Dollar Bomb Ticking Faster and Louder

When I uploaded my post “Dollar Bomb Can Burst Any Time” on August 24, 2020, only a few took it seriously. Five years later, the warning sounds louder — and far more credible — as de-dollarization gains momentum across continents. The same excesses once confined to American finance have now evolved into a global geopolitical fault line. 

The warning signs are flashing brighter than ever. The scale of money creation in the United States has reached alarming proportions. With public debt now exceeding US$35 trillion and fiscal deficits continuing to mount, the Federal Reserve faces a trap of its own making. Keeping interest rates high risks plunging the economy into recession, while lowering them could reawaken inflation. Either way, the era of cheap money that once fueled global dominance of the dollar is drawing to a close.

Now critics openly say that the so-called “resilient” US economy rests on shaky foundations. Growth is being financed not by productivity, but by unprecedented monetary expansion. More than 60 cents of every dollar the federal government spends is borrowed or printed. This illusion of prosperity masks structural decay — the same speculative excesses and fiscal irresponsibility that triggered the 2008 financial crisis, now magnified many times over.

The repercussions are no longer confined to American borders. A growing number of countries are openly challenging the dollar’s hegemony. The BRICS alliance — now expanded to include energy-rich nations like Saudi Arabia and the UAE — is laying the groundwork for a new trade settlement system that bypasses the US financial network. China is leading the charge, pushing for the yuan in energy transactions and bilateral trade, while Russia and Iran have turned to local currency arrangements to circumvent sanctions.

The Gulf states, long considered the backbone of the petrodollar system, are quietly rethinking their dependence on the greenback. Deals between Beijing and Riyadh to price oil in yuan have sent shockwaves through Washington. Once the world’s major energy producers start accepting payments in other currencies, the dollar’s status as the global reserve currency will erode faster than expected.

The US, meanwhile, continues to export inflation through its fiscal recklessness. Ordinary Americans face rising living costs, while policymakers keep resorting to debt-financed spending. Analysts warn that if confidence in the dollar falters, the US could face a sovereign debt crisis of its own — one that no amount of printing can avert. When foreign creditors and central banks begin to question Washington’s ability to repay without devaluation, the “safe haven” myth collapses.

Gold purchases by central banks have surged to multi-decade highs, underscoring a quiet but steady return to real assets. The shift is not just financial — it is geopolitical. The world’s emerging powers are building an alternative order that no longer depends on US control of money, trade, or technology.

If the dollar bomb bursts, the consequences will be global and enduring. Markets will convulse, commodities will reprice, and the old financial hierarchy will crumble. The illusion of endless American solvency will fade — replaced by a multipolar monetary world, one no longer bound by the dictates of Washington.