Russia and China are brewing up a challenge to dollar dominance by creating a new reserve currency

Business Insider ^ | June 24, 2022 | George Glover

[viewfromthefrontier]

Russia and China are developing a new reserve currency with other BRICS countries, President Vladimir Putin said. The basket currency would rival a US-dominated IMF alternative and let Russia widen its influence. The dollar's dominance is already eroding as central banks diversify into the Chinese yuan and smaller currencies.

"The matter of creating the international reserve currency based on the basket of currencies of our countries is under review," Putin told the BRICS Business Forum on Wednesday, according to a TASS report. "We are ready to openly work with all fair partners."

While it's not a reserve currency, the SDR is based on a basket of currencies made up of the US dollar, the euro, the British pound and Japan's yen — as well as China's yuan.

One possibility is that the BRICS basket currency could attract the reserves not just of the group's members, but also countries already in their range of influence, he suggested. These include nations in South Asia and the Middle East.

[GreenLanternCorps]

If you embrace the Red Chinese Yuan, whose value will be determined by the whims of Xi Jinping and the Chinese Communist Party, you deserve what happens to you.

[Parmy]

In today’s world anything can be made into currency since all it has to be is printed. Then the challenge is go get others to value it. Since no modern currency has anything hard backing it, just making a fiat currency shouldn’t be that hard. The hard part, as I said, is to get others to value it.

[teeman8r]

putting faith in a structure of forced economic value is foolish yet, the US dollar is moving farther from a value of economic strength to hearsay.

[ClearCase_guy]

Similar to Europe deciding to become energy dependent on Russia. Might seem like a swell idea at the time, but anyone can see that it could go horribly wrong when the other party decides to do what it wants without asking permission.

[Boogieman]

How about a reserve currency that isn’t based on the whims of central banks or the whims of government central planners?

How about basing it on, I don’t know, something rare and durable and portable that retains value well. I know it’s a crazy idea, but it just might work...

[canuck_conservative]

That’s why Europe needs to be energy-independent of Russia, so it won’t have to deal with endless cutoff threats

and Europe can do that, simply by building more coal and nuclear power plants, and importing reliable Middle Eastern LNG ... then say goodbye to Russia

Putin can’t do a damn thing about it

[allendale]

Commerce and trade is much too complicated without a common reserve currency and the banking system to implement it. Establishing a reserve currency must be based on underlying wealth, a stable political system that values and enforces under law private property and a willingness of those who establish such a currency to adhere to those values and practices. Those values are coming under question as the US, the issuer of the commonly held reserve currency which for domestic political purposes has printed dollars wildly and has inhibited the creation of wealth, and are not widely held by the BRIC countries. One of two things will occur. Faith in the US dollar and America itself will continue to erode and international trade and commerce will suffer or a whole new system will evolve that wbe independent of a given currency. Doubt it will be crypto currency.

[Huskrrrr]

The Fed arrogantly believes the Dollar will forever be the reserve currency, while continually inflating the dollar supply.

[packagingguy]

“simply by building more coal and nuclear power plants, and importing reliable Middle Eastern LNG”

Greta says no.

[kiryandil]

There's this One Weird Trick, where you don't go around seizing foreign dollar reserves like a fricking pirate, just because some country has their money parked in banks you can get at.

Tends to make countries that are watching think about safer places for their cash.

[canuck_conservative]

and Russia/China would be safer?

that’s idiotic

[Cathi]

It seems to be difficult for many people to adjust to the changing global power dynamics. I assume it was probably like this for Britain when they were on the decline and we were on the rise. And for the many empires before them.

TASS
In the Kherson region from June 29, 1.5 rubles will equal 1 hryvnia, previously the rate was 2 to 1, the regional administration reports.

[T. Rustin Noone]

Someone once suggested that the value of currency be equated to a single, indispensable commodity, such as a photon or a foot-candle of light. Whatever the cost to produce a foot-candle, that was the value of the currency.

[kiryandil]

and importing reliable Middle Eastern LNG

If we had ham, we could have ham and eggs.

If we had eggs.

If we had reliable Middle Eastern LNG, we could import it with our LNG re-gasification terminals.

If we had LNG re-gasification terminals.

Henry Hub pipeline natgas is at 6.63 per MMBtu. Dutch TTF LNG is at 40.286 per MMBtu.

Two gas stations - one right in front of you with gas for 5 bucks a gallon, the other you have to get a 4 wheel drive vehicle to drive up a washed-out road up a mountain to fill a bunch of gas cans to fuel your car. The price up top is 30 bucks a gallon.

Which one does the Smart Money go with?     

[kiryandil]

and Russia/China would be safer?

It's weird that I didn't mention Russia or China in my post.

You created that strawman out of thin air.

I was just pointing out the currency ship that was flying the skull and crossbones.

[canuck_conservative]

If we had LNG re-gasification terminals

on the way soon, bud

and then Europe can kick Russia to the curb

[kiryandil]

The Fed arrogantly believes the Dollar will forever be the reserve currency, while continually inflating the dollar supply.

Some say it's going to be an inflation bloodbath when those garbagebucks come home...

[canuck_conservative]

The “bank seizures” only apply if you illegally invade other countries, like Russia did

see, that’s why no other countries funds are seized ... not even North Korea

that’s the big difference you somehow missed

[kiryandil]

on the way soon, bud

I will gladly pay you Tuesday for a hamburger today, say the FR economic Wimpys...

Freeport is down for the count, chummyboy. End of the year, they say - but that's a LONG time coming, it is. LOLOL!!!