Weekly Geopolitical Report – Weaponizing the Dollar: The Nuclear Option, Part II (September 23, 2019)
by Bill O’Grady
In Part I of this report, we reviewed the U.S. current account problem and examined how the persistent deficit affects the economy. We also discussed how the U.S. current account deficit is tied to American hegemony and ways the deficit could be addressed.
This week, using the background established in Part I, we will introduce the Competitive Dollar for Jobs and Prosperity Act (CDJPA). Along with details of the proposed law, we will discuss the macroeconomics of the CDJPA and how it would affect the dollar’s reserve currency status. We will then examine the potential political effects of the bill, the likely retaliation from foreign nations and, as always, conclude with potential market ramifications.