Odd Lots - Why The Dominant U.S. Dollar Refuses To Go Away

Episode Date: September 16, 2019

For years, people have been predicting the demise of the U.S. dollar as the global reserve currency. Although the U.S. economy has been shrinking as a share of the world's GDP, the dollar continues to grow ever more dominant. Yet its strength is increasingly cited as a factor behind economic problems around the world. On this week's Odd Lots, the economist David Beckworth, a research fellow at the Mercatus Center, explains the dollar's persistent and growing strength.See omnystudio.com/listener for privacy information.

Thanks for listening to Odd Lots. Follow the show on Amazon Music for more future episodes or just ask, Alexa, play the Odd Lots podcast on Amazon Music. Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthal. And I'm Tracy Allaway. Tracy, we've both been covering financial markets and the economy for, I think roughly the same amount of time, right? You are four years older than me. I know you forget this from time to time. But yeah. Wait, are you a millennial? I'm on the cusp of a millennial.

I'm what they call an elder millennial, Joe. But roughly the same, sure. So one of the things that I think has been a persistent theme for as long as I've been following this stuff is people predicting the inevitable demise of the U.S. dollar as the global dominant safe asset. Wouldn't you, would you feel the same way? Oh, for sure. And there are certain, let's say, conspiratorial-leaning websites and commentators who love to take up this topic. In fact, I still remember my dad emailing me about how the Iraq war was caused by Iraq demanding or starting to offer crude oil in euros as opposed to the U.S. dollars. So this is something that comes up all the time that there's going to be.

Sure, I just had a really good idea. Okay. Can we have your dad as a guest on the show sometimes? Oh, my God. No, I'm serious because a number of times now your dad has come up as a character and you're thinking, whether it's like we're talking about precious metals or some other conspiracy or something political. And it's like, why do we keep talking about him? Why don't we have him as a guest sometime?

I will ask him. Yes. Definitely ask him about silver if he comes on. Okay, good. Don't tell him, don't show him any of my writings where I talk about how crazy silver people are, though. Okay, I don't want him to dislike me. All right. But anyway, you're right.

So a lot of like fringe, gold bug, zero hedge, silver bug, all that kind of stuff. They've been talking about the inevitable demise of the U.S. dollar for as long as I think both of us can remember. But what's interesting is that rather than the dollar haven't collapsed, as many people would have predicted, maybe after the financial crisis or beforehand due to various reasons, it's actually gotten stronger. and it's going nowhere. It's still here just as strong as ever. And arguably, it's becoming even more dominant on the global stage over the last decade or so. Yeah.

And in addition to that, you now have quite a bit of academic research that's actually pointing out just how dominant the dollar is in the financial system and starting to write about how this is a problem. So, Hyeong-Sung-Sun-Shin, from the Bank for International Settlements,

who was on Oddlots, is a really good example of this, but probably the most recent one was Bank of England governor, Mark Carney, who gave that speech at Jackson Hole. We mentioned it on last week's episode of the podcast, and you actually weren't there, but he proposed potentially replacing the dollar in the financial system with a sort of multipolar digital currency. I think he called it a synthetic hegemonic currency. I know. I love that expression. It's so sci-fi. But yeah, so it's interesting. It's like the conversation about the dollar. It's not that the dollar's got collapsed as everyone predicted or as a lot of people thought it was inevitable. It's actually gotten stronger. And now the conversation is, oh my God, it's becoming too dominant. And so we do have all these sort of elite circles, whether it's Mark Carney or the BIS. And they're also talking about the post dollar world. But from kind of the opposite perspective that we would like to see it recede. And it's a stubbornly refusing.

too much to the chagrin of maybe your dad and other conspiracy theorists. Right. So we're going to be talking about the dollar's not so inevitable demise on this episode. Exactly. The dollar's refusal to weaken, just how everyone thinks it should. So previous odd lots, guests from way back in the day, I think we talked to him right in the wake of the Trump election about various topics. He's an economist. He's been talking and writing about the dollar a lot lately. and sort of thinking about these issues, kind of on a similar trajectory as Mark Carney. I want to bring in this week's guest David Beckworth. He's a senior research fellow at the Mercatus Center at George Mason University, longtime economics researcher and commenter, public voice on these issues.

