The dominance of the US dollar is facing challenges, highlighted by China’s new regulations on the export of rare earth minerals, essential for electronics and military applications. Analyst Luke Gromen expressed that these restrictions hinder the US military’s access to these materials, thus affecting the dollar’s backing provided by military strength.
According to Gromen, this shift shows that China possesses considerable leverage not acknowledged by many Western observers. He explained:
“If you messed with the monetary side of the rules-based global order, the US would send the military over and kick your head in. That is a big part of why Saddam was invaded, a big part of what Gaddafi was doing.”
Analyst Luke Gromen sits down with Marty Bent on the Truth For The Commoner podcast to discuss the shifting macroeconomic landscape. Source: TFTC
China produces over 90% of the rare earth materials used globally. Gromen mentioned that these new export restrictions could dramatically reshape supply chains and impact the overall monetary system.
Implications for Bitcoin and Hard Assets
Gromen has voiced that adopting a hard money standard is vital to address the economic issues the US is facing.
He advocates for Bitcoin (BTC) as a key asset for protecting wealth, asserting that continued currency inflation will lead to increased values for BTC and gold as people turn to these assets for security.
He expressed skepticism regarding the US government’s strategy to utilize stablecoins to maintain dollar dominance, suggesting they offer only a temporary solution without addressing fundamental currency devaluation.
The dollar’s trajectory indicates potential for its worst performance since 1973, with analysts from The Kobeissi Letter reporting a decrease of over 10% this year and a significant drop in purchasing power since 2000.
