Can the Chinese YUAN win the WAR against the DOLLAR? [And one more alternative]
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The offensive against the dominance of the dollar has begun. The dollar has been the basis of the world's financial and trading system since at least the Bretton Woods agreements in 1944. That's been almost eight decades now, and guess what? Now the urgency to overcome the dominance of the dollar seems increasingly evident among dictatorships and emerging economies.
The question is: to what extent is the hegemony of the dollar in danger? Will the Yuan be its new alternative? Is there any currency that could potentially rattle the financial foundations of Uncle Sam? What consequences could this campaign have? Well, in this new VisualPolitik video we answer all these questions.
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The concern of WhiteHouse is China could use digital yuan to bypass sanctions on China and other countries like Iran, or North Korea.
Some are skeptical about this but such digital yuan can make sanctions less effective.
@@tranbaohoangvu9464 you French mo fo need to stay off American internet. SINCERELY SOUTH SUDAN
Make 🇺🇸DOLLARs Great Again 🤑💸💵
BRICS wants to build a new currency. It is also worth noting that gold has historically been used as a store of value and a means of exchange, and some countries still hold significant amounts of gold in their reserves. However, it is unclear how a new currency backed by gold would function in the current global financial system and whether it would gain widespread acceptance. Ultimately, any decision to create a new currency would be subiect to numerous economic, political, and logistical considerations.
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@@fadhshf Laurel Dell Sroufe maintains an online presence. just make a simple search for her name online
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It will definitely fail.
I am not the first time come out and say you should outright trust the dollar, or any other fiat currency. But I trust the dollar far more than the Yuan.
I think you are missing a "not" in your comment, which reverses the meaning.
If you have to pick between two evils, the US or Chinese gov, I’m going with the US every single time.
Agreed. I trust gold and silver more than both.
@@rogerdodger1790 same
ironically,with all the people that keep babbling about the yuan ,the most common currency in the global market after the US dollar is the Euro. The yuan is still way behind both currencies.For the simple reason that it is not as stable .
Aren't they (the Chinese yuan) even behind the British pound (£) and the Japanese yen (¥) in terms of usage and storage, or something similar? Two countries that have a combined GDP of only $8 trillion, compared to China's $19 trillion.
How can one currency become stable
@@Essentially_NobodyThe Polish Zloty too
Like yuan
@@CallMeShiba if look at the exchange rates of both the euro and the us dollar,they are stable unlike the ruble , yuan ,rand ,turkish lira ....etc
A single currency between brics is.. suspect. China and India are rivals, and both manufacturing exporters. South Africa, Brazil, and Russia are commodity exporters. There are very few convergent interests other than wanting to decouple from the dollar. A joint currency would require multiple miracles
👍
India? Their export is 2% of the world total export. 😂😂
Not a miracle friend, math. Everything can be solved with the proper application of math in economics.
@@chawanangwasoko5960 yes I'm sure there's a solution that will make India want to give up it's monetary policy to Beijing
@@Rabanthebrain but you have to understand that Beijing is mighty, but not central to the whole agenda, it a collaborative effort, political rivalries are going to have to be cast aside for this to work, and work it must.
No one in their right mind wants CNY over USD.
Not even chinese people. China has banned converting more than $50,000 equivalent CNY to other currencies per year.
how about INR?
@@sachin2842 Maybe in 50 years or so. India has a LOT of development to get through first.
@@IanHobday 50 years? I think 20-25years. Let's see..
@@sachin2842 I'll be dead long before 50 years passes! I do think India has decades of work ahead, and the rest of the world won't be standing still doing nothing during that time either.
I don't know why you claimed that India is looking to trade in yuan, but I can tell you the government itself will find it difficult to remain in power if it even suggests that.
Exactly! Although I'm rooting for ₹ to become dominant atleast in Asia Pacific. But if that's not possible, then any Indian in their right mind would prefer USD over Chinese yuan
India is using Yuan in some parts of their trade with Russia
yet India is using yuan for some of it's INCREASE purchase of Russian imports since 2022 started. It will be limited of course.
@@user-ll5fq3tl1j 6:28 "....India is using Emirate Dirhams in it's dealings with Russia"
Besides, Russia can't use and won't accept USD from India.
These western commentators are not exactly known for understanding non-western countries that well.
They think they know you better than you.