David, thank you very much for joining us. Well, thank you for having me back on the show. Thanks for being back. So, you know, how surprised are you? Let's start by this about how proud. prominent the voices are these days, Tracy and I were just talking about, who are really calling out the sort of urgent need, or at least semi-urgent need, to get away from the global dollar dominance. It is surprising that we are having this conversation in this time and history. You're right.

You would think by this point the dollar would be less consequential, but the rest of the world continues to fill its brunt, as you mentioned. So it's not surprising that the rest of the world is talking about it. It's just surprising that we're still talking at this point in time. John Connolly, Richard Nixon's Secretary of Treasury said that dollar is our currency, but it's your problem. I think the difference today would be it's our currency and it's our problem collectively as a world because I think the big difference between now and then is it's gotten so far reaching that when it does create problems, it affects the world, but it also comes back to affect the U.S. economy. So talk to us exactly why a strong dollar is a problem for the U.S. economy.

And could you maybe sort of put it through the lens of Donald Trump? And the reason I ask that is because there used to be some confusion, or it seemed like there was confusion about whether Trump wanted a stronger or a weaker dollar. You know, a strong dollar intuitively sounds good for someone who likes to make things great again, but a weak dollar would be good for U.S. exports and the manufacturing sector. And now it seems like Trump has definitively settled on what he wants. He wants a weaker dollar. So why is that and why is a strong dollar painful for America?

Yeah, I think there's two reasons or two ways that it affects the U.S. And the first one is the one you're talking about that Trump's really worried about, even if he hasn't correctly figured it out entirely. And that's the domestic effect. So the world demands dollars to buy our safe assets. We're like the biggest producer of safe assets, treasuries, but also some other assets, GSCs, even some privately produced safe assets. But as a consequence, the dollar tends to be overvalued more often than not, which in turn

means we're going to run more trade deficits. We're also going to tend to run more budget deficits. And all this has distributional consequences. It tends to support the finance industry. We are great at export. debt and financial securities to the rest of the world. It's one of our comparative advantages. But, you know, Trump sees the flip side of that. He sees the cost and that certain other industries like manufacturing do get harmed. And so there's this distributional question,

and it does have a bearing domestically. Also, in addition, because the world wants our assets so badly. In general, financing costs are lower in the U.S., which means the U.S. tends to be more leverage than it would otherwise be the case. So between kind of distributional questions, more over-leverage, there is this domestic angle. And I think that's what Trump really is trying to figure out. He blames China. He blames others. But it's really the strong dollar that arises from this demand for our assets. But the second thing that's, I think Carney is getting at as well, is there is this global financial. cycle, you see the Fed being more cognizant of it. Now, J-PAL can't come out and say, hey, we have an

international mandate now, but he is more mindful of the reverberations that, you know, their policies can have to go through the global economy, come back to the U.S., but in short, there's this domestic concern, and then there's an international concern. So there is a lot to unpack here. Let's start with, you talked about the insatiable demand or the very high demand at a minimum for U.S. financial assets. And treasuries are one of them, but GSE debt is another. Maybe certain parts of U.S. real estate are considered safe dollar denominated assets by the rest of the world. Explain this phenomenon. What is it about U.S. dollar denominated assets that people crave all around the world and why can't they find the equivalent elsewhere, whether it's in

Japan or Germany or UK or some other country like that? Well, it's a path dependency story, I think you can tell. I mean, it starts off with the U.S. being the biggest economy in the world. Now, we're not so much. We're running neck and neck with China. But that's the original story here, is the U.S. starts out big. It's got a huge tax base, lots of resources to back it up. But over time, what happens is the dollar spreads throughout the world.

