The rapid financing of the AI boom through massive corporate debt issuance is creating significant stress on global financial markets. This influx of private capital forces competition with government Treasury bonds, as AI companies offer higher yields than equivalent sovereign debt, thereby pushing up long-term interest rates. While this signals strong investment demand for AI, it raises concerns about systemic risk and the potential destabilization of core bond markets. Policymakers must navigate the tension between fueling critical technological growth and maintaining stable public borrowing costs to prevent a financial crisis.
The dollar will decline, not fall
English Summary
The dollar will experience gradual decline rather than sudden collapse in global dominance, following the historical pattern of sterling's century-long transition. While the dollar faces emerging rivals like the euro (which already invoices more trade) and renminbi, deep structural entanglements and universal holdings make rapid displacement unlikely. The decline will be punctuated by periodic crises rather than steady erosion, similar to sterling's 1931, 1949, and 1968 shocks. Policymakers should prepare for managed transition and coordinated global monetary adjustments to avoid destabilizing disruptions.
中文摘要
美元的全球主導地位不會經歷突然崩潰，而是會像英鎊經歷的百年過渡一樣，呈現逐漸衰退的趨勢。儘管美元面臨歐元（目前貿易開票額已超過美元）和人民幣等新興競爭對手，但其深層的結構交織性與普遍持有性使得快速取代的可能性較低。其衰退不會是平穩的侵蝕，而是會以週期性的危機為節點，類似於英鎊在1931年、1949年和1968年所經歷的衝擊。政策制定者應為管理式過渡和協調的全球貨幣調整做好準備，以避免造成不穩定的衝擊。
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