Research Summary

The latest article by Arthur Hayes article discusses the potential political and financial risks associated with the current global economic arrangement, particularly the status of the US dollar as the global reserve currency. It suggests that the debate over whether the USD can be replaced as the global reserve currency is intensifying, with signs of certain trade corridors de-dollarising. Arthur Hayes also highlights the increasing wealth inequality in the US, a consequence of the unequal distribution of benefits that come with the reserve currency status. The article further explores the role of China and its digital currency, the e-RMB, in this changing landscape.

Actionable Insights

  • Monitor the de-dollarisation trend: There are increasing signs of certain trade corridors moving away from the US dollar. This could have significant implications for global trade and the status of the USD as the global reserve currency.
  • Consider the role of digital currencies: The article suggests that China’s digital currency, the e-RMB, could play a significant role in the future of global trade. This could impact the dynamics of the global financial system and the status of traditional reserve currencies.
  • Be aware of wealth inequality: The benefits of the US’s status as the issuer of the global reserve currency are not distributed equally, leading to increasing wealth inequality. This could have social and economic implications that investors need to consider.

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