There are 'real concerns' about U.S. dollar's role as reserve currency, Goldman says

(Image credit: ATTA KENARE/AFP via Getty Images)

published 28 July 2020

Strategists at Goldman Sachs Group Inc. are warning that the U.S. dollar may be on its way out as the world's reserve currency, Bloomberg reports.

"Real concerns around the longevity of the U.S. dollar as a reserve currency have started to emerge," the Goldman strategists wrote.

Unsurprisingly, their worries are tied to the coronavirus pandemic, which leaves the dollar facing the risk of political uncertainty and another spike in cases. Per Bloomberg, there's also a sense the U.S. Federal Reserve may shift toward an "inflationary bias," and that coronavirus-related debt build up will lead to debasement fears. So, Goldman dubbed gold, which has rallied furiously in recent months, as "the currency of last resort, particularly in an environment like the current one where governments are debasing fiat currencies and real interest rates to all-time lows."

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Tim is a staff writer at The Week and has contributed to Bedford and Bowery and The New York Transatlantic. He is a graduate of Occidental College and NYU's journalism school. Tim enjoys writing about baseball, Europe, and extinct megafauna. He lives in New York City.

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