BRICS currency also would not beat the USD anytime in the near future. BRICS nation economies are really unequal, having a common currency would hurt it own citizens. Look at the Euro and greece, goods became more expensive for it's citizens after they adopt the Euro. The UK with their pounds are also reluctant to adopt it.
if the brics linked their currency with hard assets like gold or silver or oil it would probably fare better than euro which is full fiat system being kept by artificially low interest rates by ecb but differing debt among eu countries
@@druidism08 there is a whole lots of problem trying to link currencies to commodities. You would need a hold lots of reserve of those commodities and can't be sold, if you don't other countries outside BRICS can easily manipulate your currency by tanking the commodity price. Crude Oil will degrade overtime once out of the ground. Gold and silver are hard to store, transport, and need lots of security and space. There are so many reasons why fiat is used instead of gold now, you search up on youtube. Also linking your currency to gold slows down the growth rate of any economy by alot, because it makes it not flexible for economic policy changes
the Euro is not backed by gold, it is just another fiat currency. also, so far, they've been talking about this Brics currency only for international settlements which means the average Joe will not have direct access to it because regular people don't go around making transactions of hundreds of thousands of dollars on a daily basis.
basically, the idea is that people will keep using their local currency and this Brics currency will allow for cheaper exchange rates as well as faster transactions, which means an increase in money speed aka stronger economies. also, it will mean that nations will no longer have to absorb American debt
@@operatorlink I do understand, Jeff Schneider explains a lot about it on his channel. But as Ray Dalio pointed out we tend to live in a cyclical pattern. at the moment the trust of public is quite low since debt is being monetized to keep on spending for social securities etc.
The BRICS are in no way proposing sharing a single domestic currency.
They are proposing an exchange currency to bypass the USD, holding this new currency during the import/export lag
It has nothing to do with their own currencies except that it will reduce [currency] USD volumes.
The Yuan cannot be trusted, the guy in charge of one of the currency printers was recently caught in a corruption scandal, he was printing 2 bank notes for every serial number the central government authorised. People were finding those bank notes and the banks were declaring them both as legal tender, although having millions or possibly billions of dollars worth of Yuan circulating isn't the greatest advertisement for a safe and stable currency when half of those notes shares the serial number of another note and is the result of corruption
No paper money is actually worth the value that's printed on it, only perceived value. Your dollar is much the same, Jerome Powell keeping that money printer running etc.
@@kevinmanan1304 u forgot about USD being supported by American military might likewise other countries and their military.
And the USD is free of scandals and corruption?yeah right
@@kevinmanan1304 Even if we accept your point, the original comment has some serius ground. If you let big part of your “ paper printed” cash to be used by others, when should they ask this question “ How many Yuans have this exact series number, is it a half Yuan or a quarter?” How shoud we count them through bilateral trade?
Same as with dollar. That's why I asked my company to pay me in pound sterling.
My wife has money in China and it is almost impossible to get to from outside of China and going back is life risking, so NO, don't want any more Chinese currency.
And you don't have to do ANY of that shit if you hold US dollars 😁
Did you commit crimes? Why is it risking your life?
Please tell these dolts the truth. You tube is destroying the real news
When I place orders for goods for export from China to the US. They ALWAYS want dollar. Even though I can pay in Yuan. When that flips is when you know there's trouble.
When? Really? Not going to happen in our lifetimes.
The Yuan is pegged to the USD so it can maintain cheap labor so china will always rely on the USD
Not when they have transitioned itself fully into high tech industries.its in the process
@@andia968 Lol, they will never transition into high tech industries. Despite all the Chinese propaganda, China is still very low tech. Their manufacturing is all very low end / low value add. All China does is assemble parts. All the high end components are manufactured in the west because China has no ability to do any precision manufacturing. It's not just chips, it's everything. Now that the entire civilized world is decoupling from China, it's all over for them. They can steal all the IP that they want but they will never be able to get the parts to make their shitty Chinese copy.😄😁😆
A gold backed currency would be a disaster for the smaller economies in a downturn. We've seen what happens with gold backed currencies.
gold backed currencies are a disaster for everyone, since your economic growth would be limited by your ability to mine a very finite resource, whereas our modern economy is not even based on mining or material production, but on immaterial services. Going back to a gold standard will be the death knell for all economies.
@serebii666 I beg to differ! It will only be a death knell for countries that don't have gold mines, ie. European Nations! For Africa, it will be business as usual & that is what you are afraid of...
@@ahmedlusajogibbonsmwaikamb6099 There are literally Gold mines in Europe operating right now, like in Bulgaria, Portugal, Sweden, Finland, Demark and Spain. And countries like the UK, Portugal, Romania, Slovakia, Greece, are in the liscencing stage of opening new mines, while France, Italy, Slovakia and Austria are exploring their gold deposits.
But that in itself is beside the point. Africa has always had bountiful material resources, while Europe has had fewer, both in the time of the Gold-Standard, before and after it. So why is Europe wealthy and Africa poor? Because Europe invested in their human capital, rather than depending on their basic resources for wealth. Educated people, with specializations, add value to the economy. That is why service economies grow faster and are richer than primary or secondary economies. And Africa is still incapable of harnessing its Human capital. Europe isn't afraid of Africa FINALLY modernizing, they are anxiously waiting for it, since it will mean more, wealthier consumers, who will buy the luxury goods Europe focuses on. But that is only if Africa can get its act together, and so far only places like Botswana show any promise. For Africa "business as usual" still means wallowing in poverty because the elites in power can rely on exporting their basic resources to pay for their lavish lifestyles over building the institutions for a richer society overall. And your thinking only proves how far Africa has to go to be able to build that society.
