Topic: Diversification in Global reserves. - page 2. (Read 639 times)

Actually, I don't find small arguments convincing compared to a long historical journey. The story of diversification is an obvious fact that at any time, adaptation to difficulties or prosperity can bring about major changes to the economy. Even at the present time we can speculate that blockchain technology will appear a lot in the future economy, but it is not entirely certain what will create value and attract cash flow into it.

Governments hold gold because long term it always will outperform a currency being printed to excess, they will make a profit from their own mismanagement.   Gold itself has a flat performance, no yield its price is only especially changing (long term) due to the lesser side of that equation devaluing.     So I wouldn't hold it for performance but for stability and every national bank in the world has it I think.    Russia has gold but China had none at the start of this century hence they have been the largest purchasers every year for twenty years so far as I know.
  JPM shorting I dont count as much, every short is a future purchase.   Every time BTC is compared to physical commodities it should be the same point, they are not close to being the same thing even if the prices could be traded similarly the dynamics of a non physical product like BTC wont be similar to any commodity where they have to physically move and allocate it with cost of holding and so on.   Add in that BTC has a regulated supply unlike almost anything else I dont know why we'd talk which performs worse or best, they arent trying to do the same thing.   I'd generally agree central banks will have a bias towards holding gold, at present the whole world is biased to Dollar and that bias will decline in favor of almost anything else imo.

What we are seeing here is that the interests of the government and the population are different, governments like fiat currencies as they give them a massive amount of power and the only ones that lose are those which are outside the most exclusive circles, but it is on the best interest of people not only to limit how much governments can pry into their lives, but to also limit the control the governments can have over the economy, as governments have demonstrated many times they are not to be trusted as they have crashed the economy of countless countries through history thanks to that power.

Yeah, I agree that the decentralization of the Bitcoin, became the major reasons why it won't be global reserve, and it also why most of the governments don't want to adopt Bitcoin as legal tender. They need be in control on the currency that are used in their jurisdiction. But with the declining economic condition, I think more people will try to diversify their assets and they might move to bitcoin, maybe more goverments will at least legalize bitcoin as an investment asset.

OP, the U.S. Dollar may be worse than the hardest money on Earth, Bitcoin, but if we're merely talking about macro-economics and how the value of other fiat currencies compare to the Dollar, then be prepared to accept this fact,



How much higher did those other currencies lost in purchasing power?
¯\_(ツ)_/¯


But be careful with Gold. The paper Gold market is being shorted by the banksters such as JPMorgan, https://franknez.com/jpmorgan-holds-bigger-short-positions-than-its-total-assets/

They're probably expecting a collapse in commodity prices.

Time will definitely tell us what's going to happen, but I also believe that the best thing to do in this case would be making sure that we are profiting, and that should be an important deal without a doubt. I hope that people could see where it can go, and that is an important thing. I understand that life may not be all that simple, but we could try our best the way we can.

This would allow us to get a lot better and it should not be all that weird on the long run. I know that life is not that easy like I said but making money for a nation is simple, they have billions, just put some of that in bitcoin and hold it, that would be smart. I do not know how many of them will use it though, they may not use it all that often.

i am also more on tangible assets rather than those fiat currencies. what i like about real-estate properties for example, is that their value is increasing thru time. whereas, gold or jewelries, won't depreciate much its value, if it will depreciate. it is actually more on the increasing side. and when it comes to stocks, you also need to keep up yourself about the companies you are going to invest with. sell if you feel that company is not progressing. buy shares if you think they have promising future.

USD, GBP, EUR, CNY, CHF… it really doesn’t matter how much you diversify your portfolio because all of these currencies have one thing in common. They are all FIAT and they are not backed by anything. You shouldn’t hold a lot of FIAT that’s not a good idea. Buy real assets like bitcoin, gold, land, stocks instead and you will be much happier in the long run. FIAT only goes down against the real assets in the long run so creating a portfolio of FIAT isn’t good for your finances. If you still insist on holding some FIAT, just hold USD. You don’t need to hold a basket of FIAT because it accomplishes nothing.

I go with this idea and the last part of it on the doubt bitcoin being used as reserve is correct because bitcoin is not controlled by any government and that a reason only El Salvador have been the country officially adopted it and no industrially developed countries have done that which is because they like to control what comes into their country for regulation. Like you also said in the past dollar have been the major currency for trade because of domination of USA in global financial economy with and things are changing with china , India, Russia and other countries in the south east pushing for economic competition and also presenting their local currency as center of bargain. Hence it is becoming clearer that no fiat currency will become the center of exchange no bitcoin but we are going to have more diversified currency in trade.

The government must change its mindset if it wants to adopt Bitcoin as other countries have done, because there is no way to control Bitcoin like they control fiat money in their respective countries. Each country's government can still exert their control over fiat and continue to use it as usual when they have adopted Bitcoin, so when they already believe in Bitcoin, it doesn't mean they have to immediately forget about the fiat they have used for a long time in everything.

