US Dollar: Reserve role questioned - Rabobank

Rabobank strategist Michael Every discusses contrasting views on the Dollar’s global role. Every cites Adam Tooze’s argument that the USD is now a “profit dollar” backed by rising asset prices, and counters that dismissing Dollar holdings on that basis is odd without an alternative Hamiltonian neomercantilist framework, underscoring realpolitik between financialisation and production.

Debate over Dollar’s reserve status

"Contrast that with the argument made by Adam Tooze in the Financial Times that the USD is no longer a global reserve FX but just a “profit dollar” backed by rising asset prices."

"There’s a vast realpolitik difference between financialisation and production but arguing one shouldn’t hold dollars because US assets appreciate is rather odd absent a counterargument for Hamiltonian neomercantilism which many, if not all, critics of the US also reject as the solution."

"See the op-ed today in the New York Times from Mohamed El-Erian arguing ‘America was being played. The Bessent Doctrine says those days are over’, which says economic statecraft has taken over and the global leaders of tomorrow need to learn that “considerations of national security, domestic politics, and geopolitics no longer play second fiddle to traditional business interests in determining corporate and economic outcomes."."

"Those business interests are now being sidelined."

"Today’s highlight will be the Fed minutes… in line with the Warsh Doctrine, how minute (as in small) will they now be?"