@@serebii666 dude you seem to know much about economics and stuff, you should have a TH-cam channel
@@serebii666You hit the nail on the head. Even here is South Africa where we once stood as a strong African nation with promise, Nelson Mandela with good intentions led a group of bandits into parliament. It just seems like African culture is not currently compatible with modern economics. I wish somebody would cover this subject well, I certainly don't know nearly enough to do it.
That 13 year old girl, Daphne, at the Berkshire Hathaway who asked Buffet and Munger about the national debt and dedollariztion was legend!
This is just such a silly idea :P A BRICS currency would NEVER work. Even the Euro almost collapsed due to economic and fiscal differences between EU countries.
Right, a common currency really needs a common budget to work properly. I doubt Brasilia would prefer to have its public spending driven by Beijing.
As a Brazilian citizen I can assure you: forget about any project that depends on commitment, transparency and cooperation between BRICS member states. The block is plagued by corruption, weak judicial systems, populism, debt and very, very questionable economic decisions.
If an alternative is going to come up, it won't be led by us, that's for sure.
US IS WORSE CORRUPTED COUNTRY IN THE WORLD WITH BLOODY HANDS.
IF YOU WANT TO BE US SLAVE AS EUROPEANS PEOPLE IT'S YOUR CHOICE, MAJORITY OF SOUTH WORLD DON'T WANT TO BE DEVIL"S EMPIRE VASSAL
just do the math: how big is the Brics plus economy? Corruption is everywhere
Suffice to say it's formed by totalitarian governments. That is no guarantee for anything.
If you wanna see REAL corruption, take a look at USA. 😂😂
you just describe the USA and most western countries.
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The main problem with a currency run by the likes of China and Russia is that there is a complete lack of transparency and rule of law in these places.
Federal reserve is completely transparent right???
@@shreyanshverma2295 Compared to authoritarian states. Absolutely. It also operates independently from the white house.
@@sonneh86 two villains
@@sonneh86 😂. Just a budget borrowing unlimited money. Nothing to it
@@shreyanshverma2295 Hey, it's the anti west guy again! Federal Reserve doesn't have to be 100% transparent to be much better and much more transparent than one run by China. Why do your types always use Nirvana Fallacy?
Brics stated this project in 2009. Why hasn’t it happened yet???
‘I am confident that together we’ll achieve the formation of a more just, multipolar world,’ Putin said. ‘The ideology of exclusivity, as well as the neo-colonial system, which made it possible to exploit the resources of the whole world, will inevitably become a thing of the past.’
Putin highlighted Russia’s allies around the world as pivotal in establishing said multipolar world. ‘We value historically strong, friendly, truly trusting ties with the states of Asia, Africa and Latin America, and we will strengthen them in every possible way,’ Putin added.
The only real alternative is the Euro, but it has the same issues as the dollar.
Even worse, because Europe won't print or barrow enough to make the Euro widely available. For all the complaints about USD dominence, no one is even *TRYING* to unlock their currency and push new bills into the global market, Yaun included.
I don't blame them, living anywhere in the US other than economic powerhouses is harder because prices soar without proportainal pay raises, more than half the country is rusting away due to imports and its hard to complain because open trade is why so many people love doing business with us. Nobody in Washington is going to actually call the greenbacks back home because our 'friends' will be P*O. If anything the debt ceiling fight is just as much about engagement aboard as the indiviual domestic issues.
An economist mentioned that in order to be a reserve currency you have to be a net deficit exporter. This way you can push your currency out to other country from trade. It seems the only country on the planet that can weather that is the US. China is always looking to be a net positive exporter.
The BRICs currency would be a 2008 Greece Eurocrisis over and over again. Russia, Brazil, and South Africa aren't financially responsible enough to not bring down the system.
Keep dreaming you're living in alternate reality
@@stuartemmanuel3735 *Russia goes in and out of recession based on energy commonalities. Plus, war and sanctions aren't great economic policies.
*South Africa can't even keep the power on.
*Brazil's economic policy is barely more forward-thinking than Venezuela.
Why would China and India risk their monetary well-being on these economic dead weights?
@@badluck5647 And India would never let China be the common BRICS currency lol
It would be great if yuan could replace the USD, but that will never happen under the current leadership of CCP. Reason Yuan cannot replace USD are the following,
1. CCP artificially devalue yuan all the time. Under this type practice, people in other countries will not want to own something(currency) that loses value artificially.
2. CCP does not allow foreigners to freely own yuan at will.
That's before considering the suspicion that a significant share of RMB was double-printed, which better explains Beijing's push for digital e-CNY.
@@doujinflip - your not getting it. China has to artificially devalue its currency to offset the trade surplus abroad. If not, the valuation of yuan would go up to the moon. Down side of having strong currency is that your products you produce will become more expensive as your currency gets stronger.
Doesn't America also devalue the dollar constantly by printing more and more of it? They've been free-loading the rest of the world since the 1970's.
