According to market expert Jim Grant, uncontrolled borrowing in the U.S. could pose a long-term threat to the dominance of the dollar, although there is a possibility that negotiations over the debt ceiling will reach a resolution soon.

Grant suggests that promises to reduce budget spending are likely to be rejected and forgotten.

The expert acknowledges that the dollar is a valuable export commodity, as its production costs are essentially nothing, and it enjoys widespread acceptance worldwide. However, he warns against taking its dominance for granted.

There are increasing expectations that the Biden administration will agree to future spending cuts in exchange for a House vote to raise the $31.4 trillion debt ceiling.

Nevertheless, it is highly unlikely that the budget deficit will shrink even if the Biden administration pledges to cut spending.

Grant believes that a decision will likely mirror the 2011 scenario when $2.2 trillion in savings over 10 years were promised, but the cumulative deficit actually increased by $11.5 trillion.

Earlier we reported that the default in the U.S. will force the world to look for an alternative to the dollar.