The USD is in trouble and it will have a devaluing. Not to the point of hyperinflation but it is over-valued and only kept its current value because it’s the Reserve Currency.
Can XRP replace it as the reserve currency? Maybe. In the right conditions it just might happen.
Global Finanical crisis part 2 - it will be much worse than 2008. Interest rates cannot be lowered to fuel borrowing. The US printed a vast amount of money in 2008 so if they do that again they risk hyperinflation. I think we are headed for stagflation.
“As overburdened households are eventually forced to curb consumer spending to service their debt, the economy will slow and defaults will increase, leading banks to pull back on credit — severely if the banks themselves are over leveraged and lack the capacity to absorb credit losses. This is precisely the cycle we experienced in 2008.”
“In light of the evidence on its predictive power for recessions, the recent evolution of the yield curve suggests that recession risk might be rising,” wrote San Francisco Fed research advisers Michael Bauer and Thomas Mertens.”
Enough countries support a new currency as the standard.
“most candidates are reluctant to take on the role of a global reserve currency because of tensions between national and global economy policy. The economist Robert Triffin pointed out that the country whose medium of exchange is the global reserve currency must meet external demand for foreign exchange. This necessitates running large trade deficits, requiring fundamental changes in the mercantilist policies of Germany, Japan and China.”
“China is calling for a global currency to replace the dominant dollar, showing a growing assertiveness on revamping the world economy ahead of next week's London summit on the financial crisis.”
“German Foreign Minister Heiko Maas also weighed in Monday, saying the EU is working to protect economic ties with Iran and keep payment channels open. Maas reiterated a proposal to make international payments systems like Swift more independent of the U.S.”
“In a stunning vote of "no confidence" in the US monopoly over global payment infrastructure, Germany’s foreign minister Heiko Maas called for the creation of a new payments system independent of the US that would allow Brussels to be independent in its financial operations from Washington and as a means of rescuing the nuclear deal between Iran and the west.”
And lastly, would the US allow it? I say yes it would. Being the global reserve currency has its pros and cons.
“China even blamed the dollar’s international role as one of the causes of the financial crisis in 2008. The problem is that no other currency has stepped forward as a good replacement.”
“As Yale economist Robert Tiffin explained in the 1950s, if a country’s currency is the international reserve currency, then it has no choice but to run a current account deficit. If a replacement is found, as the dollar replaced the British pound in the 1920s, it may be more likely to have trade surpluses – which is what Trump has said he wants.”