as currency. It is one of the first instruments that were created to facilitate trade. The most widely traded metal coins are silver and gold.

One of the main advantages offered by coins is that they contained an intrinsic value for the metal from which they were made. And today, you can see how gold continues to be a safeguard asset for many investors and companies.

The so-called “digital impulses” are nothing more than cryptocurrencies. Well, for Bove, the future of this new financial system will be based on cryptocurrencies, since the dominance of the dollar is in danger.

Will the future really undergo so many changes?

I do not really know if the dollar will fall to such an extent that all these currencies replace its place. However, the recent behavior of the currency is a red flag, according to Dick Bove.

The US dollar has also been attacked from various flanks, such as China and Russia, pushing for the renminbi replace the dollar in international trade, as well as the rapid growth of the US money supply.

Bove, who has been a Wall Street analyst for five decades, pointed to Bitcoin’s recent rally while discussing cryptocurrencies as an alternative to the dollar. He even commented the following: “Anything can be used as currency as long as people accept it, and Bitcoin is increasingly accepted in the world“.

However, Bove concluded that, for now, gold is “a clear choice”That investors should consider to protect themselves from growing risks to the dollar system.

Do you think that this will be the future of the global financial system and that the dominance of the dollar is really in danger?



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