💵The End of the Dollar Era?

Bank of America analyst Michael Hartnett: a weak dollar is not just a temporary pullback, but a warning sign of the beginning of the end of American dominance.

The U.S. share of the global stock market has grown from 40% during the 2008 crisis to 67% today. In early 2024, most investors continued to bet on further dominance of American assets, ignoring the risks of recession, a prolonged bear market, and an escalating trade war.

But the situation is changing. Since the beginning of the year, we have seen growing interest in alternative directions, such as the Chinese AI giant DeepSeek and emerging markets. All this is part of a global "liberation of capital," which could initiate a new long-term bearish phase for the dollar and question the U.S.'s leadership in the world economy.

The cycles of world reserve currencies support this hypothesis. Over the past 500 years, currency hegemony has changed every 80–100 years: from the Spanish real to the Dutch guilder, then to the British pound, and finally to the U.S. dollar. Today's geopolitical and macroeconomic shifts indicate that the time of the dollar as the unrivaled global currency is logically coming to an end.