In the last issue of Chartbook, I went back and forth with Robert Armstrong and Ethan Wu of the FT’s Unhedged over Larry Fink’s comments about the Ukraine war and the end of globalization. All these “alternatives” to the dollar are, in fact, underpinned by dollar swap lines. I don’t find it convincing to claim that a greater use of Australian dollars or South Korean won in foreign exchange reserves amounts to a watering down of dollar hegemony. I discussed Eichengreen et al’s findings about diversification of reserve holdings away from the dollar in Chartbook 106. My bet is that the current system has huge inertia and is tied down by gigantic network economies. The other is geopolitics and the power of the dollar. One is the question of supply chains, which poses profound questions about the relationship between the monetary and the real economy. To distinguish this less literary genre let me call it Fin-Fi for short, as in Sci-Fi or Cli(mate)-Fiction.Īt the current moment, two lines of questions dominate these narratives. What I mean to refer to in using the terms is the less literary, more speculative variety of writing - by analysts and other authors of non-fiction - about possible future scenarios for the world economy and its financial system.

When I googled finance fiction, I discovered that since 2008, finance fiction and the finance novel has emerged as respectable genres of literature. It has spawned a genre of future-orientated Finance-Fiction all of its own. What is the future of the dollar-based financial order in light of Russia’s invasion of Ukraine? Are we entering a new financial and economic regime? Will it be a regime of inflation? How safe are US Treasuries as a vehicle for investment?Ī lot of folks are struggling with these questions right now.

Stand For Ukraine by Trinity Wood