[BrianC]

Suddenly Everyone Is Hunting for Alternatives To the US Dollar (bloomberg.com) 81
Posted by msmash on Friday December 30, 2022 @10:00AM from the growing-concern dept.
King Dollar is facing a revolt. Tired of a too-strong and newly weaponized greenback, some of the world's biggest economies are exploring ways to circumvent the US currency. From a report:
Smaller nations, including at least a dozen in Asia, are also experimenting with de-dollarization. And corporates around the world are selling an unprecedented portion of their debt in local currencies, wary of further dollar strength. No one is saying the greenback will be dethroned anytime soon from its reign as the principal medium of exchange. Calls for "peak dollar" have many times proven premature. But not too long ago it was almost unthinkable for countries to explore payment mechanisms that bypassed the US currency or the SWIFT network that underpins the global financial system.

Now, the sheer strength of the dollar, its use under President Joe Biden to enforce sanctions on Russia this year and new technological innovations are together encouraging nations to start chipping away at its hegemony. "This will simply intensify the efforts in Russia and China to try to manage their part of the world economy without the dollar," said Paul Tucker, a former deputy governor of the Bank of England in a Bloomberg podcast. Writing in a newsletter last week, John Mauldin, an investment strategist and president of Millennium Wave Advisors with more than three decades of markets experience said the Biden administration made an error in weaponizing the US dollar and the global payment system. "That will force non-US investors and nations to diversify their holdings outside of the traditional safe haven of the US," said Mauldin.
https://www.bloomberg.com/news/articles ... tion-drive

[BrianC]

free link
https://www.yahoo.com/now/suddenly-ever ... 00587.html

[Tanada]

I don't see this as sudden at all, different nations have been easing off on their commitments for a decade or longer by this point in time.

[Outcast_Searcher]

I don't see this as sudden at all, different nations have been easing off on their commitments for a decade or longer by this point in time.

For the literally 50 years I've been paying attention, many people and economic entities have been:

a). Seeking alternatives to the dollar. (The details change but the overall fact remains).

b). WHINING about the direction of the dollar, whether up or down (which I found hilarious, even as a teen).

[ROCKMAN]

Outcast: Yes, more palatable to blame the US then their own economies/gov. LOL

[careinke]

The problem with countries who do try and find an alternative to the U.S. Petrol dollar is:

1. The U.S. will destroy your country through war.
2. Kill the leader of the country.

Not necessarily in that order.

Some examples:

Lebanon, Syria, Iraq, Afghanistan, Yemen, Iran, and Libya.

Peace

[Peak_Yeast]

Sorry for being blind...

[theluckycountry]

The problem with countries who do try and find an alternative to the U.S. Petrol dollar is:

1. The U.S. will destroy your country through war.
2. Kill the leader of the country.

Yes, that has been the history of the last 80 years. But now the US empire is on it's last legs and the BRICS collectively are stronger militarily, natural resource wise, and through China control the bulk of the modern industrial base.

In the "West" people are stressed about "the" Ukraine, about oil and gas shortages, but the BRICS are singing, knowing their time has come. Kicking Russia out of SWIFT was the biggest mistake the West made, it's forced the opposition's hand. The only thing the West controls now is money creation and they have made a complete mess of that. Once Iran and Saudi Arabia join the BRICKS it will be game over I believe. That's why the war, there are always big wars as an empire fails and the power shifts to the new empire.

Look at the desperation over the Ukraine, it smacks of the WWI efforts of Britain to maintain control of its empire. It wasn't the death of an arch duke that started that one, it was Germany's construction of the Berlin-Baghdad railway that threatened the UK dominance on oil shipments across the high seas.

https://www.globalsecurity.org/military ... hdad-3.htm

[theluckycountry]

The alternative to the US dollar is a gold backed currency, it's why Russia and China have been buying up every ounce on the planet for nearly 20 years. It was the US gold backed currency that brought stability after WWII, and it worked fine up until 1970 when the reneged on the agreement. That caused the massive inflation of the 70's and the US has been losing ground ever since.

[AdamB]

The alternative to the US dollar is a gold backed currency, it's why Russia and China have been buying up every ounce on the planet for nearly 20 years. It was the US gold backed currency that brought stability after WWII, and it worked fine up until 1970 when the reneged on the agreement. That caused the massive inflation of the 70's and the US has been losing ground ever since.

