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De-dollarization: Is the US dollar losing its dominance? (2025)

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Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#411

Post by jacquesm »

GnarfGnarf wrote: post #275
parsimo2010 wrote: post #138

Earlier quoted context omitted.

As time goes on, fewer people are alive that predate the EU and more people will perceive it as a lasting institution. Additionally, we've now seen the EU survive the departure of a major economic power (the UK). More people are certainly willing to believe in the stability of the EU now. Another major currency is the Yuan, and some countries may be as willing to trade in Yuan to improve relations with China, so perh…

The UK was not part of the Euro economy.

It is not counted as such but it is very much tied to it and for the most part goes up and down with the Euro economy barring some own goals.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#412

Post by saulpw »

russdill wrote: post #374
legitster wrote: post #175

It's no secret that our current US administration is envious of China. So in no small part they probably want to model the US Dollar after the Renminbi. Drop the value internationally to incentivize American exports, and manipulate the hell out of it. (Hence why they have dropped inflation as a political issue - some in the administration are essentially rooting for inflation to get much, much worse). It should go wi…

We print money, send it around the world, and the world sends us goods. It was a great thing.

For us individually. For us collectively it was a horrible thing. We lost the means and incentive to produce anything durable, including a healthy, educated, sustainable society.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#413

Post by krupan »

postalrat wrote: post #336
krupan wrote: post #235

Earlier quoted context omitted.

People downvote this but Bitcoin has some very nice properties: - easy to verify/impossible to forge (as opposed to gold and paper currency) - fixed supply (as opposed to paper currency, oil, and even gold) - easy to transfer from one party to another (as opposed to gold, oil, and physical cash)

It has at least one fatal flaw: the math it is based on. I feel like it won't be too long before a few major weaknesses are found and bitcoin will lose all security.

Bitcoin has been running since 2009 with plenty of incentive for hackers to find flaws in it and they haven't found any. It uses standard cryptography that is used by all our computer systems. If a flaw exists it's not just bitcoin that will be damaged but everything we use.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#414

Post by seanhunter »

omgJustTest wrote: post #69
snovymgodym wrote: post #3

The international value of the dollar as a reserve and trade currency is inherently tied to the behavior of the US Government and the Federal Reserve. The behavior of the US Government has been very unusual lately, and the independence of the Federal Reserve is actively being challenged. So draw from that whatever conclusions you wish.

Currencies fundamentally relate to some trust. I believe that the near-term de-dollarization isn't as much trust erosion as it is a tool to provide monetary penalty for behaving in unpredictable ways. However it will provide incentive to move away from the dollar in the long-term, ie as Fareed Zakaria says "recent actions are accelerating the world to the multipolar future".

> Currencies fundamentally relate to some trust.

A quant partner at Goldman said to me once that the thing that's different about currencies relative other normal financial products is whereas you might buy JPMC or oil or a bond because you like JP Morgan or oil or think rates are going to move in a particular direction or whatever whatever, you never just buy the dollar. You are always trading one currency for another eg selling GBP to buy USD. What that means is currencies are always about the value of one currency relative to other currencies.

In that sense they do fundamentally relate to trust and in particular specifically in this case about trust of the US economy and financial system's stability as opposed to other economies and financial systems.

So there have been times (eg during the financial crisis) where people think all currencies are bad but you can't just sell all of them so typically they would sell the other ones for dollars. For me, de-dollarization is about the choice of central reserve banks to hold dollar assets but also about other financial players changing their "default currency denominator" when they're doing this kind of trade.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#415

Post by jacquesm »

nubg wrote: post #329
pbhjpbhj wrote: post #276

Earlier quoted context omitted.

Your ruler is no longer following the rules of law, nor the foundational constitution. USA ended with their declaration of dictatorship and the failure of your houses/legislature/military to act against that and defend the Constitution. I can't see how, since the end of habeas corpus , you can claim legal stability. Your leader is World renowned for reneging on debts and is demanding bribes for companies to operate.…

Why is this getting downvoted?

Because it makes people uncomfortable.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#416

Post by weberer »

PlatoIsADisease wrote: post #133
maerF0x0 wrote: post #88

China is intentionally undermining the dollar in order to try to make the Yuan the world currency[1,2,3]. My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. Compared to real money (Gold) the S&P500 is down over the past 10 years. [4] 1 - https://www.reddit.com/r/economy/comments/1o2s6qp/yuan_has_s... 2 - https://www.economist.com/china/20…

>China is intentionally undermining the dollar in order to try to make the Yuan the world currency The constant devaluation makes it unappealing. > My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. I generally agree. But economic orthodoxy says 'Inflation is only 2%', despite precovid, it seemed more like 4%.

The insidious thing about inflation is that it compounds. Even just a 7% inflation rate will halve your currency's value in just 10 years.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#418

Post by m00dy »

thehumanmeat wrote: post #228
snovymgodym wrote: post #3

The international value of the dollar as a reserve and trade currency is inherently tied to the behavior of the US Government and the Federal Reserve. The behavior of the US Government has been very unusual lately, and the independence of the Federal Reserve is actively being challenged. So draw from that whatever conclusions you wish.

The Fed and largely US policy has absolutely no effect on the real reserve currency: https://en.wikipedia.org/wiki/Eurodollar

Few people actually know how Eurodollar system works under the hood.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#419

Post by nospice »

snovymgodym wrote: post #3

The international value of the dollar as a reserve and trade currency is inherently tied to the behavior of the US Government and the Federal Reserve. The behavior of the US Government has been very unusual lately, and the independence of the Federal Reserve is actively being challenged. So draw from that whatever conclusions you wish.

> The international value of the dollar as a reserve and trade currency is inherently tied to the behavior of the US Government and the Federal Reserve.

I think this oversimplifies things. The dominance of the dollar emerged chiefly because most of the alternatives were worse, for a combination of military, political, and economic reasons.

There is a positive feedback loop at the core of it, because the US economy benefits greatly from being able to issue foreign debt in their own currency. But that doesn't matter: as long as the US faces little risk of getting invaded by any of its neighbors or defaulting on its obligations, everyone is happy.

What's been changing - and it started long before Trump - is that the US is also increasingly willing to use its control of USD (and thus the Western banking system) to pursue sometimes petty policy goals. This is giving many of our partners second thoughts, not because of the fundamentals of USD but because they imagine finding themselves at odds with the US policymakers at some point down the line.

Re: De-dollarization: Is the US dollar losing its dominance? (2025)

#420

Post by buckle8017 »

linkregister wrote: post #262
mothballed wrote: post #222

Earlier quoted context omitted.

Retailers don't accept crypto not because of the technology so much as the fact it is a capital gains event every time you transfer crypto, which means both the buyer and seller are now forced to keep a log of their gains/losses against the dollar everytime they buy a pack of gum. Obviously that's extremely impractical and at best you're hiring a 3rd party to streamline that for you. It's a clusterfuck at tax time (e…

Reticence among retailers predates the capital gains policy of the IRS. The volatility of Bitcoin's value induces excessive exchange risk. However, we don't see capital gains nor exchange risk with stablecoins. I assume that network effects are insufficient to drive retail demand for stablecoin support.

> Reticence among retailers predates the capital gains policy of the IRS. The volatility of Bitcoin's value induces excessive

The IRS policy is irrelevant, the law always required payment of capital gains. It's consistently been the hardest thing about accepting Bitcoin for payment.

Foreign currency payments are largely exempted.

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