The demise of the dollar

[Typhoon]

FT | A (very short) history of global reserve currencies

May the BRICs achieve what they desire . . .

[Typhoon]

M. Hutchinson | Towards an un-Dollarized World

An interesting perspective on reserve currencies and property rights.

Also,

At the other extreme, [PR] China’s ambitions to make the yuan a global reserve currency are frankly laughable. [PR] China still does not trust its own citizens with free foreign exchange markets, so any relaxation in its draconian exchange controls would be highly destabilizing. Politically,[PR] China is officially a Communist country, so the political wishes of its leaders will always trump any theoretical concerns about property rights, which in any case have little meaning in the [PR] Chinese system. The [PR] China that was emerging from poverty and taking over the world by free-market means in fair competition might have sponsored a true reserve currency, but that China never actually existed – it was always a bizarre globalist fantasy.

[Heracleum Persicum]

M. Hutchinson | Towards an un-Dollarized World

An interesting perspective on reserve currencies and property rights.

Also,

At the other extreme, [PR] China’s ambitions to make the yuan a global reserve currency are frankly laughable. [PR] China still does not trust its own citizens with free foreign exchange markets, so any relaxation in its draconian exchange controls would be highly destabilizing. Politically,[PR] China is officially a Communist country, so the political wishes of its leaders will always trump any theoretical concerns about property rights, which in any case have little meaning in the [PR] Chinese system. The [PR] China that was emerging from poverty and taking over the world by free-market means in fair competition might have sponsored a true reserve currency, but that China never actually existed – it was always a bizarre globalist fantasy.

Real danger for US Dollar comes from multiple fronts


FP
A BRICS Currency Could Shake the Dollar’s Dominance
De-dollarization’s moment might finally be here


U$ Dollar has become a "political weapon" .. any nation holding U$ is in danger of "blackmail" by US

[Typhoon]

M. Hutchinson | Towards an un-Dollarized World

An interesting perspective on reserve currencies and property rights.

Also,

At the other extreme, [PR] China’s ambitions to make the yuan a global reserve currency are frankly laughable. [PR] China still does not trust its own citizens with free foreign exchange markets, so any relaxation in its draconian exchange controls would be highly destabilizing. Politically,[PR] China is officially a Communist country, so the political wishes of its leaders will always trump any theoretical concerns about property rights, which in any case have little meaning in the [PR] Chinese system. The [PR] China that was emerging from poverty and taking over the world by free-market means in fair competition might have sponsored a true reserve currency, but that China never actually existed – it was always a bizarre globalist fantasy.

Real danger for US Dollar comes from multiple fronts


FP
A BRICS Currency Could Shake the Dollar’s Dominance
De-dollarization’s moment might finally be here


U$ Dollar has become a "political weapon" .. any nation holding U$ is in danger of "blackmail" by US

To the author of the above FP article, "Speculate, much?"

[Typhoon]

Always useful to look at the actual data to gain perspective on an issue.

Wolf Street | US Dollar’s Status as Global Reserve Currency on Slow Long-Term Decline, but Not Going Down in a Straight Line

[Doc]

Always useful to look at the actual data to gain perspective on an issue.

Wolf Street | US Dollar’s Status as Global Reserve Currency on Slow Long-Term Decline, but Not Going Down in a Straight Line

yeah by all credible sources I have seen it takes a minimum of 5 years. Plus both the Russian and Chinese economies are crashing.

[Heracleum Persicum]

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Fitch downgrading U$
Asia is in essence trapped with its mountains of dollars

For one thing, it’s a reminder that faith in the linchpin asset of the global financial system is dwindling. For another, this region may be about to get burned on more than US$3.2 trillion of state wealth as Washington fiddles.

The reference here is to the titanically large stockpile of US Treasury securities held by top Asian authorities. Here too, the dynamics surrounding these historical bookends are quite different.

Twelve years ago, the conventional wisdom was that Asian central banks had the leverage. The idea was that if Washington took its top bankers for granted, they could issue history’s most spectacular margin call. This week, it’s clear that Asia is now in essence trapped with its mountains of dollars.

This explains why neither Japan, the top holder of US Treasuries with $1.1 trillion, nor China, the second-biggest with $860 million, has dumped huge blocks of dollar-denominated debt. The same goes for Taiwan ($235 billion), India ($232 billion), Hong Kong ($227 billion), Singapore ($188 billion) or South Korea ($106 billion).

There ZERO doubt, one weekend , there will be a China US Japan EU meeting, and U$ would be "devalued" BIG .. only question is "how Big"

[Typhoon]

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Fitch downgrading U$
Asia is in essence trapped with its mountains of dollars

For one thing, it’s a reminder that faith in the linchpin asset of the global financial system is dwindling. For another, this region may be about to get burned on more than US$3.2 trillion of state wealth as Washington fiddles.

The reference here is to the titanically large stockpile of US Treasury securities held by top Asian authorities. Here too, the dynamics surrounding these historical bookends are quite different.

Twelve years ago, the conventional wisdom was that Asian central banks had the leverage. The idea was that if Washington took its top bankers for granted, they could issue history’s most spectacular margin call. This week, it’s clear that Asia is now in essence trapped with its mountains of dollars.

