Mike Kudzel
speaker
62 appearances
1 recordings
1 series
first heard May 2025
last heard May 2025
Mike Kudzel’s voice in public audio — every appearance, attributed to the second.
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Appearances
So, okay, if the U.S. dollar were to stop being the world's reserve currency... What happens? Like if I'm a central banker shopping for a new reserve currency, what are my best options? I asked each far. This is my little list. China, Europe, Germany, France, question mark, question mark. Oh, I forgot the UK entirely. Sorry. Whoops. Japanese yen.
And then they're like kind of littler guys like Australia, South Korea, Canada. And then there's gold and Bitcoin. Does that sound like the menu of options to you?
I actually went through every single one of those possibilities with Ishwar. What about our old favorite, our old friend, the pound sterling?
Slow economic growth. Let's go to Japan. What are we looking at?
Same problem, not much growth. Plus, Japan's population shape is all wrong. From an economics perspective, they have too many old people drawing down their pensions and not generating money.
They don't want to be the reserve currency. So I asked about Australia. And it turns out, yeah, the Aussie dollar is on the rise. And so is the Canadian dollar and the South Korean won and even the Indian rupee.
OK. OK. So it's like a Franken reserve currency.
Oh, dear. Okay. I'm feeling more pessimistic than I expected.
Liquid, safe. Why not the euro? Well, Ishwar says.
All those countries have their own governments with their own budgets and policies for taxing and spending. And sometimes that doesn't work out so well. Ishwar remembers the Eurozone debt crisis 15 years ago when suddenly Greece realized its books were not accurate and it did not have the money that it thought it did. In fact, it didn't have any money at all. And everyone freaked out.
Okay, so not the euro. What about the other obvious candidate, the other biggest economy in the world? Interestingly, China has been actively trying to become a bigger player in the reserve currency world to get more of the world to use its renminbi.
The renminbi went from being no percent of global foreign exchange reserves to 2.2 percent. Not huge. And that percentage has not been growing.
That's probably the biggest impediment for China. Trust. Central bankers and foreign investors around the world worry that China will change its rules and they won't be able to get their money out, despite China's promises. So, okay, wow. We have found functionally no viable candidates.
Okay, let's do gold. I love gold. Who doesn't?
Nice.
Store of value. That's what I'm talking about.
Yes, literally. Good one. But also just the market. There's not enough gold. The global economy is way bigger. Central banks need more in reserve than gold can provide. All right. Come at me, Bitcoin.
So who is your top draft? Can you make a case for anybody?
Still, they are reaching for it less and less. And Ishwar says that trend will likely continue. The Trump administration's policies just accelerated it.
Okay, so we have until, like, aliens.
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