Luke Gromen: The Dollar System Is Breaking — And Markets Aren’t Ready

The conversation centers on the unraveling of the post-1971 USD reserve asset status and the potential for a shift towards a neutral reserve asset system. Luke Gromen suggests that the U.S. is struggling to balance maintaining dollar reserve status with reassuring its defense industrial base, leading to a potential revaluation of gold. He also highlights China's strategic moves, such as strengthening the Yuan and imposing export bans on dual-use goods to Japan, as countermeasures against U.S. pressure. Gromen points out the complacency in financial markets regarding these developments, emphasizing the risks associated with low bond volatility and credit spreads. He also touches on the impact of AI on the labor market, suggesting it could exacerbate existing economic vulnerabilities by displacing white-collar jobs and increasing default ratios.