I'm a huge Lula and Brazilian Labour Party supporter, but Brazil insisting on the BRICS is such a waste of time and soft power.
I have been told that in Brazil, Argentina and some other countries in Latin America, there have been times when large purchases could only be arranged in USD. The reason seems to be that large and long term purchases in the local currencies would be a losing proposition for the seller. To be fair, the opposite is sometimes true. When Argentina pegged its currency to the dollar, it ruined the economy by making exports too expensive and imports too cheap. Dollarization is definitely a problem for many countries. The problem, however, can't be solved by stupid decisions of left-wing politicos yearning for the dollar to be replaced by Soviet Rubles or Gold Pesos or Reais de Ouro.
Lula is better for Brazil than his right-wing predecessor, but futile, dogma driven, anti-US programs are one reason for lack of real progress in Latin America. The other reason for lack of progress is the usual alternative of right-wing, dogma driven, anti-democratic statism. Instead of lurching from far right to far left and back again, Latin American countries should probably pay attention to countries like Uruguay, which succeed by being pragmatic rather than dogmatic.
@@JMM33RanMA yep, the dollar has a huge importance on these economies, the exchange rate is part of the daily news at least in Brazil.
The anti-US sentiment in Latin America is totally understandable when considering the USA sponsored violent right-wing dictatorship in the 1960s, and also has backing up the War on Drugs from the 1980s -- so there's a lack os trust.
@@mr-andrew I understand that, and the US is somewhat politically unstable these days. Except for the current GOP's attitude of "Our way or we'll burn it all down," the economy and value of the dollar has been relatively stable for a very long time. What I wrote about the dangers of far right and far left parties is true of the US, except this is the first time we've had an extremist party, and I hope the real Republicans can come back from the Trump Monarchist Extremist experiment.
The dollar dominance has dropped considerably over the years, but it has been a slow drop as other economies (including China's) have grown in importance. A continued drop in dominance is probably not a problem unless it were to happen overnight, and even then, any trade with the US is probably going to have to be in US$.
A strong Yuan will be the end of chinas manufacturing Dominance why ship production abroad when it will be cheaper to do it at home
The dollar domiance remain too important to be challenged anytime soon. Sure it'll decrease to some extent, but that's actually healthier, even for the dollar, the same way that Swiss central banked tried to lower the value of its currency at some point. If there are more counter balancing currency in use, the dollar loose enough of its value to not be used as a store of value.
You have data or source for this? AFAIK, it is China who is losing global economic relevance as businesses relocate their manufacturing operations away from China.
@@phoenix5054yes china have also lost some but only short term. but the dollar is falling slowly in market pressure.. but this actually good for the dollar... The euro and other smaller currencies have picked up the slack
@@phoenix5054 My source was the breakdown of each currency's share of international trade. Right after WW2 when the Bretton Woods accord went into effect, the US$ was used in 90% of international trades, with some trades in British Pounds, German Marks, Dutch Guilders, Swiss Francs, etc. That has dropped over the years, with the Euro replacing the individual European currencies that have been replaced by the Euro.
China's currency will NOT replace the US$ or even make much of a dent in the US$ dominance. Some of the reasons for this is what you mentioned regarding some questions about China's economic future, but the other issue is trust. China has manipulated the value of their currency in the past, generally devaluing it so that their prices remain more competitive. A country holding foreign currency as a reserve doesn't want the value of that currency dropping.
BRICS currency: Like the Euro, but with more of the problems, less of the benefits.😂
Seeing that China is 2x bigger than the rest of the BRICS nations combined, its pretty obvious who would be in charge of this theoretical new currency
Which is why it will never happen. India will NEVER give its monetary sovereignty to Xi Jinping
India is not going to let china do that
@@jsthereforfun1648 Exactly why it will fall apart
Are you talking about population or GDP? If you're talking about population then China is definitely NOT bigger than the rest combined.
@@Jake-sg1xr yeah exactly but who knows nothing can be said about Geopolitics if USA can find terrorists then India can shake hands with China for a period
Two problems:
First; there is no formal agreement that cements the US dollar as the global reserve currency. It’s just cheaper to exchange through the US dollar than exchanging directly. Currency is traded in all manner of currencies and the US doesn’t care, and does literally nothing to ensure the dominance of its currency. It just has a very stable currency and economic system that most want to use.
Secondly; the currency of any tyranny is far more exposed to policy based volatility and uncertainty than those from democracies; as a function of all the checks and balances present in democracies to stop a leader doing something devastating. Tyrannies don’t have the same robustness built into their systems because it stops tyrants exploiting their people and economies for their own benefit.
So the RMB can only gain prominence as the global reserve currency once China builds in robust checks on government power and it becomes cheaper to trade in RMB than USD. The same is true for any other currency. Which means trade in RMB will be limited even if countries like Russia go all in on using the RMB. Even if it gains greater use, even if it becomes cheaper, it’s constantly one decision by Xi Jinping away from its popularity collapsing.
