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Discussing the Chinese yuan possibly being a threat to the U.S. dollar and hindering the ability of the dollar to be the currency of the world, Carney told the host that he believes it is “inevitable” and it is a “serious threat.”
Carney also agreed with the host that the U.S. dollar has gone through three stages since World War II: when the U.S. was the biggest economy in the world, when the dollar took over global banking, and after the fall of the Soviet Union when the “entire world more or less came under the domination of the U.S. dollar.”
However, he noted that the U.S. dollar is now “drifting away” as China and Russia are “starting to build an alternative block of currencies.”
Carney further explained that the alternative block of currencies could lead to a fractured global market of currencies in the future, like on a “Cold War basis,” with “different blocks of economies in different blocks of currencies.