Indeed. We lost ground right into the position of remaining global superpower, and have been there ever since. If ever there was a nice place to lose ground to, that would certainly be it.

The new century will be an interesting matchup between us and the Chinese I imagine. Thank goodness New Zealand is still a free country with a beautiful country and a hardy and intelligient people, and built a modern economy not based on kowtowing to the Chinese. Other nearby islands obviously haven't fared so well, probably learning to speak Mandarin while lamenting their generic heritage that landed them in the spot they are in.

[AdamB]

As the world moves away from the U.S. dollar as a world reserve asset, dollars will be dumped globally, causing a “tsunami of inflation” in the United States as the currency returns to American shores. Interest rates will rise accordingly, followed by a “collapse” in asset prices, which would be used to usher in Central Bank Digital Currencies (CBDCs) and The Great Reset.

As the world moves away from the U.S. dollar as a world reserve asset, dollars will be dumped globally,

[theluckycountry]

China And Brazil Strike Deal To Ditch The US Dollar

According to the Brazilian government, China and Brazil have reached a deal to trade in their own currencies, ditching the United States dollar as an intermediary entirely, AFP reported.

The deal, Beijing’s latest salvo against the almighty greenback, will enable China, the top rival to US economic hegemony, and Brazil, the biggest economy in Latin America, to conduct their massive trade which amounts to $150 billion per year, and financial transactions directly, exchanging yuan for reais and vice versa instead of going through the US dollar. In doing so China extends its bilateral, USD-exempting currency arrangements beyond countries such as Russia, Pakistan and Saudi Arabia to now include the Latin American exporting powerhouse.

https://www.zerohedge.com/markets/china ... -us-dollar

The de-dollarization of the world is gaining traction at a furious rate. At some point, quite soon I imagine, hoards of money kept abroad will benign to flood back in the US, buying whatever they can, but not US Bonds, which are liked to the fate of the $US. This of course will result in over the top inflation for those trapped in the US system, primarily Americans. What alternative will the nations use for trade? Already the major players are switching to the Russian and Chinese currency, all it would take would be for these two to institute a gold backed currency, which they are well prepared for, to give full legitimacy to an alternative.

[jato0072]

“How did you go bankrupt?" Two ways. Gradually, then suddenly.” ― Ernest Hemingway

[theluckycountry]

In the Heart of Destitute America
https://www.youtube.com/watch?v=f78ZVLVdO0A

[AdamB]

In the Heart of Destitute America
https://www.youtube.com/watch?v=f78ZVLVdO0A

In the heart of destitute Australia.

You would think the ChiComs would take better care of the citizens in their colonies.

I will also add that the video Lucky referenced was an excellent indictment on poverty in America, not quite the real poverty I am familiar with in Appalachia, but more modern poverty in America, which the video casts as primarily related to housing cost and availability.The Appalachia section was somewhat lacking in terms of my personal familiarity with it.

[evilgenius]

The problem with countries who do try and find an alternative to the U.S. Petrol dollar is:

1. The U.S. will destroy your country through war.
2. Kill the leader of the country.

Yes, that has been the history of the last 80 years. But now the US empire is on it's last legs and the BRICS collectively are stronger militarily, natural resource wise, and through China control the bulk of the modern industrial base.

In the "West" people are stressed about "the" Ukraine, about oil and gas shortages, but the BRICS are singing, knowing their time has come. Kicking Russia out of SWIFT was the biggest mistake the West made, it's forced the opposition's hand. The only thing the West controls now is money creation and they have made a complete mess of that. Once Iran and Saudi Arabia join the BRICKS it will be game over I believe. That's why the war, there are always big wars as an empire fails and the power shifts to the new empire.

Look at the desperation over the Ukraine, it smacks of the WWI efforts of Britain to maintain control of its empire. It wasn't the death of an arch duke that started that one, it was Germany's construction of the Berlin-Baghdad railway that threatened the UK dominance on oil shipments across the high seas.

https://www.globalsecurity.org/military ... hdad-3.htm

There is only one problem with your calculus. When it comes to most resources that impact upon the coming electric future, all that the US has to do is reverse its Wilderness Area policy. If they re-open those areas for exploration and mining, the problem would go away within five years.

Alright, maybe five years is a little optimistic, but the old timers did amazing things in that amount of time. The US has the right capitalistic model, though, that of private ownership over national ownership of natural resources. There is no, nor could there currently be any, US national oil company. Probably, there won't be one for lithium either.