Also a pluralistic currency world won’t prevent either economic shocks or international sanctions, or even make them harder to enforce. Sanctions are enforced by national governments, and the US dollar is only used as a matter of convenience to determine thresholds, but there is no challenge in each country agreeing to an equivalent amount in their own currencies as this is basically what happens now.
The advantage for Russia using the RMB is simply to avoid going through the systems of nations who will enforce sanctions. But it costs them in other ways and denies them access to markets who won’t use the RMB because they don’t trust it.
There are are other reasons the Yuan won’t overtake the dollar primary of which is impending demographic collapse within 30 years. They also have significant internal financial, water and food challenges.
BRICs won’t agree on a common currency because Russia is facing economic and demographic decline, India and China can’t agree on what day of the week it is, so how are they going to agree on a currency and China’s challenges were noted above.
The dollar may maintain its position by default.
There is no such thing as collapse, you watch too much mainstream media
Usa will also face this , I hope It will be severe
@@blackoutclub9637 ... The USA, like most industrialized countries has a decling birth rate, but immigration is stablizing the population. China has almost no immigration. The USA also isn't facing the same severity of food and water problems China is. I hope all countries can address their challenges so their people don't suffer.
@@SFBayAreaLiving except westerners
Just opened a USD Account on our local bank. Seems that the USD is very stable and the trend since 1980’s is up until now. USD is a good investment and it can protect you from inflation. 🤗
A lot of this anti-dollar propaganda suggests or outright says the US is only rich because of the dollar. This is not the case. The US is the largest exporter of food and precision manufactured goods. It does much of the medical and technological innovation in the world. The USD can become just one of a number of large currencies without disabling the US. Adaptations will have to be made but it would be better for US farming, manufacturing and raw material exports.
Its all paid CCP propaganda
Tbf, the Brazilians are probably going to take over as the world's largest grain exporter. That said, the US will probably increase bio/renewable diesel production, so energy exports will increase.
Exactly. Having the dollar so freely traded and holding the status as the world's reserve currency actually hurts the American economy in some ways, namely it is nearly impossible to protect American jobs amd manufacturing competitiveness globally since the value of the dollar is set by the market. China was only able to become the "world's manufacturer" by keeping their currency value artificially low and restricting their own citizens from taking wealth out of the country.
It's not anti-American, it's calling out an massive advantage that America has in the global financial markets. The world is basically built to maintain American prosperity. You wouldn't accept such immense foreign influence on your ground, why should we?
We are at the stage of empire decline where the Dollar reserve status should be _increasing_
The reason is because during the late stages, which includes economic decline, the falling empire becomes a massive debtor nation pushing out tons of Dollar bonds onto the market.
By the time reserve status begins falling, the empire is 10-20 years since having fallen off a cliff
So next year the two largest hydrogen fuel production facilities in the world begin exporting fuel to the Asia Pacific Nations, multiple South American Countries, Mexico, the UK, and the entire European Union. Again in 2024 to the largest hydrogen-fueled producing facilities begin exporting to the world. The Nations that are buying the hydrogen fuel will be doing so to replace their dependency on the US via the Petro Dollar.
The interesting thing is that many people talkin about United States economy or the petrodollar have no idea that the world made agreements with Canada almost a decade ago to take over the global fuel export industry. The petrodollar is dead and that's why the US government is freaking the f out because it has no idea how it's going to cover its 33 trillion dollars by the end of the year. No more interest from no more petrodollars.
And that means no more.....
The move won't be from, USD to yuan ... It'll be from USD to domestic currencies.
Eg bilateral trade in uae dinar among india and Russia .
Bilateral trade will be more significant.
Also, advent of computers allows exchange rate conversion more easier.
We might even make a absolutely new currency that might be decentralized ( like bitcoin but backed by sovereign countries)and based on a weighted basket of goods , currencies etc.
Doubt it, they can barely come together to fix oil prices.
The concern of WhiteHouse is China could use digital yuan to bypass sanctions on China and other countries like Iran, or North Korea.
Some are skeptical about this but such digital yuan can make sanctions less effective.
The problem is the Yuan is worthless outside of China. Anyone accepting the Yuan is someone that plans on turning right around and using it to buy something from China. That's essentially a barter system. The problem is that nobody trusts China. If you think countries are afraid of being sanctioned by the U.S. What makes you think that China won't immediately cut them off from their funds as soon as they have any minor disagreement? You can see China using it's financial might to bully smaller countries and even countries like Australia. When Australia proposed an investigation into the Wuhan lab, they immediately stopped buying coal from Australia. The CCP will freeze all your money if you slip up and call Taiwan a country.
thats the goal making us sanctions less effective
Based on their past actions, I think anyone (or any country) that would rely on the CCP for a stable and above-board currency would be foolish. As for an alliance of banks from the BRICS, first, I don't see that actually happening (you guys think India is going to trust China?), certainly not in some sort of neutral, hands-off way that it would need to be to get anyone to really use it heavily enough to challenge the US dollar. Frankly, the Euro is a better bet for a trusted currency that could challenge the dollar 'some day' than a combined BRICS currency. I don't think the US needs to worry about external issues like this...instead, it's the self inflicted wounds their own political system is giving them that would or could break the dollar dominance.
