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Interview with Norwegian experts: US debt default will drag down the world economy

author:International Online

World Bank President David Malpass recently pointed out that the risk of US debt default further exacerbates the problems facing slowing global economic growth. Norwegian expert and business school professor Feikar said in an interview with a reporter from the main station on the 15th that the default of the US debt may lead to a recession in the United States, which will drag down the world economy.

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Professor Feikar, BI Norwegian Business School: If the US cannot raise the debt ceiling, then unfortunately, it will lead to a default on the debt. If the debt defaults, it will lead to a decline in government bonds, increased financial market instability, and a decline in economic growth, which may also lead to continued interest rate hikes in the United States and push up housing prices. The impact could also spread around the world. Therefore, of course, a default on US debt will lead to a recession in the United States to some extent, which in turn will have a negative impact on the world economy.

Norwegian expert: There will be a trend for countries to seek multiple reserve currencies

Interview with Norwegian experts: US debt default will drag down the world economy

As the shadow of US debt default is approaching and the risk of world economic development increases, more countries are aware of the harm of "dollar hegemony" and begin to actively explore the path of currency diversification. Feikal said that in the future, it will become a trend for countries to seek multiple reserve currencies.

Interview with Norwegian experts: US debt default will drag down the world economy

Feikar, professor at BI Norwegian Business School: At present, the importance of countries such as China to the world economy is increasing, and European countries have changed from currency disunity to most regions using the euro, which gives the dollar more clear alternatives as a (main) reserve currency. So whatever measures the United States takes, it will face increasing pressure. The trend in the future is likely that most countries will hold not one reserve currency, but a basket or multiple reserve currencies.

Norwegian expert: The global process of "de-dollarization" is accelerating

Interview with Norwegian experts: US debt default will drag down the world economy

Feikal also said that the exacerbation of geopolitical tensions by Western countries such as the United States has also prompted more countries to consider more reserve currencies and accelerate the global "de-dollarization" process.

Interview with Norwegian experts: US debt default will drag down the world economy

Professor Feikar, BI Norwegian Business School: In the Russian-Ukrainian conflict, the United States implemented some tough financial measures against Russia, excluding Russian banks and companies from the Worldwide Interbank Financial Communication Association system and freezing Russian assets in the United States. Now the rest of the world realizes that if we do something that America doesn't like, the United States will treat us the same way. So the dollar rate hike and the United States' approach to Russia have made the world consider whether it should hold other reserve currencies (other than the dollar).

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