As we see many videos claiming that the US Dollar will cease to be the main currency, I wanted to investigate on this. De-dollarisation rolls off the tongue easily enough, but its supporters and advocates do not really know that they are playing with fire.
The U.S. Dollar is not the world’s prefered currency by chance. The U.S. Dollar is not only backed by the strongest economy in the world, but also by the most reliable and transparent institutions; currently, China is not even close to having transparent, independent institutions similar to the U.S. Nevertheless, China's economy may one day become 4 times larger than the U.S. economy. So, the question posits itself: could the US Dollar be dethroned as the worlds reserve currency? And which currency could substitute it? the Chinese Renmimbi?
Why the US Dollar WON'T colapse?
byu/bredalien ingeopolitics
2 Comments
China’s economy becomes 4 times larger than the US? So just multiply population with equal GDP per capita? This is completely nonsense.
Secondly, don’t talk de-dollarization without at least a basic understanding of how macroeconomics work. Balance of trade, balance of payments, money supply, interest rates, productivity, consumption, investments, fiscal and monetary policy. Otherwise this becomes a whose d**k is larger discussion – it would be devoid of critical content.
EDIT: Go check out Dr Michael Pettis. He speaks on this topic and is a Professor who lives in China and teaches Finance. Alternatively you could also look on youtube for Money & Macro (another economics professor) They actually explain the macroeconomics of currency. In short – China does not and never did want the Renminbi to be a reserve currency and until it does, it won’t happen. Without the agreement of a country’s central bank, that central bank currency will never become a reserve currency and the PBOC will not agree to this because the CCP will not agree to this.
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