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. As OZY profiles the #blackswans
that could throw a wrench into the economy and spark the next major recession, the ongoing trade war between the U.S. and China is top of mind. And while current tariffs alone won’t plunge the U.S. into recession overnight, the risk of retaliation is high. One of the most powerful cards in China’s playbook? Currency. As the world’s largest oil importer, if China switched from dollars to yuan to pay its oil-sector suppliers, dollar demand in these contracts would fall by $876 billion, potentially triggering a historic depreciation of the dollar, according to Global Risk Insights. Though unlikely, such an event could bring about the downfall of ‘King Dollar’ — the U.S. currency makes up 64% of central bank forex reserves, more than 85% of forex trading, and nearly 40% of all debt in the world. “The bigger they are, the harder they fall,” says GRI’s Jeffrey Moore II. 🇺🇸💵🇨🇳💴
Thanks for the insight, @justinbieber.
To learn more, follow the link in our bio to read the story we wrote on this potential economic bombshell, and other black swans that could derail the economy.
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