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Re: The rise of BRICS currency [Re: trapper les] #7839805
04/06/23 02:17 PM
04/06/23 02:17 PM
Joined: Dec 2013
Northern MN
O
Osky Offline
trapper
Osky  Offline
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O

Joined: Dec 2013
Northern MN
I don’t think anyone is ready when a country over 100 trillion in debt is no longer the worlds reserve currency. The lower echelons here will scratch, the very wealthy convert and do fine, but the majority in the middle will be clobbered and bear the brunt to no return.

Osky



www.SureDockusa.com
“ I said I don’t have much use for traps these days, never said I didn’t know how to use them.”
Re: The rise of BRICS currency [Re: charles] #7839808
04/06/23 02:24 PM
04/06/23 02:24 PM
Joined: Jan 2017
Marion Kansas
Y
Yes sir Offline
trapper
Yes sir  Offline
trapper
Y

Joined: Jan 2017
Marion Kansas
Originally Posted by charles
Don’t know how we can demand what currency other nations use to trade among themselves.

Just returned from three weeks in Vietnam and Cambodia. Our dollar works just fine there. Preferred over local currencies. They have no coins either.

You should educate yourself. The power of banking.

Re: The rise of BRICS currency [Re: Yes sir] #7839815
04/06/23 02:32 PM
04/06/23 02:32 PM
Joined: Aug 2010
Asheville, NC
C
charles Offline
trapper
charles  Offline
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Joined: Aug 2010
Asheville, NC
Please explain. Not sure what you are saying.

Re: The rise of BRICS currency [Re: trapper les] #7839826
04/06/23 02:41 PM
04/06/23 02:41 PM
Joined: Dec 2010
Armpit, ak
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Dirt Offline
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D

Joined: Dec 2010
Armpit, ak


Who is John Galt?
Re: The rise of BRICS currency [Re: trapper les] #7839837
04/06/23 02:59 PM
04/06/23 02:59 PM
Joined: Mar 2007
McGrath, AK
W
white17 Offline

"General (Mr.Sunshine) Washington"
white17  Offline

"General (Mr.Sunshine) Washington"
W

Joined: Mar 2007
McGrath, AK

The Dollar Rules the Financial Universe. China Can’t Change That.

COMMENTARY
By Marc Chandler
March 31, 2023 2:30 am ET


About the author: Marc Chandler is chief market strategist for Bannockburn Global Forex, a division of First Financial Bank.

The financial shocks that keep hitting the dollar haven’t shaken its role in the world economy. The reasons matter. The dollar may not be eternal. But it won’t be China that knocks it down.

The confiscation of Russia’s central bank reserves and potential plans to use them to help Ukraine were thought to cut the dollar’s attractiveness. The U.S.’s increasing reliance on sanctions and weaponizing access to the dollar have escalated the talk of alternatives. The banking failures in the U.S. renewed questions about its susceptibility to destabilizing financial crises. Meanwhile, China’s ties with Saudi Arabia have led to speculation of a petro-yuan that displaces the petrodollar.

There are two ways the dollar could lose its place in the world economy: encroachment, in which another currency supplants the dollar, as the dollar replaced sterling a century ago, or abdication, where the U.S. pursues policies that shrink back from the global role it previously sought. Concerns about China fall into the encroachment camp, but little substance exists. The more significant threat is self-immolation. Those who see the dollar’s role as an exorbitant burden, not a privilege, want to abandon it. That would be a type of financial disarmament in the great game of international influence that extends beyond prices and quantities.

China may be Saudi Arabia’s biggest customer, but there’s no sign that Saudi Arabia will price oil in yuan. It makes no sense on several levels, including that the Saudi riyal is pegged to the dollar. When the Federal Reserve changes interest rates, the Saudi Arabia Monetary Authority and several other Middle Eastern countries typically quickly match the move.

The Chinese yuan is simply not convertible. It isn’t a question of technology but policy. China’s foreign-exchange rate is closely managed and purposefully opaque. Its capital markets are developing but aren’t sufficiently transparent. Including the yuan in the International Monetary Fund Special Drawing Rights in 2015 was supposed to spark growth in yuan reserves, but as of the end of the third quarter of 2022, the yuan’s share of international reserves was about 2.75%. The yuan’s share of Swift transactions briefly rose above 3% early last year, but by February 2023, its share had slumped to about 2.2%.

Listening to some U.S. commentary about a rising yuan, you’d get the sense that America is being victimized. But China has hardly abandoned the dollar. The Asian Infrastructure Investment Bank, once considered a challenge to the World Bank, has struck a cooperative accord with it. The AIIB takes U.S. dollar subscriptions and has been joined by U.S. allies, including the United Kingdom, Germany, Australia, and Israel.

Even China’s Belt and Road Initiative, seen as a power projection exercise, cannot be divorced from the dollar. Initially, China made yuan loans, but recipients quickly swapped into dollars. So now, Chinese banks finance BRI loans with dollars.

