Zoltan Pozsar of Credit Suisse: War and Commodity Encumbrance
This report discusses the shifting dynamics of global trade, particularly in regards to the role of the US dollar as the dominant currency for international transactions.
- This report discusses the shifting dynamics of global trade, particularly in regards to the role of the US dollar as the dominant currency for international transactions.
- The rise of China and other countries in the East and South is leading to a shift towards the use of alternative currencies, such as the Chinese renminbi, in trade settlements. This shift is being facilitated through the use of currency swap agreements and central bank digital currencies, which allow countries to bypass the Western-dominated financial system.
- The concept of "commodity encumbrance," in which countries pledge their natural resources as collateral in exchange for increased credit capacity in an alternative economic system.
- The possibility of a new international reserve currency being developed based on a basket of currencies from participating countries, with the weight of each currency determined by the amount of natural resources reserved for backing. This new monetary unit would potentially be used for trade and investment financing through bilateral swap lines.
