Deutsche Bank said that the world would de-dollarize at a faster rate than expected.

Reference Message Network reported on April 11 according to a report on April 9 on RT.com, George Saravelos, global foreign exchange research director of Deutsche Bank, warned that the standoff between the US and China could escalate into a "full-scale financial war", and the global financial system is entering the "unknown territory".

In a report sent to clients on April 9, Saravelos issued this warning, which was cited by multiple media outlets. Saravelos has repeatedly warned of an impending dollar crisis and the global loss of confidence in the dollar. He described the current situation as a "collapse" of the market.

He said: "We are witnessing the simultaneous decline of all American assets, including stocks, the dollar, and bonds. We are entering uncharted territory in the global financial system."

Saravelos warned that global markets are de-dollarizing at a faster pace than expected, and it is unclear whether "this process can proceed in an orderly manner." He pointed out that the current situation seems different from "previous crisis environments," with markets not "hoarding dollar-denominated assets," but rather "dumping dollar assets." Saravelos added that actions taken by the Trump administration have been "prompting market selling of U.S. Treasury bonds."

Saravelos warned that given Trump's extreme tariff policies, which leave little room for the trade war to evolve gradually, the U.S.-China trade war may have significant impacts on the global economy and could potentially escalate into a "full-scale financial war." Beijing now "retains the possibility of weaponizing its currency," while also sending a stronger signal to support its domestic economy.

In his report, he said: "The next phase could be a full-scale financial war involving China's dollar-denominated assets, including those held by the U.S. government and the private sector. It should be noted that such a war will have no winners: it damages the interests of both holders and debtors of dollar assets. The loser will be the global economy." (Translated by Pan Xiaoyan)

Original article: https://www.toutiao.com/article/7491990776218518054/

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