Global financial markets are experiencing turmoil as tensions escalate in the Middle East. Following a coordinated U.S.–Israeli attack on Iran, investors flocked to the safest asset available — the U.S. dollar.
Stock markets plummeted, with South Korea’s KOSPI dropping nearly 20% within just two days. Private credit funds are witnessing significant withdrawals, and global investors are in a rush for liquidity.
However, there’s a larger narrative at play.
Although numerous countries are gradually stepping away from reliance on the dollar, the global economy still heavily leans on the U.S. currency. The dollar accounts for nearly 89% of worldwide foreign exchange transactions, approximately 50–60% of international payments, and about 80% of the global oil trade.
Experts caution that we are entering a very precarious phase. If the dollar’s supremacy continues to wane without a robust alternative to take its place, future crises could lead to a perilous global dollar liquidity shock.
In this video, we explore the reasons why investors consistently turn to the dollar during international crises — and the implications for the future of the global economy.
Stay tuned until the end to gain insights into why the shift away from dollar dominance might not be a straightforward process.
