by Peter Zeihan on May 24, 2023

The topic of de-dollarization is like the weird cousin no one wants to talk to at parties. They only come around once every year or two, and most of what they say is complete bulls***. But when the day comes that you need to take that weird cousin (aka de-dollarization) seriously, here are the three factors to look out for.

#1 Size – To be a currency of exchange, trade, and reserve, a currency must exist in a massive volume. Only four currencies meet the size requirement: Dollar, Euro, Yen and Yuan.

#2 Access – You need to be able to get ahold of a (nearly) unlimited supply of said currency at the drop of a hat. The Dollar comes out on top in this category, with the Yen and Yuan unable to provide the necessary level of access.

#3 Trust – You must feel secure that the chosen currency is a safe store of value and that the government will not intervene. This makes the currency a subset of trade, and if the country in charge wants to micromanage the value on a daily basis, it won’t work.

Several countries have been shouting from the mountaintops that they want to move away from the Dollar. I don’t take most of these too seriously, but one country is seriously considering de-dollarization, and we’ll talk about that tomorrow…

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