That thumbnail is horrifying 😱
The flaw in the yuan is that you have to bet on the CCP (or no now the CPC they rebranded) being able to not just continue but exceed "the economic miracle" that has been China of the past 30 years with a massive and rapidly aging population.
The problem with the dollar monopoly that the US is totally careless, irresponsible and ignorate about the rest of the World.
Their underregulated economy caused multiple crisis in the last two decades.
And who's better? Propaganda regimes who can not keep the trust of external investors?
You wish, but the world is run by nothing but idiots and your glorious l;eader is cheif among them.
Now this is an interesting analysis.
tldr: Who would trust the Yuan as storage of wealth?
commies, dictators or those who will get payed from CCP :) simple
There are decades where nothing happens, and then there are weeks where decades happen.
There's a difference between power acquired via trust and steady competence and reliability and stability (despite the hiccups and imperfections) and someone who outwardly and explicitly seeks power without growing and cultivating the aforementioned characteristics. This is why it won't work. People are like why does China truly want to do this?
Yeah, if usurping sovereign assets of another country doesn't scream trust & stability, I don't know what does!
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Backing a currency with precious metals and rare earths *sounds* good. Who among us doesn't feel nostalgia for currencies whose value is fixed?
Alas, those are traded commodities, and their values are *not* fixed. They never were.
Further, we have reason to expect energy costs to fall over coming decades as fossil fuels are phased out. It's worth pointing out, energy to extract and refine these commodities is their primary cost driver. Falling energy prices mean falling prices for precious metals and rare earths.
Basing currencies on commodities may turn out to have two disadvantages:
- increased volatility.
- reduced flexibility.
On the second point: a central bank tied to a commodity cannot issue more currency, nor drain it, in response to macroeconomic trends.
I know there are some people who would love to see central bankers stripped of power, eviscerated, coated with honey, and staked to an ants' nest. I may even occasionally sympathize. But although central bankers do not always do the right thing, being unable to do anything at all is essentially what we had in the US when we had the gold standard. That did not go well, which is why we abandoned it. Which let the US get out of a persistent depression, grow output to fight WWII and to expand its economy in subsequent years far more than if we had stubbornly clung to the gold standard.
That view is generally accepted among economists.
It's simply true that commodities don't have, and can't have, fixed values. Trying to buck that trend gets us nowhere.
I'm not the biggest fan of fiat currencies. But at this moment in time, absent rethinking how else to store value and lubricate trade, it's all we've got.
I would not trust them with my currency not with being the holder of the commodities that might back a new currency.
When I read the thumbnail, knew the BRICS would come up and had a good laugh.😂
It's only natural that all nations want to diversify their portfolio not doing so could lead to disastrous consequences down the line
Good video. Thanks for uploading. If the dollar loses its dominance, it would be solely due to the actions of the US government itself, whose unabashed decision to print trillions of dollars during the pandemic, and even after when it had ended, in the name of helping people, resulted in very high inflation (which the US exported across the globe). By the time the US government and the Fed understood their mistake, it was late. However, better late than never. US dollar is a beautiful currency, and the US should take responsible actions in the future. It is proved that cryptocurrencies cannot topple the US dollar, and nor can the Chinese Yuan. The other currencies, incl. the Euro, are not used as extensively as the US dollar. The US should try to reduce its debt burden and not fall on printing of the US dollar as the solution to any financial problem, and US dollar should do just fine.
There is a ton of miss information, The BRICS Bank (New Dev Bank) is planning to lunch a new Negiotiable Instrument , in the lines of IMF's SDR (Special Drawing Rights), I contrast to SDR, The New NI will have trade opportunities,. Nothing to be afraid off.
This is what I like about a multi-polar world - choice and not monopoly.
Foolish for any country to hold reserves in a currency that can be debased at a whim. Countries should hold bitcoin, fixed supply and no counterparty risk.
Dollar: You Can’t Beat Me!
Yuan: I Know, But He Can!
Gold Backed BRICS Currency:
Ah yes, Brazil, India, China, Russia, and South Africa. Economic powerhouses that have so much in common.
• Brazil is taking steps backwards after their growth thanks to leadership, and this is just another step in that direction. They’re making a joint currency with Argentina, which has a history of their absolutely dog shit economics lol
• Russia has a GDP that’s half the size of California and smaller than not only Texas, but New York as well. They are going to be taken advantage of and become a serfdom of China in the process lol. They just sell cheap oil to China and they benefit from keeping them close, but they are not allies.
• India is slowly moving towards aligning with the West and loosening ties with Russia. They historically relied of Soviet arms for defense, but they are moving away from that. India and China have border clashes because China tries to forcefully take Indian territory. They just fight with sticks instead of guns lol. India is in BRICS to counteract China, they are not friends.