Moreover, focusing on how oil transactions are denominated confuses the key to the dollar’s role in the world economy. It also misunderstands what has happened over the past 40 years. Put simply, if crudely, the market for money outstrips the market for goods by magnitudes.

The Bank for International Settlements estimates that the daily turnover in the foreign-exchange market is $7.5 trillion. Global trade for all of last year was about $32 trillion. The dollar is on one side of 88% of currency trades, little changed from 1989 (when the dollar was one part of 90% of currency trades). China may be the most important trade partner for more countries than the U.S., but the dollar’s role remains paramount.

The pricing of oil and many other commodities in dollars isn’t the cause of the greenback’s role in the world economy but a reflection of it. The U.S. capital markets’ depth, breadth, and transparency are its bedrock and are overlaid by its military dominance and legal system.

Nor is the diversification of reserves toward the euro, sterling, yen, or Canadian and Australian dollars a threat to the dollar. The financial sanctions on Russia were imposed broadly, if not universally, and those countries and regions are deeply entrenched in the dollar-centric world. Also, as technology has improved and reduced the barriers to entry, several new payment systems have arisen over the past couple of years. They are small and fragmented.

U.S. sanctions have created niche opportunities for unlikely alternatives, including the United Arab Emirates’ dirham, which India has begun using to pay for Russian oil. India, not China, has emerged as the largest buyer of Russian oil, and New Delhi wants to avoid the yuan, given the rivalry.

Yet the yuan’s sphere of influence is poised to expand. While the North Atlantic Treaty Organization drove eastward after the Soviet Union collapsed, China’s BRI extended its reach into the soft underbelly of central Asia. And now it seems that Russia will be in the yuan’s orbit as a cost of Putin’s Ukraine folly. Chinese companies have moved into the vacuum left by the withdrawal of Western companies. At best, a yuan bloc is in the early stages of forming to include Russia, North Korea, and Iran. They didn’t quit the dollar bloc but were fired from it. The fate of the dollar lies in Washington, not Beijing.

Barron's



Another view: Mises


Mean As Nails
Re: The rise of BRICS currency [Re: trapper les] #7839841
04/06/23 03:07 PM
04/06/23 03:07 PM
Joined: Jan 2014
North East Kansas
Marty Offline
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Marty  Offline
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Joined: Jan 2014
North East Kansas
Marc Chandler lives in manhattan, nyc and is a professor at nyu. I wonder where his political beliefs are bedded? How woke is he?


Rise and Rise Again
Until Lambs Become Lions
Re: The rise of BRICS currency [Re: trapper les] #7839847
04/06/23 03:16 PM
04/06/23 03:16 PM
Joined: Mar 2007
McGrath, AK
W
white17 Offline

"General (Mr.Sunshine) Washington"
white17  Offline

"General (Mr.Sunshine) Washington"
W

Joined: Mar 2007
McGrath, AK
He makes his money in the currency markets. I suspect he is better versed in this subject than anyone else on this forum. I really don't care where he lives or might teach. He knows where his bread is buttered.


Mean As Nails
Re: The rise of BRICS currency [Re: trapper les] #7839851
04/06/23 03:21 PM
04/06/23 03:21 PM
Joined: Jan 2017
Marion Kansas
Y
Yes sir Offline
trapper
Yes sir  Offline
trapper
Y

Joined: Jan 2017
Marion Kansas
I'm not sure he's taking into account our governments debt load, our spending of money we don't have. I believe our economy is running on hot air and if the Ballon pops it will speed up the replacement of the dollar. Throw in if China can pull off an attack on our electric grid or cyber attack on our banking system things could change pretty fast. As we stand now the dollar still stands king but our debt and spending is making us more vulnerable every day. China doesn't play games they don't think they can win and our leader can't play anything more challenging that go fish.

Re: The rise of BRICS currency [Re: trapper les] #7839855
04/06/23 03:25 PM
04/06/23 03:25 PM
Joined: Apr 2018
Delta Junction, Ak.
victor#0 Offline
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Joined: Apr 2018
Delta Junction, Ak.
" The fate of the dollar lies in Washington, not Beijing. " = we're screwed..................


Dog faced pony soldier and proud of it!
Re: The rise of BRICS currency [Re: victor#0] #7839862
04/06/23 03:33 PM
04/06/23 03:33 PM
Joined: Mar 2007
McGrath, AK
W
white17 Offline

"General (Mr.Sunshine) Washington"
white17  Offline

"General (Mr.Sunshine) Washington"
W

Joined: Mar 2007
McGrath, AK
Originally Posted by victor#0
" The fate of the dollar lies in Washington, not Beijing. " = we're screwed..................



Yes I think that is the most important takeaway from that article. It isn't just Biden. It is the whole idea of a welfare state with no rational constraints on spending.


