The Tribune

EDITOR, The Tribune

The US council on foreign Relations published and article entitled: “It Is Time to Abandon Dollar Hegemony”, on July 28, 2020. Goldman Sachs Group Inc. put a spotlight on the US economic deterioration by issuing a bold warning on 28 July, 2020 that the dollar is in danger of losing its status as the world’s reserve currency. Ratings agency Fitch on Friday downgraded the outlook for the United States to negative from stable, warning of high debt and deficits made worse by the coronavirus downturn. Gross domestic product from April to June plunged 32.9% on an annualized basis, according to the US Commerce Department. Neither the Great Depression nor the Great Recession nor any other slump over the past two centuries have ever caused such a drastic decline in the US economy.

The Bahamas’ number one trading partner is the US and most of our tourists, most of our remittance come from the US and our dollar is pegged to the US dollar. The US debt is US $ 26.6 trillion and 136.5 % of GDP. Currently, the US is borrowing 62 cents out of every dollar its spend. This situation is getting worse because US legislators are planning, at least, another trillion dollar stimulus which will be borrowed. The Bahamas has its own internal problems such as crime, corruption and poverty, but we must pay attention because a major geopolitical shift is occurring. I estimate that by the end of 2025, a new global monetary system will occur. The Bahamas and the Caribbean needs a contingency plan. The future is fraught with danger, but ripe with opportunity.

BRIAN E PLUMMER

Nassau,

August 4, 2020.