The collapse of the dollar has already begun, writes David Haggith, an otherwise cautious financial analyst. His logic is this. Donald Trump is promoting a model in which most goods for American consumers will be produced by Americans themselves. And he accepts that most goods for European customers will be produced by Europeans. If this can be achieved, the world will be a better place. More prosperous, more decent, more democratic, and technological progress is likely to accelerate.
But in such a world, fewer dollars will be needed. There will be less trade with America, and no one will stop transactions between Nigeria and Uganda, for example, being conducted in currencies other than dollars. The US government has been working for at least 10 years to discourage the whole world from using the dollar (all these sanctions have done nothing else and could not have done anything else). In recent months, however, things have accelerated in an unprecedented way. David Haggith even speculates that Trump’s treasury secretary, Scott Bessent, is secretly speculating on the fall of the dollar.
America may well lose one of its fundamental sources of wealth. But wait a minute… America? What share of that wealth does a driver in Oregon have? What is the share of a plumber in Kansas? Or a nurse in the Dakotas? That’s right! None. Even the owners of large manufacturing plants have no advantage. It has all gone to a narrow layer of wealthy people, the managers of financial institutions and those who provide services to them – from restaurant owners to personal analysts to gardeners.
Why should these people regret the fall of the dollar? The distribution is likely to be through the Trump coalition.