Goldman Sachs Group Inc. put a spotlight on the suddenly growing concern over inflation in the US by issuing a bold warning Tuesday that the dollar is in danger of losing its status as the world’s reserve currency.

With Congress closing in on another round of fiscal stimulus to shore up the pandemic-ravaged economy, and the Federal Reserve having already swelled its balance sheet by about US$2.8 trillion ($3.85 trillion) this year, Goldman strategists cautioned that US policy is trig- gering currency “debasement fears” that could end the dollar’s reign as the dominant force in
global foreign-exchange markets.

While that view is clearly still a minority one in most financial circles — and the Goldman analysts do not say they believe it will necessarily happen — it captures a nervous vibe that has infiltrated the market this month: Investors worried that this money-printing will trigger inflation in years ahead have been bailing out of the dollar and piling furiously into gold.

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