Doubts Emerge Over Dollar’s Role as a Reserve Currency

from New York Sun

With Congress readying a vote on whether to elevate Judy Shelton to the board of the Federal Reserve, Goldman Sachs has just put out a startling research report. It’s not about — and doesn’t mention — Ms. Shelton or Mr. Trump’s other nominee to the Fed board, Christophjer Waller. It does make clear that Ms. Shelton is not the only serious person thinking about the question of a role for gold in the monetary system.

Goldman’s report, issued three days ago, is called “Gold Views: In Search of a New Reserve Currency.” It notes that the collapse in the value of the dollar — the phrase it uses is the “recent surge in gold prices to new all-time highs” — has outpaced the rise in real rates and other U.S. dollar alternatives, like the Euro, Yen, and Swiss Franc. It believes this is being driven by a “potential shift in the US Fed towards an inflationary bias.”

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