Central banks around the world have long followed this strategy. Although the US dollar rose strongly against most of the world's currencies in 2022 and was in great demand as a "safe haven" for capital, in the long term, the global reserve currency is threatened with a significant loss of its significance and status.
The trend towards a multi-polar world with multiple currency blocs is likely to become a relatively likely scenario in the coming decades.
Fiat currencies based solely on the belief that they can be exchanged for goods and services in the future are likely to continue to lose prestige.
Due to the huge debt of governments, companies and private households, it can be assumed that a massive increase in interest rates will put too much pressure on their debt sustainability.
In addition, savings should be expected to gradually lose purchasing power despite high interest rates. The point is that inflation is likely to continue to outpace bonds with relatively good credit ratings.
Although the International Monetary Fund (IMF) predicts lower inflation rates for most of the world's important economies, it is doubtful that their bond yields will compensate for the loss in purchasing power.