While Brazil, Russia and China have called for an alternative reserve currency to the dollar, that’s not going to happen anytime soon.
So says Goldman Sachs Chief Economist Jim O’Neill.
“I find it quite ironic when they make these statements,” he tells Bloomberg TV, “because the alternative from the dollar has got to come from the BRIC countries.”
India is the fourth country of the so-called BRIC nations, the four largest emerging economies.
“That requires them to do more, in particular China, to allow their currencies to be used,” O’Neill says.
“In terms of replacing the dollar, until these guys are happy to have their currencies used and invested in by other people around the world, it doesn’t really mean much.”
O’Neill sees the U.S. economy returning to growth this year, but not strong growth.
“I think because of the overhang of consumer debt and the consequences of the housing bubble bursting, it’s going to be very difficult for the U.S. consumer,” he says.
“That’s probably going to constrain the U.S. economy itself. So I don’t think we can look for the same sort of leadership from the U.S. economy for the world that we’ve had the last few years.”
As a result, he says, “I think governments should be careful” about curtailing stimulus.
Many agree with O’Neill’s view on the dollar. "I think the dollar is the dominant currency for a while to come,” hedge fund icon George Soros tells CNBC.
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