Biden Lets China Threaten The Greenback's Status As The World's Reserve Currency

So what do you think will happen and when will it happen?

You have countries like the UK and Japan that have as much debt or more (vs gdp) and have comparable or lower interest rates. Uk has had comparable trade deficit.

I don’t see any logic that when other countries start trading in other currencies vs the dollar that it will have a significant impact.

 

Any idea when the little rabbi is coming back down to Earth?

 

Time may be an illusion. There are some posts on THFSG that you may find interesting to debate science and theology.

Time Travel? Scientific breakthrough in quantum mechanics rolls back time

 

Christ was an effeminate? That's the first time I've ever heard that.

 

I’m not sure on the when. I suspect that what will happen is that when the value of the dollar drops due to lower demand on the world currency markets, we will not the levels of recovery that we have historically seen after a drop.

Demand for $ on the world market keeps the dollar strong. Lower demand plus dumbass domestic fiscal policies are not a good combination. As with most things of this nature, at a minimum we can expect higher inflation. As the last three years have clearly shown, we are far too heavily dependent in many strategic areas on imports. If China can get to a level where they can inflict pain, they will. They have clearly shown that they are willing and able to do so when the pain is not reciprocated to them.

In the end, we are in uncharted waters here. There is little to no historical data to model on. In the absence of data, it is always better to use common sense. Keeping the dollar as strong as possible and as the world’s reserve currency makes very good common sense.

 

Also, UK and Japan are not good examples to compare to. Maybe Japan of the 80’s but not for the last 25 years or so.

 

He was persecuted from day one... happens a lot these days too.

Intolerance, feigned indignation along with logical fallacy... That is how they talk to non-likeminded people.

 

I understand the theory, but the evidence says otherwise. I know you are allergic to Krugman, but he lays out some pretty compelling facts to show that the impact is not nearly what is predicted by the doomsdayers. When the world went from the pound to the dollar there was a giant collapse of inflation in the UK.

Intuitively I don’t see how Saudi and China using some other currency to buy and sell oil other than the dollar makes a difference to us.

 

Yuan tops euro as Brazil's second currency in foreign reserves

Until 2018, the yuan was absent from Brazil’s foreign reserves and now accounts for 5.37% of Brazilian central bank holdings at the end of 2022, surpassing the euro’s 4.74% share.


The U.S. dollar continues to dominate, comprising 80.42% of Brazil’s total foreign reserves in 2022.

Earlier this year, China and Brazil moved to reduce the dominance of the dollar by signing an agreement on setting up yuan clearing house arrangements that would facilitate bilateral trade and investment.

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can’t undersell how important this is. It’s small right now. But it can’t be ignored. You can’t blame Biden though. This economic war is happening whether he is here or not. And this just reemphasizes how important it is for the west to “win” in Ukraine.

 

The fact that or national debit is approaching 30 trillion dollars has nothing to do with us losing our status right?

 

Yes

 

A currency not pegged to gold is only as good as the army behind the government. I’ll take my chances with the US.

 

I’m not saying it will happen any time soon as most of the world still trusts the US to pay its bills and be stable (or more stable than anywhere else).
Like I said up thread China messes with its currency too much and does what’s fully best in the interest of the party for the world really trust them at this point.

 

Had to stop mid post but the reason winning the war matters is perception. The west has asked the world to sacrifice a lot and that has given China to pick a side and try to exert influence. If Russia wins the China block wins too. If Ukraine wins it solidifies western hegemony which means the dollar will remain king - as long as republicans in congress don’t do anything stupid. Which is optimistic.

 

Putin is 70
Zelenskyy is 45

 

One of the arguments is that being reserve currency allows us to run trade deficit. However UK and Australia run comparable trade deficits.

 

If the US ever loses its status its gonna be to the Euro. If you think it's gonna be to the yuan you probably don't follow this closely.