And so there's these huge network effects. And its path dependency story is the more widely. use this currency is, the more valuable it is. It's gotten to such an extent there's an incentive to look to any kind of dollar denominated asset as the safest asset of the world. So even as the U.S. size, the U.S. economy is a percent of world GDP shrinks. The reach of the dollar continues to grow. And that's one of the discussions that was had at this Jackson Hole conference is that it's ironic that the dollar's reach is actually growing when the U.S. economy shrinking. And again, the reason is, it's just it's more convenient. There's a convenience yield to

to price things than dollars. Now, it's better to get them from the U.S., but foreigners are also producing these dollar-denominated assets. So the BIS keeps track of this, and they report just over $11 trillion and dollar-denominated securities have been issued outside the United States. So there's an incentive for them to issue it as well, just because of the convenience yield. So just to press on this point, you're saying that everyone wants dollar-denominated assets, but because the rest of the world economy is growing while the U.S. is sort of sluggish or not growing as fast, that at some point maybe now, the U.S. becomes unable to basically absorb all that demand for dollar-dened assets. Is that it?

It's been coined the Triffin dilemma. The world wants the reserve currency's assets more than the country that produces is willing to either make it or can make it. So, yeah, the world wants us to produce more treasuries, more GSEs, more financial assets, but that in turn would make us an incredibly over-leveraged economy. And so somewhere else in the world, they're trying to meet that demand. I mean, we saw this during the early to mid-2000s. There weren't enough treasuries to go around, so we turned to Wall Street to create synthetic safe assets

that weren't so safe once, you know, everything came clear. And I think we're seeing that again in the rest of the world. The world's producing some of this. Wall Street still is producing. There are privately labeled assets still going out there. But for us to truly meet the world's demand, in other words, for us to get those interest rates around the world back up to what would be more normal historical levels would require a lot more debt creation. And I think we're uncomfortable doing that at some level. The news doesn't stop on the weekends.

Context changes constantly. And now Bloomberg is the place to stay on top of it all. Hi, I'm David Gurra. Join us every Saturday and Sunday for the new Bloomberg this weekend. I'm Christina Refini. We'll bring you the latest headlines, in-depth analysis, and big interviews. All the stories that hit home on your days off. And I'm Lisa Mateo.

Watch and listen to Bloomberg this weekend for thoughtful, enlightening conversations about business, lifestyle, people, and culture. On Saturday mornings, we put the past week's events into context, examining what happened in the markets and the world. That on Sundays, we speak with journalists, columnists, and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television. Listen on Bloomberg Radio, stream the show live on the Bloomberg business app, or listen to the podcast. That's Bloomberg this weekend, Saturdays and Sundays starting at 7 a.m. Eastern. Make us part of your weekend routine on Bloomberg Television, radio, and wherever you get your podcasts. I want to get to the other side of

the equation about the downsides of the global dollar, but just to walk us there, So we have all this demand for dollar denominated assets because of these network effects that you describe. That has distributional consequences for the U.S. because it perpetually maybe strengthens the dollar too much, hurting domestic manufacturers while benefiting the financial industry, which essentially is the manufacturer of dollar denominated assets. So helping finance hurting workers, you can see why Trump is not. crazy about that situation. Let's talk about the global picture. So something that obviously Mark Carney talked about at Jackson Hall was it's not just that it hurts U.S. workers, the strong dollar. There are consequences for the entire world of everyone essentially being

on the dollar cycle. And I think we saw that in 2018 a bit when the Federal Reserve hiked rates multiple times. Perhaps that was appropriate given the growth of the U.S. economy that year. but it hurt other parts of the world that maybe didn't want to see rate hikes. Talk to us about the effect the dollar dominant has on other countries. Yeah, because of all the dollar denominated assets held abroad, as well as the number of countries that either implicitly or explicitly linked to the dollar, and there's this number I throw, and it seems almost too high, but 70% the world economy has their currency linked in some form of the dollar.

