Posted on 04/02/2022 12:34:57 AM PDT by caww
Gita Gopinath, first deputy managing director of the International Monetary Fund (IMF), has warned of a gradual decrease of the dominance of the US dollar in the world financial systems after the unprecedented financial sanctions imposed on Russia after its incursion in Ukraine.
The sanctions, from restrictions on Russian banks to measures targeting its economy, imposed by Western nations, could cause a more fragmented international monetary system.
“The dollar would remain the major global currency even in that landscape, but fragmentation at a smaller level is certainly quite possible,” Gopinath told the Financial Times.
“We are already seeing that, with some countries renegotiating the currency in which they get paid for trade,” she added
The decline of US dollar dominance is not the result of reserve accumulation by a small number of large reserve holders with a preference for non-dollar currencies.
Rather, the IMF sees the active portfolio diversification by central bank reserve managers as the main reason for this decline.
The share of nontraditional reserve currencies, defined as currencies other than the US dollar, euro, Japanese yen and British pound sterling, rose from negligible levels at the turn of the century to roughly $1.2 trillion and 10 percent of total identified reserves in 2021.
(Excerpt) Read more at trtworld.com ...
Gita is full of crap
Thnx for your dos rupee, which is only 78 to 1 compared to the dollar and everyone owns, buys and sells dollars.
Not a choice...
We are likely to see the most tremendous wealth transfer since the fall of the Spanish Empire.
All according to plan.
I would imagine there was a reason USA’s handlers goaded Russia into invading.
It’s completely feasible to move to another reserve currency. All they need is a country willing to play the patsy - to absorb the cost of large and ongoing trade deficits. If China is willing to hollow out its industry in order to make the yuan a significant reserve currency, that should be entertaining to watch. Note that Germany, Japan and Switzerland, some of the candidates for reserve currency boltholes, have negative interest rates for this very reason - to discourage foreigners from parking their cash there. Reserve currency status artificially jacks up your currency and makes your exports less competitive.
The Chinese want the buying power of reserve currency status without taking the trade deficits that go with that buying power. Here’s a hint. It doesn’t work that way.
There’s another big issue - the country with the biggest economy naturally has the biggest currency exchange volumes. That makes its currency exchange trades the ones with the lowest bid-ask spreads. If you use a different currency, one party has to be willing to accept the additional costs from that arrangement. If the Saudis are willing to accept a lower price from the Chinese, or the Chinese are willing to pay a higher price, maybe this will work out to everyone’s satisfaction.
But someone in there is getting the short end of the stick vs working with the dollar. The real bottom line is that people use the dollar not because they like Americans. They use the dollar for the same reason they use iOS or Android phones - they offer the most bang for the buck. Whether operating system or currency, their association with the US has only the barest relationship to the reason people use them.
The dollar is the reserve currency of choice for two reasons - the size of the economy and the fact that unlike Japan, Germany and Switzerland, we don’t charge people interest to park their reserves in dollars to discourage them from doing so. The yuan will *never* be a reserve currency. They don’t want the trade deficits, and no one trusts them.
The Chinese king (Trump’s verbiage in frank conversation with Xi) wiped out $100b is American stockholder value by declaring Chinese for-profit education companies listed on US exchanges non-profits. I wouldn’t trust Xi with the loose change from a trip to the grocery store, never mind a nation’s forex reserves.
Not true. De-dollarization can be achieved by many ways. Rising commodity prices and the prices of Chinese-made goods is one of them.
[Not true. De-dollarization can be achieved by many ways. Rising commodity prices and the prices of Chinese-made goods is one of them.]
It’s really pointless for us to go back and forth over this, since you’re operating from the premise that American jackboots keep the US an economic power. Whereas my perspective is that it’s US economic strength that allows for a substantial military.
Putin owns the Euro now.
Put that in your pipe and smoke it.
TRT World ?? ...lmao
“In March 2020, the United States Justice Department required TRT World’s Washington operation to register as an agent of the Government of Turkey, engaged in political activities, under the anti-propaganda Foreign Agents Registration Act. TRT World’s argument that it is independent was rejected by US officials who found and claim that the Turkish government “exercises direction and control of TRT by regulation and oversight, and by controlling its leadership, budget, and content.”
[Putin owns the Euro now.
Put that in your pipe and smoke it. ]
In a little over a year after Trump, we now have wide open violent borders once again, insane inflated prices in every direction, country killing gas prices, threats of WWIII, talk of another housing collapse, empty shelve at stores, and a president who slurs his words and is suffering from dementia, as they create policies that can be mistaken for sabotage.
Based on what factors?
[Based on what factors?]
Russia doesn't need to go crawling back to the broke loserclowns of the West.
He's going to be making the Oaf Doltzs of Europe do stupid pet tricks for everyone's amusement to get their energy - and Gazprom will make them pay for the privilege converting their Euros to rubles.
Disclaimer: I hang out on economics websites, and have for years.
You can't sell your ponypoop to me.
The children in the White Romper Room didn't consult with the Fed before they cut Russia out of SWIFT.
How's that working out?
LOL. That’s mightly powerful analysis to back 1/150 fundamentals. Based on PPP the real ruble value is about 1/45-50. According to the previous model, cheap ruble was favored by the Russian big businesses which had their costs in rubles and export incomes in dollars. This policy proved a failure nowadays, hence it makes no sense to keep ruble cheap anymore.
[Russia doesn’t need to go crawling back to the broke loserclowns of the West.
He’s going to be making the Oaf Doltzs of Europe do stupid pet tricks for everyone’s amusement to get their energy - and Gazprom will make them pay for the privilege converting their Euros to rubles.
Disclaimer: I hang out on economics websites, and have for years.
You can’t sell your ponypoop to me. ]
The EuroClowns aren't laughing now. They're looking at the baseball bat that Pooty glued 40 grit sandpaper to, and are wondering where that's going...
[The children in the White Romper Room didn’t consult with the Fed before they cut Russia out of SWIFT.
How’s that working out? ]
Yep, Jao told that ruble is 200 to dollar. I’d like to get this deal. WH says Russia is propping the ruble artificially, except centbank didn’t sell a single dollar on MOEX to support rate, but more to the contrary, to rip off foreign funds trying to sell the Russian assets.
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