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They've been trying this for years. It hasn't gone anywhere.
Let me rephrase my prior post, so it is clear to all what I meant even if it does conflict with certain people's narratives.
The US position in the world economy is under jeopardy by Trump. His pulling out of the Iran deal, the Paris accords, his assault on our allies, his unpredictability and a tax cut that will just explode the deficit will cause the world's nations to question the stability of the dollar.
The Western world has been behind the dollar as the world's reserve currency. But as we have seen at the G-7 summit, Trump is no friend to our European allies.
Does that mean the dollar is doomed? No, other than China and Russia and other foes of the US will attempt to exploit our weaknesses and ineptitude for their gain.
It is not that they have Trump on their side it is ignorant US foreign policy. The Russian sanctions put in place drove them into stronger alliance with China.
The U S reserve currency is being chipped away at by China and Russia and won t take place over night.
The US dollar is the primary reserve currency of the world and that allows the US government and US citizens to borrow at lower rates. I've seen estimates that this saves the US government and citizens about $100 billion per year which would be about .5% of the US GDP...so if the word adopted a different currency, it would have a minor negative impact of America.
However, no other currency has been able to attract much interest over the US dollar....fundamentally, another currency would have to develop a confidence greater than the USD and all efforts to date to do that have been a miserable failure...pissing in the wind.
As far as Russia and China trading their oil in another currency, negligible impact to the US and probably temporary too.
Yes I’m sure Russia Today believes that they can displace the dollar as a world reserve currency. In the real fact based world though, they have little chance of pulling it off. Since currencies are backed by output rather than gold reserves, the USA easily outpaces China, accounting for nearly a quarter of the worlds economic output. Add to that the fact that Russia accounts for less than 2% why would China hook themselves up to that loser?
I've been noting for years that this is coming and other countries are going to join in. When it does we can no longer simply print what we want and get people to accept it.
I've been noting for years that this is coming and other countries are going to join in. When it does we can no longer simply print what we want and get people to accept it.
The USD was 47% of the reserve currency world wide in 1990 and is 63% today and it has fluctuated up and down over that time but the dollar has remained the strongest currency so I don't see anything to suggest this changes drammatically in the future.
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