And this comes from a Rockoff, Reinhardt, and his Elsie. paper. But because of that, 70% of the world economy is linked in some form to the dollar. That means when the Fed sets monetary policy or when it causes the dollar changing value, it's really setting monetary policy to some extent for the rest of the world. And that's just a bad idea. We're not all the same economy. Just like the Eurozone has learned, one size does not fit all for the ECB. It doesn't make sense for the Fed to be setting monetary policy for the world effectively. You know, it goes through the linkage of currencies that link to the dollar, but also all this dollar denominated it. The $11 trillion, those are liabilities that foreigners own, and yet their revenues are earned in their domestic currency.

So you have currency mismatch on balance sheets. You got the wrong monetary policy coming in. So it does. It creates this kind of global financial cycle, and it's really a global dollar cycle. I think central bankers, policymakers around the world are acutely aware of it, more so probably than U.S. policymakers. You mentioned 2018, Joe, I remember 2015, something similar happening. When the Fed started talking up rate hikes, the dollar began to go up while the other central banks were easing. And that also created some pressures, kind of a mini recession in the U.S. during that time.

And that was a global story. Oil prices collapsed. The emerging markets slowed down. There was some panic in China. Yeah, when the U.S. sneezes, the rest of the world gets a cold, the saying, and it's even more true with the reach of the dollar today. So how does the international aspect of all of this actually impact the dollar? Because you sort of alluded to this already, but after 2008, we had this shortage of safe assets, right? So I'm just curious, if dollar dominance grows with each financial crisis or even with each bout of risk off in the market,

and that would mean dollar financing costs also decline, which would incentive. advise people to use more dollars, I guess. How do you break that feedback loop? Because it feels like we're in this sort of endless cycle of ever-increasing dollar reliance. To be honest, I don't know that we can or that it's possible anytime soon. That was the hard of Mark Carney's proposal, right? Is he wants to find a rival or a substitute to the dollar? And just to put things in perspective, I threw some numbers together in some of my research looking at this, but there's about $28 trillion dollars of assets that foreigners hold, $28 trillion in dollar denominated assets that either they've issued that $11 trillion they've issued and some that they've gotten from us. And in order to compete

with the dollar, you'd have to have some other rival that can offer assets on that level. And I just can't imagine this SHC, this wonderfully term synthetic hegemonic currency, suddenly issuing that much or close to that much in terms of assets. So I don't see an easy way to break that. I mean, last time this happened was when we went from the pound to the dollar, and that required a world war, a major shift. I mean, it also required the U.S. becoming a leading industrial power, surpassing the U.K. So, network effects are strong. So, Tracy, I don't have a very optimistic prognosis on that front. It's one thing in theory to have a dollar substitute.

So let's say the IMF or some global entity had some sort of synthetic. basket, maybe it's digital, that represented some nice GDP-weighted share of different currencies, some sort of basket. But as you say, the path dependency is such, even if it were to be a nice dollar substitute from a sort of pure economic point of view, the path dependency is such as you would still need people to switch over to it. You would still need to have people get comfortable issuing bills denominated in this unit. You would still have to get people comfortable issuing debt.

I mean, we see how hard it is just to move off of, say, LIBOR to some new debt standard. It's really hard to move standards, let alone a whole currency. That's a great analogy. It is very hard when something is widely used. It's convenient. Why do I want to go to the trouble? You know, exchange the international currency, contracts are priced in dollars. Depending how you measure 50 to 80 percent of international transactions.

trade is invoiced in dollars. Why would I want to inconvenience myself by using some other currency? There has to be some kind of external push, a shock, something that really makes it worth my while, a war, you know, something serious happening in the United States. One scenario would be eventually China emerges as a country with great institutions, with great safe stores of values, but that's a long, long ways off. Maybe the Eurozone comes up with their own safe assets. That seems to be a ways off as well. And so best case scenario would be a gradual, in the absence of some kind of major shock, some kind of gradual adjustment that will take many years to go through.