• Chinas economy is collapsing. They have two currencies for international and domestic use. Without the domestic l, the international has inherently no value. Companies are leaving China, and China won’t let them take their money with them. They inflate their economics to hide the fact that their housing market is collapsing and industry is slowing down. And again I’ll point out the conflicting nature of China and India.
• South Africa is days away from becoming a failed state thanks to its corruption. They can’t even keep their lights on without having 12 hour blackouts every day. But yes, a fine addition to BRICS lol
The only thing these nations have in common is that they hate the US/west and want to be the world rulers. Corrupt dictators who oppress and wage imperialistic wars and jail/murder their opposition, or run their countries into the ground lining their pockets, relying solely on propaganda and the threat of violence to facilitate and hold onto their power. They will never agree to a collective currency unless they hold the power. China controls its economy by controlling it currency, they won’t hand it off. India won’t put faith in any of them, and russia knows if they did they’d be even more fucked lol. Gold is traded with USD, and BRICS won’t change that.
Thats the same thing
The main reason for most countries backing off from USD is to avoid US sanctions and depreciation of the dollar. The fact we don’t hear from the media is that the US government demands China and Japan to buy US bonds. Then, every time the dollar depreciates, the bond holders lose massively. And US sanction is probably the first thing any country wants to avoid. Russia knows about it better than anyone. So, US spent 70 years to build the world economy based on USD is starting to end.
You're right in that a strong dollar will raise price on us goods, hurting us exports but your understanding is too simplistic for a number of reasons.
1. 90% of the us economy is internal market, not exports.
2. USA runs continuous deficits increasing the debt increasing treasury bond sales which will drive up interest rates which will cause the fed to conduct open market operations buying bonds with money the fed makes which increases the money supply which is inflationary which dollar dominance helps by increasing demand for dollars thus bolstering dollar value.
3. Inflation is the obstacle to economic growth and the fed wants to keep it at 2% because a slight inflation is a hedge against risk of investment in increased production capacity and entrepreneurial ventures.
4. High inflation or deflation is a prohibitive risk to investment.
5. Falling dollar value will cause a drop in profit from us bonds, decreasing demand which will lower their value which will drive up yields which will raise interest rates.
You don't think things through😢😂😢😂
bro, that sound just before the ad almost gave me a heart attack!
A positive outcome for the US if an alternative currency were to arise would be a boom in US manufacturing. A big reason as to why manufacturing left the US is because of the sheer cost of doing business on its home soil.
Theres another currency you didnt mention that is immutable, decentralized from any government, faster and more free to move around the world than the dollar, and is more rarer than gold. Funny how you didnt mention it.
Brazil want to borrow USD from China and pay them back in YUAN under the old exchange rate that is favorable to Brazil. The de-dollarization process is a failure from the start. 😅
I strongly encourage RMB proponents to convert all their own money into RMB.
Finally somebody made a proper video about this subject. Why am I not subscribed to this channel yet?
Like choosing which bully to get beat
Why not use SDR (special drawing right) of IMF? It is basket currency of US dollar, Euro, Chinese Yuan, Japanese Yen, and British Pound It is perfect international currency. , So much more stable than any of individual currency, No more haggling by single country.
I want to be like the man with the yellow glasses in the advert. such a cool apartment.
You could have made the same program about the pound vs dollar in 1930s.
The effort to dedollarize really picked up steam and 2023. So all those statistics that date to 2020, are really misleading. But also the question of will the Yuan displace the dollar is the wrong question. Displace might take 10 or 15 or 20 years. But what are the smaller nearer term consequences? For example if BRICS and the global south stop using the dollar for trade in that? 40% of the global economy within the next 2 years what's the consequence?
Well if the use of the dollar in trade drops by 40% every country will likely reduce their dollar/treasuries holding by again 40%. Will that increase the interest rate on Treasures by 2%? That adds 600B/yr to the US Govt interest paymnets. Right now the US is facing a debt crisis as Repub and Dem can't agree on increasing the debt limit vs cutting spending. WIll this crisis now happen every year instead of every 2 years?
Indian rupees should take the lead as it has more potential future success and not printing crazily every year! Biggest democracy and good judiciary 👍🏻
Good luck... with the rupees
@@JesaniNizar We dont need luck we shall make it happen. 😎
Though stable, India’s country credit rating is merely BBB-. India tends to be too close to Russia diplomatically. For India to realise its potential, India needs make it clear, the country is aligned with the West. A big ask.
@@petersinclair3997 Hello Peter fyi we dont need western validation we're biggest democracy plus capitalists despite your approval or not. England,UAE,aussies are in talks with India eager to make deals and move away from china you need India to be stable in Indian ocean which makes Majority of oil transportation and other things to Eu. With American technology and Russian oil and Indian youthful talent we just need to make world more multi polar and more just world dont need anyone to take illegal advantage in any matter that's the gist.
