The rise of BRICS currency

https://www.firstpost.com/explainer...r-trade-india-china-russia-12403612.html

Chinks are gonna sanction you.

they will go to war to keep the petrodollar..but the path toward that is obvious to some of us already. others think it is all a-ok.

gold&silver hit 52 week high today.

Malaysia’s Prime Minister Anwar Ibrahim announced yesterday that the country will no longer rely on the US dollar to attract investments. Also, he stated that negotiations between Malaysia and other countries will take place using both parties’ respective national currencies.

https://www.msn.com/en-us/news/worl...3898f9ce1443ab9e3a84fa8bd6e137&ei=34

The end of US dominance. We had a good run. I'm ashamed the fall is happening on my watch.

lol

Do you think the BRICS currency is a BS scenario Steven?

Or are you lol because the fall started way before our watch?

Not trying to pry, just really appreciate your input. Chancey

Nobody was watching and nobody cared until it's now a real possibility. This ball started rolling in 1933 and was put into high gear when we abandoned the Breton Woods agreement in 1971.

Sure glad I got me some pre-64 dimes and quarters!

Gold is 1.5 percent from it's all time high, silver is strong, that is with the DXY market at 102. where will metals be when the DXY goes back into the 80s.

Oil?

I lost all mine in a boating accident, ammo too.

Not sure what DXY means, but I think I am going to buy me some grams of gold, but aint gonna pay over $65 for it.

HA!

DXY is the dollar market. The dollar is relatively strong right now

President of Kenya said the other day as he and his staff laughed. If you deal in dollars or manage dollars you should be very careful in the next few weeks. I’m paraphrasing his statement. Kinda got my attention though

Hair Sniffer will sell this country to China or Russia for his 10 percent. He is doing it now. Even our allies no longer want anything to do with him.

I don't either......jk

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.

Like we always did. Go to war.

We sent all our weapons and ammo to Afghanistan and then Ukraine. We don't have much left to fight with.

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

You should educate yourself. The power of banking.

Please explain. Not sure what you are saying.

What is a reserve currency

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

Marc Chandler lives in manhattan, nyc and is a professor at nyu. I wonder where his political beliefs are bedded? How woke is he?

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.

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.

" 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.

To make money trading currency someone else must lose it.

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.

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?

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.

The February auction in Russia was settled in usd

Next auction is in May

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 Our federal government is the real scare.

For sure he knows where his bread is buttered.

The Yuan won't replace the dollar.

https://www.kitco.com/news/2023-04-06/Texas-moves-to-create-gold-backed-digital-currency.html

I think it’s a good thing if actually true.

No, I doubt it will replace it-- I don't think the Chicoms really want that either, too much pressure on them-- but the RoW can certainly make it more painful on us by using less USDs.

If people didn't watch Tucker Carlson on Weds night, they should. A couple of key points, "making too much of it" and "weaponizing it". 2022 wasn't the first year that the U.S. government has used the USD as a weapon but perhaps it was the brick in the pile that helped start flipping the turtle over.

https://www.youtube.com/watch?v=1t9Cr88sAbk

As for printing too much of it, an interesting graph I found last night. I don't have the software here (and too lazy to do my own math skills), but if asked to make 3 similar sub-graphs out of this one, it would probably show 1990 to 2008 as the first one, 2008 to 2019 as the second, and 2019-2022 as the last. Since 2019, 36% of the total national credit card has been added. Unsustainable, as we are starting to see.

https://www.statista.com/statistics/187867/public-debt-of-the-united-states-since-1990/

And if permanent DC thinks they are the only ones that can cause financial pain around the globe and are immune from payback, I saw this the other day. The Rus and the Saudis planning on tightening the global oil supply come mid-summer. Just about the time the recession bubbling just below the surface here probably blows open hard and hot. Make sure your "seatbelt" is in good working order, things may get a way bumpier later this year...

And I know that a cut of 1.5 mbd isn't much of the global consumption but it might depend on where it hits. I doubt the Rus will be cutting their oil trading with the Chinese or Indians but perhaps the 1.5 mbd is a starter level for OPEC+..

https://www.statista.com/statistics/271622/countries-with-the-highest-oil-consumption-in-2012/

Was just reading that Russia is moving troops and military hardware into Syria combined with the " hot war with the U.S. " rhetoric from Russia. Seem's like there will be some confrontation in Syria over U.S. troops " guarding " the Syrian oil fields. Also was reading that Israel is currently bombing the Gaza strip, things are getting pretty hot in the middle east. I don't remember who predicted it but they were saying that they thought WW3 would start in the middle east......perhaps, perhaps, perhaps.......................

^^This is the real story that will affect us all.

Instead, the news is talking about whether trump paid a hooker off or not.

I would imagine that his bread is buttered by woke. I would speculate his articles would correspond to woke ideology/thought/action. But maybe not....maybe the article is exactly what he really thinks without any woke influence.

I see Bitcoin is rising....up to $28,000, from down to as low as $16,000 a few months ago, after a couple of banks collapsed....I sense a co-relation.

Iran is in on it to.

Well I haven't read a lot of his writing but everything I have read seems like straight forward market commentary. Not even a mention of politics or culture.........maybe I just overlooked it.

http://www.marctomarket.com/2023/04/good-friday.html

Woke, not woke it doesn't matter. All he knows is what he knows. People have forgotten what a free market really is. His bread is buttered by the FED and. USG continuing monetary policy as they have.

The dollar is in dire straights.

Would that be like .....Money for Nothing ?