The recent decoupling of Saudi oil from the U.S. dollar and the non-renewal of the expiring agreement has been a hot topic in domestic media. However, the authenticity of this news is yet to be further confirmed, which can be checked online. In today’s information-saturated world, more and more unverified messages infiltrate our daily lives. Without verification, these messages could affect our judgment, so I usually confirm significant news from multiple sources, especially comparing domestic and foreign media.
Even if the decoupling of Saudi oil and the U.S. dollar were true, it would indeed affect the dollar’s status in the energy and basic materials sectors. On the other hand, with the rise of emerging technologies like artificial intelligence, the dollar is increasingly playing a dominant role in the technology sector. NVIDIA’s chips are a prime example. For at least the next few years, they will be the ‘oil’ of the tech sector, requiring dollars for purchase, and not just anyone with money can buy them—it also depends on U.S. government approval for NVIDIA to sell to buyers.
Interestingly, the U.S. market has seen the emergence of an “anti-NVIDIA” alliance—several giants have started to jointly develop AI chips in hopes of breaking NVIDIA’s monopoly. Moreover, some U.S. government departments have set their sights on NVIDIA, questioning whether its monopoly position affects free market competition.
This mechanism, which seems like “self-defeating,” actually stimulates competition and is a very important mechanism to protect innovation and create a fair environment for businesses. Therefore, I believe that more NVIDIAs are likely to appear in the U.S. in the future, further strengthening the dollar’s hard currency status in the technology field.
Regarding the hegemony of the dollar, I have written articles before. Compared to gold, the dollar has undoubtedly been devaluing, but its monopoly position among all currencies worldwide has not changed. In our lifetime, its monopoly may weaken but will not be lost.
As for interest rate cuts, normally, the anticipation before a cut is what truly belongs to the financial market. When the cut actually happens, it should be a bearish realization rather than bullish because of increased money supply, as financial markets always discount expectations.
Regarding the effects of interest rate cuts/hikes, I have written in previous articles. Financial markets often look at expectations, but I don’t believe that the realization of news is necessarily bearish. Perhaps at the moment, day, or week of realization, it may be bearish, but over a longer period, it will gradually show significant effects on the investment market.
For example, consider a porter carrying a 100-pound burden who is exhausted. His employer tells him that if he walks another 100 meters, 10 pounds will be removed, leaving him with 90 pounds. He would definitely be happy to hear this. After walking the 100 meters and actually having 10 pounds removed, I believe he would be even happier. If another 10 pounds were removed after another 100 meters, his spirits would lift, and he would stand taller.
This effect would be genuinely reflected on the porter. Similarly, the expectation of an interest rate cut excites the market, but the actual action of the cut will let the market see tangible results.