@@petersinclair3997 we we're already the top dog along with china if u read history now also we have biggest gold reserves held by private of citizens which is more than your fort knox plus your citizens private held gold reserves(ornaments+bullions) just saying we're not weak to accept your domination without fighting back if push comes to shove our relationship with other country should be questioned if it genuinely threaten your interest which it haven't happened but your medias are portraying it like it has which sadly is partiality.
I’ll believe it *WHEN* it happens, until then I take this with a *BIG* grain of salt.
Ya. Don't hold your breath, for the USD to decline, enough to matter.
Chinese Yuan is not the only money that will used to replace dollar. Many countries using their own currency to trade with other countries.
In asean, each asean countries will trade using each currency. If indonesia exporting goods to malaysia, malaysia will pay using indonesian currency. The same with malaysia when exporting goods to indonesia, indonesia will pay using malaysian currency
LMAO, how many times did you have to blow Winnie the flu for that propaganda 😂
Isn't that same as paying each other with toilet papers?
Let's just wait for US to take a seat near UK as country with currency being replaced from it's status
That transition to the ad was horrific, especially for those like me who have autism and are sensitive to these absurd sounds
You even said it the "yuan market share chanelled via the SWIFT system was only 2.4%" in 2022. Again, via the SWIFT system.
You might be interested to look into what Ripple Labs and their product “on demand liquidity” is doing. They put out quarterly reports that paint an interesting picture.
All this talk about alternative currencies and absolutely No1 mentioned Bitcoin. I know it has a looong way to go but I feel it's inevitable. A currency that decentralized, trustless, and most importantly NO money printing
Why are you using old bill? Come on it has been 15 years already 😂😂😂
68% of the global economy FOR THE US DOLLAR!? :O
Even China would not want that the Yuan would be the worlds currency. It is a lot better for china to have its own currency that they can devalue at any given moment. That gives China more control over their economy. So a BRICS currency is more welcome and more likely
18:20 'Don't underestimate Joe's ability to (expletive) things up'
- Barack Hussein Obama
Yes, let's invest in a credit bubble!
Why is it always common thoughs that china wants total dominance on everything? In the yuan as an international currency, they dont need total dominance, they just need enough to use it to leveraging their economy. This does not mean dominance. However the US wants this kind of total dominance in order to boost shareholders values of big corporations in the US and of course use it as a weapon to put “allied” countries in lines and weaken “hostile” competitors. I see this as the idiom “do as i say and dont do what i do”
Nobody said that they'll be switching to CNY, at least not right away anyways. What people lost trust in and don't want is the use of USD. There is a difference. 10 ASEAN countries are very likely to de-dollarize now, adding to the longer list of nations.
"Yuan" means "currency". It is not the Chinese monetary denomination. The "RMB" IS the Chinese monetary denomination. Using them roughly interchangeably is ridiculous.
Based to history, dollar have the advantage to be the currency mirror of the biggest democracy in the world, and economy need a free dominancy. Which is definitely not the case of the alliance of BRICS, Bresil, Russia, China,...gang of hypocrisie.
As long as people have faith in the value of the dollar, it will remain a reserve currency.
BRICS is the Global South version of G7.
It's not an Economic block like the EU with rules & a currency that glues them together as 1 Economy/Political Block.....
U.S. Dollar will become even stronger when shit hits the fan in Pakistan, and people run to the safety of the dollar.
A currency is only worth it's popularity! The world is starting to reject dollars.
Of course... The currency that is valued on what the CCP says... Can I have some dogecoin too!
Both the Dollar and Yuan are fiat currencies backed by nothing. There is no difference. Both come out of a printer.
Yea, over valued dollar is what cause the U.S. manufacturing to lose competitiveness, but guess what happen to countries whose currency lost its values. It’s definitely not something to be desired.
You can't have a dominant currency as long as there is capital control on it.
The RMB still lags on the Forex behind the AUD and CAD. The other currencies still ahead... the EURO, the Yen, the British Pound.
The RMB is barely ahead of the HKD and Hong Kong haven't been economically relevant on the global stage since the Handover in '97.
Sensible countries should want multiple options. The CNY does not offer a good dollar alternative and the CCP is way too keen to promote it.
Why are you every where
the biggest threat to the dollar is not another currency, but rather the policies practiced by the federal reserve. with the world facing its biggest economic collapse in history, the fed is quite happy to tank the dollar to remain profitable. And it will.....
The US needs to get back on a gold or silver standard
I vote for dingleberry as the new global currency name
China buys oil in RMB and then Chinese companies refuse to take those RMB to purchases, demanded dollars - Asia Times April 20th 2023. If not even Chinese companies will take RMB for international trade how is this suppose to work.
A lot of Millionaires and corporations, even small business owners, anyone with some money from Brazil, Russia, India and South Africa will continue saving their riches in US or Europe, in safe heavens where their patrimonial assets will be protected from political unrest, dictatorships and the likes. So this common currency is a no-go from the very start.