Amid projections that the United States dollar is on the path of losing its role as the global reserve currency, Tesla (NASDAQ: TSLA) and Twitter (NYSE: TWTR) CEO Elon Musk has suggested that the reason why countries are abandoning it was its weaponization by the powers that be.
Specifically, Musk was commenting on a Twitter video post shared by economist Peter St Onge, in which he argued that the “de-dollarization is happening faster than people realize,” and re-tweeted by the user Wall Street Silver on April 24.
Indeed, Onge quoted former Morgan Stanley (NYSE: MS) analyst Stephen Jen, as saying that “adjusting for price changes has revealed the true speed of de-dollarization. The dollar share went from 73% in 2001 to 55% in 2021, at which point it fell off a cliff, losing market share 10 times faster.”
“The dollar plunged 8% in share in a single year to just 47%. So we lost about double the entire share of the Chinese yuan and, at that pace, the US dollar would be eclipsed in about six years.”
According to Onge, this is happening because the “US last year froze 300 billion in Russian central bank dollars – that’s about $4 trillion in US terms controlling for [gross domestic product (GDP)]. Keep in mind, these were Russia’s sovereign dollars – they and everybody else in the world thought of them like gold.”
As the economist argues, this was done to exert pressure on Russia, which is involved in an ongoing invasion of Ukraine:
“The goal was to cause bank panics and crash the Russian economy, perhaps to set off mass unemployment and civil unrest. Of course, it backfired, instead sending countries around the world in panicked flight from the dollar.”
Musk agrees and he’s not alone
Agreeing with Onge, the SpaceX CEO and chief engineer shared his own two cents on the matter, stressing that this method of currency weaponization will, indeed, lead to its abandonment by other nations. As he highlighted:
“If you weaponize currency enough times, other countries will stop using it.”
Meanwhile, Musk and Onge are far from the only people warning about the USD losing its status. Robert Kiyosaki, author of the best-selling personal finance book ‘Rich Dad Poor Dad,’ has projected that the end was coming to the USD’s global domination as the reserve currency.
At the same time, he also warned about the US losing its role as the main ‘bully’ on the global financial ‘playground’ and that all the reserve currency it had supplied for decades to other countries could come crashing as an ‘economic tsunami’ and ‘tidal wave of toilet paper’ on America, as Finbold earlier reported.