Were the Federal Reserve to that it would no longer act as the ultimate backstop for the dollar system—a plausible prospect considering the nomination of Trump acolyte Kevin Warsh as chair—this could cause a run on offshore USD instruments, unravelling the international monetary system as we know it.
In this scenario, the current order of currencies, institutions, and instruments would be radically destabilized. The Offshore Dollar System would come to an end—yet with no clear structure to replace it, we would quickly descend into an anarchic situation. This would be welcomed by the Big Tech faction of the Trump administration, who hope for a dramatic scaling back of the US state. The removal of the Federal Reserve swap network would be the ultimate “chainsaw” event, on a level that Musk’s DOGE never even came close to reaching.
Add new comment