This is indeed quite simple, but sometimes the ego of the government which continues to maintain its own ideas without changing their mindset towards Bitcoin is still an obstacle for most governments. So until now there are still many countries that have not adopted Bitcoin payments even though several countries have not banned Bitcoin from being used for transactions and also as in life.

Who told you that the US economy doesn't face any competition? Isn't the rise of China and the rise of BRICS competition from the US? If a country becomes the strongest power in the world, its currency will be considered the world currency and a reserve currency. This means that the USD can be replaced in the future if the number 1 position of the US is knocked out and replaced by another country.

You are right, bitcoin cannot yet become a global reserve asset for many reasons such as not being widely accepted as you mentioned. But with advantages even superior to gold and with growing acceptance, it is certain that it will become a global reserve asset.

It is difficult to give a definite answer, because everything is possible. Let's wait and see what fate bitcoin will have as a share of the world's reserves. I am deliberately talking not about cryptocurrencies, but about bitcoin. This is the only decentralized cryptocurrency these days and I am sure that representatives of certain countries also paid attention to this. I don’t think that countries will keep their reserves in cryptocurrencies, when most of them are centralized and you can influence the issue of coins, freeze accounts, etc. This creates unnecessary risks and is no better than the dollar. I assume that first of all their eyes will be fixed on bitcoin. For example, El Salvador accumulates bitcoin, not dogecoin, right. Here is answer to you.

El-Salvador may be one of the countries that has made Bitcoin a reserve for now and adopted it directly (used for transactions in that country). This is the first step for Bitcoin to prove itself and be ready to shift the influence of the dollar.

Bitcoin is moving slowly but surely, starting with support from the community alone, continuing to grow until there is one country that believes in Bitcoin, Bitcoin still has a long story and I am sure there will be other countries like El-Salvador that are ready to accept and adopt BTC legally.

If we are talking about investing in Bitcoin, I don't think we will have any problem there; instead, the only thing I see that is problematic here is that the government is still thinking about how they can control it, but they also know the answer in this matter is that it is not possible no matter what else they do.

That's why the government can only adopt or recognize Bitcoin or not recognize it, and if they do that, they will for sure be abandoned by other countries that will recognize it. It's that simple.

With the current volatility and the adoption scale of Bitcoin the answer is no, the reason why USD became Global Reserve is because United States was the biggest economy without any competition, they supply many products and they also lend money to other countries, and those process required USD, same reason why Chinese Yuan /RMB is raising this day, Bitcoin wasn't adopted by any country that has huge economy, and bilateral transaction were never use Bitcoin, so I doubt that any country would consider Bitcoin to be global reserve.

Whoever looks at Bitcoin and its impact on individual income believes that the same thing may apply at the national level, but countries investment in a different way from individuals, investment funds or companies are the link that may be between Bitcoin and countries, as these funds hold Bitcoin and grant loans to countries, exactly as was done with gold.
What I am suggesting is against the idea of Bitcoin, but it is the option currently available and this may change in the future.
I see that more countries are abandoning the old reserve concept and replacing it with borrowing from wealth funds to which oil revenues or any other revenues flow.

Bitcoin can comfortably serve that role, but you have to be worried about the governments feeling too entitled and wanting to control its price, development, consensus, software, etc. If they cannot do this, they will not take it very seriously.. Fortunately, it's impossible for them to control Bitcoin, as countermeasures have been put in place to prevent that. They could end up settling for centralized cryptocurrencies which will eventually end up as inflationary fiat currencies since there will always be great temptation to inflate and weaken the value of currencies they control.

Gold and Precious Metals can be better alternatives for countries with weaker currencies that want to rely less on USD or avoid it completely. They could continue to use their national currencies as Medium of Exchange between themselves while using things like Gold as Store of Value. Atleast they are national resources they have somehow been able to control their supplies and prices.

Bitcoin is special.

Looking back at the asset management journey of previous generations, we can feel that there will be no tool that will maintain stability in value forever. Even like bitcoin we hear many positive things as a solution to the payment problem, but the reality is that the old system still needs time to adapt or upgrade.

Just like the current story when the internet becomes popular and people can easily perform actions through simple gestures, I think with future developments there will also be many things that will be integrated and applied in life.

Are you aware that there are factors to consider while investing in cryptocurrencies. We already know that cryptocurrency is decentralized, meaning that it is not controlled by any government country. Though there are other cryptos that are regulated due to their centralization.

And because cryptocurrency is decentralized, this is one of the aspects that attracted investors to invest in it. contrasted to the global financial system, which is known to be having a difficulty with rising inflation and the present crisis in Ukraine, which is making it difficult for central banks to handle reserves.

Yes, over the years, the buying power of USD has reduced, but I think you are exaggerating these stats a bit. The US dollar will remain the global reserve currency in the future. Yuan is also used by a few countries as a forex reserve option. BRICS countries are looking to dump the dollar as a reserve currency in future.

Bitcoin can never be a global reserve currency. The reason is its volatility. Countries store stable currency as their reserve, and Bitcoin is extremely volatile and cannot be used as a storage of value on the global stage.
I think at some point in the near future, a small percentage of global financial transactions might be in Bitcoin.