They don’t have a solid backup plan—the truth is, the world still heavily relies on the U.S. dollar and the Fed’s liquidity swaps to keep the financial system moving.

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The fear is palpable because, without these swaps, there’s no other reliable system in place to provide that kind of global stability. It’s a catch-22: central banks need the U.S. to keep stepping in, but they also can’t afford to rely on it forever.

They fear a moment of reckoning, where the trust in the Fed’s commitment to support markets could collapse overnight, but at the same time, there’s no easy alternative. The reality is, the fear is more about the unknown—what happens if the Fed pulls back and there’s no substitute? The world might have to shift to other reserves over time, but nothing is as liquid and widely accepted as the U.S. dollar right now.

So, in a sense, it’s more of a fear of what happens when the rug is pulled out—but deep down, they know there’s no real alternative at this point. It’s a house of cards that could fall if the Fed decides to take a step back. Their concerns are real, but there’s no real better option. This is more about keeping the system going as it is, because the alternatives are far too uncertain.