Posted on 09/12/2023 7:25:41 PM PDT by Gunslingr3
“BRICS will too.”
Really? Which BRICS nation will be trusted to be the location of the gold vaults? If they knew the answer to that question, they would have already done it.
That’s why I have repeatedly posted that BRICS won’t be a threat to the US dollar until the S in BRICS stands for Switzerland.
This is not 1945 America. It is deeply in debt and starting to experience uncontrollable inflation.
LOL! The US was not in debt at the conclusion of WWII in 1945? That's a claim! :-)
India and China have been fighting a low level border war for the last half century and have nuclear weapons pointed at each other (indeed China is the reason India developed a nuclear weapons program in the first place). I'm sure as soon as they resolve their differences, they'll figure out the common currency issue. :-)
Yeah I get the argument, but it's overplayed. Demand for dollars has more to do with investment in the United States than it does with use as a reserve currency. The US was and is by far the best place to invest in the world for a multitude of reasons.
What's the problem with that? Other countries are willing to give us their resources in exchange for paper. It's a good deal for us!
Very predictable response. We are 30+ trillion in debt and 100 trillion in unfunded liabilities. We wish we had post WWII debt. We climbed out of that pretty easily.
We are also becoming a third world totalitarian country. That will severely limit our ability to deal with our financial and societal problems.
When sanctions force them to trade in a different currency, it would be journalistic malpractice to leave out the reason the Russian's traded oil for rupees, and then got screwed by Indian capital controls.
To accurately point out that saying that the US is in debt now, unlike 1945 is a ludicrous comparison since the US was hugely in debt in 1945? Obviously there are tons of other differences, but that's not one of them.
We are 30+ trillion in debt and 100 trillion in unfunded liabilities.
I'm a deficit hawk but that's apples and oranges because the US GNP was $228 billion in 1945 and is $27 trillion today. Actual debt to GNP has stayed about the same (obviously the difference is we haven't just come out of a World War and this level of debt isn't sustainable).
That’s my point.
The BRICs currency is not going to happen, and there is a strong incentive for both the EU and the BRICs countries to switch from the dollar to the Euro for international trade transactions.
The Euro is in 30 percent of foreign exchange transactions, the crosses exist for every country. The Euro sovereign debt market is not as deep as the US Treasury market, but it is still huge.
But it will work, and that’s what the BRICs want - a viable alternative to get out from under the US dollar. And the EU gets the benefit of printing the international currency, instead of the US.
The US Regime can’t function without the $US as the international currency. They won’t be able to afford imports, and won’t be able to afford a trillion dollar a year National Security State.
It can’t happen soon enough !
“What’s the problem with that? Other countries are willing to give us their resources in exchange for paper. It’s a good deal for us! “
The problem is when the US dollar falls as the reserve currency.
Then no-one will give you anything for your paper, and decades of goods exchanged for nothing means the US can’t produce anything for itself.
“Demand for dollars has more to do with investment in the United States than it does with use as a reserve currency.”
The magnitude of foreign exchange transactions and the demand for dollars that goes with it dwarfs the other demand for dollars.
The magnitude of foreign investment in the USA is on the order of $500 billion per year.
Foreign exchange reserves held as the dollar are on the order of 7 trillion.
https://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves
Total Eurodollar lending outside the USA is on the order of 13 trillion.
Foreign exchange transactions are 7 trillion PER DAY. With 88 percent using the US dollar.
https://www.bis.org/statistics/rpfx22_fx_annex.pdf
The difference is that we are locked in with no hope of paying down the debt. It will just grow larger and larger until the inevitable. The rest of the world can see that. The dollar will need to be replaced. Also, America’s internal problems which are substantial and completely unfixable will just make matters worse.
I think that this stubbornly high inflation is the beginning of the end.
Because the EU doesn't need to -- that stuff primarily falls back on the dollar. In terms of overall sanctions, and grief reflected back to them, the Euro's are doing more.
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