This explains why neither Japan, the top holder of US Treasuries with $1.1 trillion, nor China, the second-biggest with $860 million, has dumped huge blocks of dollar-denominated debt. The same goes for Taiwan ($235 billion), India ($232 billion), Hong Kong ($227 billion), Singapore ($188 billion) or South Korea ($106 billion).

There ZERO doubt, one weekend , there will be a China US Japan EU meeting, and U$ would be "devalued" BIG .. only question is "how Big"

Under your scenario, it's Asia that has it's pants pulled down, forced to ben over and grab it's ankles, not the US

Japan "dumped billions" recently to try and stop the depreciation of the JPY versus the US dollar due to Japan's ongoing yield curve management.

Top mark to "Asia Times" for consistency - consistently clueless.

[Heracleum Persicum]

Japan "dumped billions" recently to try and stop the depreciation of the JPY versus the US dollar due to Japan's ongoing yield curve management.

Yen is weakening against U$ Dollar since vey very long time, I think since 30+ yrs

IMHO , this political

Western business borrow YEN with ZERO interest rate , exchange it to their own currency , and use it for finance projects .. being sure that interest rate will be kept at ZERO and YEN will be weaker and weaker when paying back

They finance the project with YEN, but revenue is in U$ Dollar

This common ..

Practically one Borrows YEN with Zero rate , exchanges to Canadian C$, buys property in Vancouver with return of 7% , and is sure YEN will be weaker and weaker paying back the YEN .. pretty much buying property with nothing down (common practice) .. same with big oil, gas, metal etc etc projects

US making ..

[noddy]

a river in egypt..

Screenshot from 2023-08-05 06-57-41.png (43.35 KiB) Viewed 5613 times

[Heracleum Persicum]

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India buys oil only In Rupees (from Arabs) and in Rubles (from Russia) ..


https://www.youtube.com/watch?v=l9bzL6YoPCc


China buys Oil from Russia and Arabs in Yuan

China and India combined import 15 m b/d Oil .. $ 1.3 Billion a day less trade in U$

[Typhoon]

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India buys oil only In Rupees (from Arabs) and in Rubles (from Russia) ..


https://www.youtube.com/watch?v=l9bzL6YoPCc


China buys Oil from Russia and Arabs in Yuan

China and India combined import 15 m b/d Oil .. $ 1.3 Billion a day less trade in U$

Brilliant.

It's doing wonders for the Russian economy:

"FT | Russia raises interest rates to halt collapse in rouble"

Central bank lifts key rate to 12% as jitters grow over the economy and currency’s weaknesses

and PR China too:

"FT | [PR] China stops reporting youth unemployment as economic pressures mount"

Central bank cuts key interest rate to lowest since 2014 as growth slows in retail sales and industrial output

The PBoC on Tuesday cut its one-year medium-term lending facility rate, which affects loans to financial institutions, by 15 basis points to 2.5 per cent. The rate, which was also reduced in June by 10 basis points, is now at its lowest level since it was launched in 2014.

Quite the confederacy.

[Typhoon]

True Blue - Hutchinson | Biden has killed the Exorbitant Privilege

of the US dollar.

Agree with Hutchinson on the current problems with the US dollar as the global reserve currency.
On the other hand, his speculations about future developments - a pee[k] into the future - come across as a bit fanciful and wishful thinking not unlike those of our own BRIC fan.

[Heracleum Persicum]

True Blue - Hutchinson | Biden has killed the Exorbitant Privilege

of the US dollar.

Agree with Hutchinson on the current problems with the US dollar as the global reserve currency.
On the other hand, his speculations about future developments - a pee[k] into the future - come across as a bit fanciful and wishful thinking not unlike those of our own BRIC fan.

sayin what I sayin since long time
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[Heracleum Persicum]

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https://asiatimes.com/2024/01/why-the-w ... -the-buck/

Why the world is turning away from the buck

Geopolitical divisions and massive US debt ensures the dollar’s future role will be more limited than any time since end of WWII

Freezing a sovereign country’s dollar holdings (Russia’s in this case) is a seismic event. It risks accelerating a move away from the use of the US dollar for trade or investment by countries that have different geopolitical interests than the US, such as China or the Gulf states.

In fact, several governments outside the West are exploring ways to reduce their exposure to the dollar. Russia is currently settling a quarter of its international trade using Chinese renminbi, and its bilateral trade with China is almost entirely settled in the two countries’ respective currencies.

[Heracleum Persicum]

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China hints at its asymmetric warfare system aimed at dethroning US dollar
For Beijing, it’s not so much about replacing the greenback within the current system but
creating an entirely separate alternative

Although the Washington elite is accustomed to acting with impunity regarding the dollar – “our currency, but it's your problem” as John Connally, a US Treasury secretary in the 1970s, once put it – such massive money creation is a sensitive point for the Chinese, which had accumulated massive dollar-denominated reserves, largely in Treasury bonds, since its accession to the WTO in 2001.

The Chinese authorities seemed to have realized that their dependence on the dollar had become a significant risk. The prospect that an increasingly dysfunctional US could debauch the currency could no longer be ignored. J. Paul Getty once quipped: “If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” In this case, China is the bank and the US is the debtor, and this is very much China’s problem.

Should Dollar value collapse , American hard assets, US company stocks, US Real Estate price will go up as they become undervalued in non Dollar terms.

That would bring massive inflation in US
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