Jamie Dimon says the dollar could lose reserve-currency status if the US loses its economic and military edge
The dollar is the world's dominant reserve currency, accounting for about 57% of global foreign-exchange reserves.
JPMorgan Chase CEO Jamie Dimon warned that the US dollar could lose its reserve-currency status if the nation forfeits its economic and military supremacy. Speaking on PBS's "Firing Line with Margaret Hoover," Dimon stated that the US's economic and military strength is the foundation of the dollar's reserve status. He lashed out at the US for relying on China for critical materials, asserting that the nation made a grave error in this regard.
Dimon cited the Iran war as an illustration of the US's unpreparedness for a drawn-out conflict. He argued that if the US is no longer the strongest military power or the leading economy in the next 25 years, the dollar will lose its reserve currency status. The dollar currently holds approximately 57% of global foreign-exchange reserves, a decline from around 70% at the turn of the century.
Concerns have arisen over the potential impact of financial sanctions on the dollar's dominance, but no significant shift away from the dollar has been observed post-2022. Dimon emphasized the need for the US to strengthen its economic and military edge by reducing dependence on adversaries for essential goods. He regretted that the US did not recognize earlier that it depended on China for critical resources such as rare earths, aluminum, and certain types of steel.
The Iran war has further highlighted the US's inadequate capability to defend itself in a prolonged war, Dimon emphasized.
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