Former Chief Tech Officer at Coinbase, Balaji Srinivasan, took to Twitter to remind his followers about Jared Bernstein’s earlier stance on de-dollarization. The angel investor sees logic in views that the new White House top economist has now abandoned, on the U.S. dollar’s status as a global reserve currency .
Not a Bitcoin Maximalist — Biden’s Chief Economic Aid Said This About De-Dollarization, Balaji Points Out
“The government needs to drop its commitment to maintaining the dollar’s reserve-currency status!” ex-CTO of leading U.S. crypto exchange Coinbase tweeted on Monday, asking followers to guess “Who’s saying that…some Bitcoin maximalist?”
“No, it’s Biden’s new top economist,” the tech entrepreneur remarked in a post exposing Jared Bernstein’s previous position on what Washington’s policy regarding the greenback should look like and finding certain rationale in it.
DETHRONE KING DOLLAR!
The government needs to drop its commitment to maintaining the dollar’s reserve-currency status!
Who’s saying that…some Bitcoin maximalist?
No, it’s Biden’s new top economist. pic.twitter.com/C9QT7rjM9c
— Balaji (@balajis) June 19, 2023
Srinivasan referred to an op-ed published by Bernstein in the New York Times back in August 2014 titled “Dethrone ‘King Dollar.’” In the article, the author argues that that the dollar’s role as a currency that foreign banks and governments want to hold undermines job growth in America and pumps up its budget and trade deficits, inflating financial bubbles.
President Joe Biden nominated Bernstein to chair his Council of Economic Advisers in mid-February. Answering questions from members of the Senate Banking Committee during the vetting process, the economist blamed China for seeking an end to the dollar’s dominance because it helped the U.S. to sanction Russia following Moscow’s invasion of Ukraine. He was quoted as stating:
There are extremely important privileges, and even in the realm of security, benefits to having the reserve currency.
On June 13, the U.S. Senate confirmed Jared Bernstein, a longtime adviser to Biden, as Chairman of the economic council at the White House. “Yes, I’m aware that Bernstein recanted in his public testimony, but this was his long-held view over the course of a decade and actually has some logic to it,” Balaji Srinivasan noted, backing the original de-dollarization stance of the economist.
‘De-Dollarization Isn’t Happening, and It’s Good That It Is,’ Srinivasan Says
“Of course neither side wants to admit the similarities, but both Biden and Trump have advocated economic nationalism, trade war, and industrial policy,” the former Coinbase executive pointed out, suggesting that Bernstein is “sort of left-MAGA.” He further elaborated:
And if you’re really leaning into that, maybe you also want to depreciate the USD to make American exports more competitive abroad. That’s where Bernstein is coming from. And you know what, his case is actually not irrational!
According to Srinivasan, it’s good that de-dollarization is happening but this is a “hairpin turn” that is not easy to manage. “How do they go from ‘our reserve currency status is unquestionable’ to ‘our reserve currency status is unquestionably a burden?’” he asked rhetorically.
Balaji is convinced that politicians will try to sell it like inflation — “First, de-dollarization isn’t happening. Then, it’s happening, but not fast. Next, it’s happening, but not a big deal. Finally, it was obvious, inevitable, and even good! And your fault for not hedging … Because ‘the privilege of having the world’s reserve currency is one America can no longer afford.’”
Balaji Srinivasan has previously highlighted numerous potential challenges for the U.S. and the global economy, such as sovereign defaults and rising credit card debt, as well as negative developments in the bond, real estate and other markets, and including the current de-dollarization trend.
In other recent tweets, he emphasized that de-dollarization is driven not by markets or one state but dozens of states, “because they don’t want DC to be able to kill their economy with the flip of a switch. And can you blame them? Is a remote kill switch a ‘democratic’ world order?” he added in another rhetorical question. “The world is declaring independence. They don’t want ‘King Dollar’ anymore than George Washington wanted to be ruled by the ‘King of Great Britain,’” he concluded.
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