Mean As Nails
Re: The rise of BRICS currency [Re: white17] #7839868
04/06/23 03:43 PM
04/06/23 03:43 PM
Joined: Jan 2017
Marion Kansas
Y
Yes sir Offline
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Yes sir  Offline
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Joined: Jan 2017
Marion Kansas
Originally Posted by white17
He makes his money in the currency markets. I suspect he is better versed in this subject than anyone else on this forum. I really don't care where he lives or might teach. He knows where his bread is buttered.

To make money trading currency someone else must lose it.

Re: The rise of BRICS currency [Re: trapper les] #7839869
04/06/23 03:44 PM
04/06/23 03:44 PM
Joined: Mar 2007
McGrath, AK
W
white17 Offline

"General (Mr.Sunshine) Washington"
white17  Offline

"General (Mr.Sunshine) Washington"
W

Joined: Mar 2007
McGrath, AK
So what ?


Mean As Nails
Re: The rise of BRICS currency [Re: white17] #7839877
04/06/23 03:57 PM
04/06/23 03:57 PM
Joined: Jan 2017
Marion Kansas
Y
Yes sir Offline
trapper
Yes sir  Offline
trapper
Y

Joined: Jan 2017
Marion Kansas
Originally Posted by white17
So what ?

If ur setting at a poker table do you tell the other player what the best play is when your in the hand? Only way you can win money is to have them lose some of there's. He tells people to not worry $ is strong and he bets otherwise he stands to win all they lose.

Re: The rise of BRICS currency [Re: trapper les] #7839892
04/06/23 04:08 PM
04/06/23 04:08 PM
Joined: Mar 2007
McGrath, AK
W
white17 Offline

"General (Mr.Sunshine) Washington"
white17  Offline

"General (Mr.Sunshine) Washington"
W

Joined: Mar 2007
McGrath, AK
Well first of all, I disagree that in markets someone loses when someone else wins. It can happen that way but it isn't a given.

I agree with you on the poker example.
But you believe he is telling people that the dollar is fine and then taking the opposite position. How can you know that ?

He isn't saying the dollar is strong. He is saying that the most likely way to lose reserve status is through politically foolish moves made in Washington. He is willing to risk his money on that belief. Sounds like a reasonable position to take IMO.

If we think the possum market will be strong we might set a lot more dirt holes than normal, while not setting for coon at all. We are acting on our beliefs with our resources. We might be wrong. Who is the loser.....other than the possum?


Mean As Nails
Re: The rise of BRICS currency [Re: trapper les] #7839903
04/06/23 04:29 PM
04/06/23 04:29 PM
Joined: Jan 2017
Marion Kansas
Y
Yes sir Offline
trapper
Yes sir  Offline
trapper
Y

Joined: Jan 2017
Marion Kansas
Just kind of playing the devils advocate. He's probably fundamentally correct for the most part. I think we are definitely being attacked on a financial level at maybe at a bit more risk that he probably thinks.

Re: The rise of BRICS currency [Re: trapper les] #7839914
04/06/23 04:39 PM
04/06/23 04:39 PM
Joined: Feb 2011
alberta
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spjones Offline
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S

Joined: Feb 2011
alberta
The February auction in Russia was settled in usd

Next auction is in May

Re: The rise of BRICS currency [Re: trapper les] #7839915
04/06/23 04:39 PM
04/06/23 04:39 PM
Joined: Mar 2007
McGrath, AK
W
white17 Offline

"General (Mr.Sunshine) Washington"
white17  Offline

"General (Mr.Sunshine) Washington"
W

Joined: Mar 2007
McGrath, AK
There is clearly risk, though not imminent. I have to wonder how much is being manufactured by our "media" working in conjunction with our adversaries. All of this media hype serves only China and Russia. Our political types are playing right into their hands.


Mean As Nails
Re: The rise of BRICS currency [Re: white17] #7839936
04/06/23 05:05 PM
04/06/23 05:05 PM
Joined: Jan 2017
Marion Kansas
Y
Yes sir Offline
trapper
Yes sir  Offline
trapper
Y

Joined: Jan 2017
Marion Kansas
Originally Posted by white17
There is clearly risk, though not imminent. I have to wonder how much is being manufactured by our "media" working in conjunction with our adversaries. All of this media hype serves only China and Russia. Our political types are playing right into their hands.

I agree unless the threat is that real but middle ground is probably the best bet. Unless its wrong grin Our federal government is the real scare.

Re: The rise of BRICS currency [Re: white17] #7840157
04/06/23 09:02 PM
04/06/23 09:02 PM
Joined: May 2010
MN
S
Steven 49er Offline
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Steven 49er  Offline
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Joined: May 2010
MN
Originally Posted by white17
He knows where his bread is buttered.


For sure he knows where his bread is buttered.

The Yuan won't replace the dollar.


"Gold is money, everything else is just credit" JP Morgan
Re: The rise of BRICS currency [Re: trapper les] #7840163
04/06/23 09:07 PM
04/06/23 09:07 PM
Joined: Mar 2014
Central Texas
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Joined: Mar 2014
Central Texas


המשיח הוא המלך
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