So let me ask the obvious question, which would be why doesn't the U.S. just issue more debt to satisfy all this extra demand? So you alluded to the fact that in many respects, the U.S. economy is quite over-levered, and we feel uncomfortable doing it in many ways. But as we talk more and more about the potential for fiscal stimulus to lift growth, why don't we see the U.S. just take advantage of really low interest rates, lots of appetite for dollar-denominated debt, and just issue a bunch of bonds? That's a great question.

I would say to some degree we already do that, not enough, but think of like President Trump's budget deficits. The only way he got away with that is because there's such a strong appetite for our securities. I mean, this appetite lowers the financing cost, makes it easier for us to run budget deficits, so Trump can run a huge peacetime budget deficit. But I just think in general there's a lack of understanding maybe about this issue that the important role we do play. It would take a huge, I don't know, public education campaign to say, look, the world needs

our securities, we've got to issue more of them. Maybe if it was done in a thoughtful way as well. It's one thing to issue a lot more treasuries to fund maybe infrastructure, something with a good high return in the U.S. economy as opposed to funding, you know, tax cuts or wasteful spending. Right. So it'd be a complicated thing to do. But that's why people have talked about sovereign wealth funds, you know, where you'd issue treasuries or some kind of mechanism or facility where you would do something like that. But that's a long conversation in itself with the public and with Congress. Well, what about the exact opposite proposal?

And I think you're not a fan of this idea based on your writing. But we have seen a couple senators in the USA, rather than issuing extraordinary amounts of debt to satisfy the world's desire to hold safe assets, why do we just do a clean break and force the world to essentially go elsewhere to look for their safe assets? And by that, the plan is tax foreign investments. And so a couple of U.S. senators, Josh Hawley from Missouri is one of them. They're just like, you know what, the strong dollar, hey, it's hurting the world, it's hurting U.S. workers. Let's tax foreign purchases of dollar assets that should weaken the U.S. dollar, help workers,

and maybe it would be an accelerant for the creation of a new safe asset around the world. What about that plan? Just tax foreign buyers. It is well-intentioned, and it's thinking creatively and it's going in the right direction in terms of what we want to do. but I just don't think it will work. So intentions aside, what it effectively does is it reduces the supply of safe assets, at least future safe assets. You tax something, you're effectively putting gears in the sand,

you're making it harder to produce. And so we're not going to be changing. We're not going to be fixing the demand side of that equation. All we would be doing is squeezing the supply side. And so you would even make the problem more pronounced. And the analogy or the comparison I like to do, of what I think it would look like would be 2008. Because 2008, as I mentioned earlier, we had all these, what we thought were safe assets that suddenly disappeared. So there's a case where

I think of the supply of safe assets suddenly shrinking. And what happened? The dollar actually got stronger. Yields actually fell farther down. And I think we would see the same thing. If we thought this bill would see the light of day, I think you would see markets begin to realize, oh my goodness, the supply of safe assets is going to be less. Let's race to the existing ones. And you would see the dollar get stronger and yields go down. You know, we see negative rates around the world. I jokingly call this bill the bill to give negative yield curves to everyone who has safe assets. I think it would make the problem worse in short.

This might be an odd question. But to what extent is Trump's trade war with China an attempt to solve this monetary problem? So if the U.S. can't target foreign capital surpluses directly and stop the flood of money coming into its market, then I guess maybe you can sort of target the current account and try to shrink the trade deficit so that there's less money to then flood into the U.S. system. Do you think the trade war is sort of an unconscious or conscious attempt to rectify this problem? Absolutely. That's a great question. I do think, I think Trump and I think populism in general across the globe is a response to this imbalance. This is part of the problem with international monetary system.

