Did Argentina just de-dollarize?
No, says Keith. Quite the contrary.
Did Argentina Just De-Dollarize?
For the DoD (Death of the Dollar) brigade it’s always a good time to find a story that rhymes with the favored view that it’s only a matter of time before the US dollar goes up in flames. In my experience, it’s only been 20 years or so that the war drums of Uncle Buck’s death have been beating.
The dollar may be garbage, but it is the Garbage King.
The dollar system is fatally flawed, and on shaky ground (see First Republic Bank’s failure as the most recent example), but that does not mean it will crash tomorrow. In the same way that California won’t be drifting into the Pacific Ocean tomorrow morning, despite its history of earthquakes.
Instead of focusing solely on the King of the Garbage, why don’t the DoD focus on the whole pile of crap that is the debt-backed paper currency system? Why? Because hype sells and when you’re hyping the death of the world’s reserve currency of the heretofore greatest nation on earth, that goes double.
The Unpopular Truth
The truth is that Argentina wants to pay in Yuan to slow the outflow of its dollar reserves. Since all currencies are dollar derivatives, losing your dollar reserves is akin to gutting the value of your currency. Argentina is not attempting to de-dollarize, they are in fact desperately trying to hold on to their dollars by paying in any other currency they can. This story is spun as a good thing for Argentina, and as threat to the dollar. When in reality, the dollar is holding. It is Argentina’s currency that is suffering.
The interwebpipes are clogged with misinformation, either intentionally put forth through robots and Twitter influencers (oh wait, they’re usually the same thing) or ignorantly presented as dogma. I find Keith a refreshing voice in the precious metals/currency markets.
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