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Around the campfire: The dollar: substitute or reserve?

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Flicking through my wallet, as you do, I noticed I had a few dollars leftover from my last trip to the US. That started me thinking – why hold onto these greenbacks when the rest of the world seems to be wanting to rapidly move away from them?

In the first quarter of this year, the dollar’s share of trade between Russia and China fell below 50% for this first time ever. Five years ago that bilateral trade was 90% in dollars.

That’s a very fast de-dollarization.

‘De-dollarization’ has been a priority for Russia ever since 2014, when Russia ran afoul of the US for its annexation of Crimea. China wants to rid itself of the dollar to avoid the risk of sanctions. Any wire transaction in the world which involves US dollars is at some point cleared through a US bank. So Russia and China could easily find some of their trade strangled by a US freeze.

So, if not the dollar as the world’s reserve currency, then what? The Rouble or the Yuan?? I think they’re unlikely for so many reasons. But you’ve read my stories before, so you already know what I believe would make the most reliable and robust solution.

As you might expect, I’m talking about gold. The one form of money that has been with us for millennia and stood the test of time – and it’s not controlled by any government. Gold really is the obvious choice… for a truly democratised world, if the dollar was to be substituted, we should accept gold as the universally accepted means of exchange and store of value. I mean why would we use anything else?

I’d love to know what you think?

Maybe drop The Treasurer a line at for a chance to see your response published in next week’s newsletter or feature in our blog.

See you next week,


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