And we see the distortions created by it. And so, yeah, I do think President Trump, he knows something's wrong. Maybe he doesn't have it quite 100% figured out correctly, but he's pushing in the right direction. He senses something's up and he's pushing back. Is it going to work? I don't think his approach is going to work. I mean, my suggestion, maybe partial fixes to be. one for the Federal Reserve to do level targeting of some kind. Now, you guys know I'm a big fan of

nominal GDP level targeting, but it doesn't have to be that. It could be price level targeting, but anything that would make up for past misses, so we know the Fed's undershot for the past decade. Imagine if it hadn't, that probably would imply a weaker dollar. Also, there's been proposed by some for the Fed to extend currency swap lines throughout the world to other major trading partners, and that might reassure some of those countries and may not need to hold on to dollar assets as much,

reduce the precautionary demand for dollar assets. Both of those moves, of course, would not be easy either. They both have costs. But they are things I think the Fed could do and I think their decisions

that Trump could endorse as well. But back to the original question, yeah, I do think Trump, he senses something's wrong and this is probably at the core of it. I think that's interesting this idea of the Fed, setting up swap lines with central banks around the world. Of course, the book crashed by Adam

2's, which is a big history of the Eurozone crisis, it really spotlighted the role of those swap lines in easing the stress, allowing the European banks to have access to dollar liquidity. And then thinking back to what you said at the beginning of our discussion here, that essentially with 70% of the global economy, either under the dollar or some peg or a soft peg to the U.S. dollar, that the world is kind of like one big Eurozone. And we see the problem with that in the euro area where you have a singular monetary policy that doesn't work for all its members. And I say it's like we keep coming back to this situation in which the world is a single de facto currency union without the currency

flexibility enjoyed by most of the countries. Yeah, that's a great point. I mean, it's the irony, right? We went off to Britain Wood's system, where it was this global fixed exchange rate regime linked to the dollar. We went off of it. And in textbooks say when you go to a world of floated exchange rates, exchange rates should adjust. But what we see in practice is something much more rigid, something much more akin to Britain Woods too. And the dollar is, again, at the core of that. It's the main currency. And, you know, to kind of flesh that analogy out like you're suggesting, it would make sense then to have currency swap lines in all the major trading partners. One reason this would be a hard sell is because it would implicitly expand the Fed's

balance sheet, all the kind of the unspoken liabilities this would imply. Now, on paper, it would necessarily mean that. It would just mean a commitment. So that would, you know, I imagine be pretty controversial before Congress. Yeah, sometimes I wonder if there had been more awareness of the the swap lines that were put in place around the Euro crisis. I mean, we were paying attention to a bunch of other stuff. But it feels like the potential for very intense political scrutiny about the Fed doing deals with foreign central banks could theoretically be problematic if the wrong people or the right people start paying attention to that.

Yeah, I would love to see this next presidential campaign, which I'm not holding my breath, to have them talk about these issues. It'd be great if someone got up and said, hey, we are the main safe asset supplier to the world. implication. There's this tripping dilemma. Hey, maybe we should have currency swap lines. We have a role to play globally. We want to balance that against our domestic concerns. Let's think through policy options. So we've been talking a lot about the downsides of a strong dollar and really the downsides of having the dollar as a sort of central figure in the entire global financial system. So maybe to finish it off, talk to us about why having a strong dollar, having the dollar as

the world's reserve currency is actually a good thing for America. Yeah, I'm glad you'd said that because I want to end on a positive note as well. The dollar is a global medium of exchange. And one could argue in its absence or in the absence of a global medium of exchange, globalization itself could not have taken off as it has over the past few decades. And we know globalization has brought with it the freeing of many people stuck in poverty. So the billion or so people who were in poverty, who are now not in poverty because of international trade, because of globalization,

you could make the argument that they're there because there was the dollar. So I think one could make a reasonable case that while there are all these costs to the dollar, the net benefit to the world has been positive in terms of liberating the poor from the shackles of a closed system. This is an absolutely fascinating topic, and you provided a really sort of clear explanation. of this phenomenon and why people are talking so much about the problems of the persistently strong dollar. Really appreciate you joining us. Thank you for having me on the show. Thanks so much,