You are not thinking about the United States in what we might call an economic war footing. It's like this, when we compare the rest of the world to the US the US is a lot like GM was historically for the US auto industry. GM set the pricing structure for models, options and other things. They didn't necessary do that because they were the biggest, but because they could manufacture for the cheapest price. The other car makers occasionally found out the hard way what it means to compete against that sort of thing. They learned to cave. When it comes to most resources, the only possible competitor with the US is probably some kind of unified Africa. The US is that rich. A lot of it is political, due to organization, but a lot of it is about how many resources there are too.

Bringing up the electric future does highlight your point, though. Breton Woods relies upon oil consumption to function efficiently. It wasn't conceived in a world where people could possibly produce their energy locally. The successful renewable world was not even a dream. It might be wise to revisit the order. Otherwise, it risks imposing a greater order, high levels of ownership that don't need to exist, upon the situation. To continue to ask energy to order the world might impose that, when energy has evolved into something that can be more local. Breton Woods works against you having panels on your roof and recharging your car with them. Well, not you, but them. It puts a strait jacket on going local that way. It wants levels of ownership to exists which you still have to pay. It wants a subscription model!

[theluckycountry]

There is only one problem with your calculus. When it comes to most resources that impact upon the coming electric future, all that the US has to do is reverse its Wilderness Area policy.

How much oil is there in these areas? Oil is the limiting factor, economically at least.

The mistake that most people today make is that they assume that government and big business want them driving. But the covid lockdowns proved that isn't the case, not anymore. And if you can get 100 million cars or more off the roads of America imagine what you can save in infrastructure maintenance. Our way of life will end with the end of oil. It will happen, and sometime between now and the next 100 years all this, all these cars, these expensive bridges and paved highways will all be abandoned because they were all built with oil.

[theluckycountry]

Last week Brazil, this week Malaysia. It's like dominos, these countries smell something, or know something and they are getting OUT of the $US before it becomes worth-less.

Malaysia To Dump US Dollar | China Backs “Asian Monetary Fund”
https://www.youtube.com/watch?v=4lR8fCenE2A

[evilgenius]

There is only one problem with your calculus. When it comes to most resources that impact upon the coming electric future, all that the US has to do is reverse its Wilderness Area policy.

How much oil is there in these areas? Oil is the limiting factor, economically at least.

The mistake that most people today make is that they assume that government and big business want them driving. But the covid lockdowns proved that isn't the case, not anymore. And if you can get 100 million cars or more off the roads of America imagine what you can save in infrastructure maintenance. Our way of life will end with the end of oil. It will happen, and sometime between now and the next 100 years all this, all these cars, these expensive bridges and paved highways will all be abandoned because they were all built with oil.

Yesterday, I was driving back from enjoying my hobby of rock hounding, when I noticed a Rivian behind me. I enjoyed the chance to see one of those things. It was about the fifth time, I think. You know, it was riding on rubber tires, the same as any ICE vehicle. The pathways of the future, at least the immediate future, appear to still converge around rubber tire infrastructure.

There may or may not be much oil in the sort of closed off areas I brought up, but there is a lot of rare earth metal. It is nonsense that the US, or the West in general, has to kowtow to economic conditions around rare earths that amount to a sort of blackmail. People are dying in the DRC because what they have is not only valuable, but the market is set up for them so that they have unusual influence. It is that way so that the US can have wilderness areas. It's just like how the biggest danger to the illegal drug business is not law enforcement, but drug legalization, to use a more modern metaphor.

[theluckycountry]

Macron Says Europe Should Reduce Dependence On US Dollar, Seek 'Strategic Autonomy'



This comes on the back of "France Taps Emergency Fuel Stocks as Strikes Hobble Production"

It's one thing for a nation like Brazil or Saudi Arabia to thumb it's nose at the "Rule based order" of the $US, it's quite another when a stalwart of the coalition of the willing puts out rhetoric like this.

The nations are not stupid, they know the US is just about run its course as the world's figurehead/ reserve banker, and like a game of musical chairs no one wants to be the last one standing when the bucks and bonds need to be sent back home. I think beneath the surface there is a lot of anger in Europe because it was sucked into this phoney war in the ukraine. They really couldn't care less about what happens there and they are not happy about being impoverished just because the US wants to continue the cold war right to the very end.