David. That was great. Tracy, I love that conversation. I think this is just such a rich load to mine, such a fascinating topic, because the problem is fairly clear, I think, and yet the solution seems almost intractable. It's almost impossible to imagine what is anywhere close to being in position to take the dollar's place on the world stage. Yeah, you can't fight those network effects, I guess. I find it really interesting as well because it touches on a number of topics that we've talked about at one point or another on the show, things like safe assets, things like the trade war, like big capital surpluses in other parts of the world that then kind of move into the US market and end up impacting it but it does seem to be an

intractable problem and you kind of wonder you know David touched on this towards the end where he was talking about how the dollar as reserve currency has basically enabled and also grown in tandem with globalization and you do wonder if you're going to get a solution that basically looks like de-globalization right you could basically get ring-fenced financial system where China relies on the UN for all its currency dealings and the U.S. relies on the dollar and the euro relies on the euro. And that whole sort of network of financial interdependence starts to get unpicked.

You know, what's really interesting is David's term and Mark Carney used it to, and you just mentioned it network effects and the network effects of the dollar being so strong. And it's funny that Facebook is launching its own or, you know, its own currency. Libra because there are probably a lot of analogies between the dollar and Facebook itself, namely that everyone seems to hate Facebook and complains about it all the time and thinks there's all kinds of issues with it and it drives people crazy. And yet the prospect of actually leaving Facebook is really difficult. And so even if you hate Facebook and you don't like their surveillance practices and you don't like all kinds of manipulations that they do, it's pretty difficult. to leave, just like the dollar. You can identify problems with being in the dollar social trading network, but where else are you going to go? It's a really difficult problem. So kind of the way

there, more than Libra itself, there are already a lot of analogies between Facebook and the dollar. Right. Not to mention slightly monopolistic tendencies, as some commentators say. Yeah, I like that analogy. In any case, it'll be really interesting to see how this debate, evolves in the future. Like you said, at the beginning of the discussion, we've already come a long way from pre-2008. You know, the dollar is going to be replaced by the euro or the renminbi or something like that. It's going to be really interesting to see how it changes in the next few years, whether we do get that synthetic, hegemonic currency. You know who might actually have some good ideas for what could replace the dollar? Go on. Your dad. So we've got to get him on. No, I'm serious. I'm really

looking forward to that episode now. All right. I'll try to make it happen. Okay, good. Okay, this has been another episode of the All Thoughts podcast. I'm Tracy Allaway. You can follow me on Twitter at Tracy Alloway. And I'm Joe Wisenthall. You can follow me on Twitter at The Stallwart. And you should follow David on Twitter. He's great. He's at David Beckworth. And be sure to follow our producer, Laura Carlson. She's at Laura M. Carlson.

and check out the new home of Bloomberg Podcasts at Podcasts. Thanks for listening. You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris. And I'm Karen Moscow here to tell you about our new on-demand news report delivered right to your podcast feed. Bloomberg News Now is a short five-minute audio report on the day's top stories. Episodes are published throughout the day with the latest information and data to keep you informed. Yes, there are other products like this from a variety of news organizations, but they usually

rerun their radio newscasts throughout the day. That's not what we do. We create customized episodes that can only be heard on Bloomberg News Now. And we don't wait an hour to publish breaking news. When news breaks, we'll have an episode up in your podcast feed within minutes, so you're always getting the latest stories and developments. Get the reporting and the context from Bloomberg's 3,000 journalists and analysts. We're all over. the world. Listen to the latest from Bloomberg News Now on Apple, Spotify, or anywhere you listen. What separates good leaders from transformational ones? I'm Jessica Chen, and in season two of leading by example, we'll sit down with executives like Grace Chen of Bertie Gray to find out.

It's important to understand where you spike, but also really acknowledge where you don't and find people who can fill those gaps. Listen to leading by example executives making an impact on the IHeart radio app, Apple Podcast, or wherever you get your podcasts.