Topic: Effects: Over-reliance on the US dollar (Read 452 times)

In my opinion, sanctions can have a certain impact on underdeveloped countries. If the level of development of the country is sufficient, the sanctions will simply lead to the restructuring of the economy to find a way out. In doing so, much will depend on the success of the import substitution policy. Politicians need to look for other ways to solve problems rather than impose sanctions.

In my opinion, sanctions can have a certain impact on underdeveloped countries. If the level of development of the country is sufficient, the sanctions will simply lead to the restructuring of the economy to find a way out. In doing so, much will depend on the success of the import substitution policy. Politicians need to look for other ways to solve problems rather than impose sanctions.

I think the extensive use of sanctions as a tool of foreign policy against developing nations to influence their decisions has been counterproductive in the long term. The rise of emerging economies like BRICKS can be seen as a direct consequence of this flawed foreign policy approach. Every phenomenon has its own time, declining value of dollar and nations intent to reduce their reliance on US dollar as international currency for import/export of goods and services, unmistakably signals that there is challenging time for dollar in the future.

Looking from the perspective of counties that turn to gold and not Bitcoin, you can't blame them. You don't expect a country to keep its reserve in relatively new technology. Gold has been around forever and it is trusted. It can be also volatile like Bitcoin, but it's usually for the short term. Gold is still the best currency.

It's strange that you mentioned this on China but didn't put it as one of the main weapons of the US when pressuring other countries to follow their demands. They have been leveraging this for years after the WW2 using economic sanctions and it seems this is also the reason why other nations are shifting or applying to become part of BRICS.

Looking from the perspective of counties that turn to gold and not Bitcoin, you can't blame them. You don't expect a country to keep its reserve in relatively new technology. Gold has been around forever and it is trusted. It can be also volatile like Bitcoin, but it's usually for the short term. Gold is still the best currency.

Do nations really need to have a financial reserve in a particular currency of a nation? What are the implications of having reserves in multiple currencies? The dollar has been very stable because the US and its allies have always controlled the world economy. Currently, more nations like China and others have built their economy and they also want to control some segments of the world's economy.

The point is diversification. Should any single currency fail, your portfolio will not entirely lose its value. USD is not stable anymore. Setting aside inflation -- more countries are becoming cautious about the U.S. governments ability to levy sanctions and forfeit assets against a particular country for their own internal political battles. Should you have USD and your country becomes barred from doing business with companies that the U.S. government has jurisdiction over, your currency loses a fair bit of value. The alternative isn't Yuan, it would be a decentralized asset. Some countries are turning to gold but IMO bitcoin would solve a lot of the issues that currency reserves have.

The most they could ever do right now is to make sure that they are regulating it harshly if they want to, USA doesn't but China sort of does. That's all their power could do, anyone all around the world could still continue to use it anyway they want and bitcoin will continue to exist. They could just go back to their own nations and do what they can with the power they have over their own nations, we will continue to be global.

Ove-reliance on the US dollar can have both positive and negative effects. Some of the benefits are Stability Us dollar is widely accepted and recognized as a stable currency, which can help foster confidence in global financial markets. US dollar is highly liquid which means it can be easily bought and sold around the world. Using single currency for international transactions can help simplify and streamline the process, reducing transaction costs and increasing efficiency. There are also potential drawbacks to over-reliance on the US dollar including Vulnerability if the US economy experiences a downturn or the value of the dollar declines significantly it could have a ripple effects throughout the global economy. Dependence and also inequity which can create imbalances in global trade and finance, as some countries may be disadvantaged by having hold large amounts of US dollars in reserve.

Over-reliance on the US dollar can have several negative effects on countries that heavily depend on it as their primary reserve currency. With the expansion of BRICS (Brazil, Russia, India, China, South Africa), there has been a growing trend of countries diversifying their reserves away from the US dollar and towards other currencies, including the Chinese yuan.

One of the primary effects of over-reliance on the US dollar is that it can make a country vulnerable to fluctuations in the value of the dollar. If the dollar weakens, the value of the country's reserves also declines, which can have negative implications for their economy.

Furthermore, being too dependent on the US dollar can limit a country's ability to conduct international trade with other countries that use different currencies. This can lead to increased transaction costs, as well as make it more difficult to negotiate favorable trade agreements.

In relation to China's expansion of the BRICS, their efforts to promote the use of the yuan as an alternative to the US dollar could potentially have several positive effects for countries that adopt it. For example, it could lead to increased trade with China, which is currently the world's largest exporter. It could also reduce the vulnerability of countries to fluctuations in the value of the US dollar.

However, there are also potential risks associated with China's expansion of the BRICS, particularly with regard to its geopolitical ambitions. Some countries may be concerned about the growing influence of China and its potential use of economic leverage to achieve political goals.

Overall, over-reliance on the US dollar can have negative implications for countries that heavily depend on it, and the expansion of the BRICS could provide an opportunity for countries to diversify their reserves and reduce their vulnerability to fluctuations in the value of the US dollar. However, there are also potential risks associated with this shift, particularly with regard to China's growing economic and geopolitical influence

Ove-reliance on the US dollar can have both positive and negative effects. Some of the benefits are Stability Us dollar is widely accepted and recognized as stable currency, which can help foster confidence in global financial markets. US dollar is highly liquid  which mean it can be easily bought and sold around the world.

This is why we are in bitcoin world, we know that every government in the world will ruin the nations and there is nothing that can bring it back and it's all terrible. Which is why we should be considering the fact that it's not going to help anyone to keep investing into these fiat currencies or hold any. I personally love crypto because neither USA government nor China prints it, they can't, they can't even control it.

Your post is only half correct. What you are missing is the similarities between dollar and yuan. They are both terrible if a country decides to reply only on those currencies that would be controlled by "others" not them. In other words if in 10 years from now we see dollar is replaced by yuan, that world will be the exact same world as today!

The only difference at this point is that China is not using Yuan as a weapon like US does. That means many countries prefer using Yuan instead of Dollar. But so far it seems like a passing thing before they build alternative means of trade.

Over-reliance on the US dollar can have several negative effects on countries that heavily depend on it as their primary reserve currency. With the expansion of BRICS (Brazil, Russia, India, China, South Africa), there has been a growing trend of countries diversifying their reserves away from the US dollar and towards other currencies, including the Chinese yuan.

One of the primary effects of over-reliance on the US dollar is that it can make a country vulnerable to fluctuations in the value of the dollar. If the dollar weakens, the value of the country's reserves also declines, which can have negative implications for their economy.

Furthermore, being too dependent on the US dollar can limit a country's ability to conduct international trade with other countries that use different currencies. This can lead to increased transaction costs, as well as make it more difficult to negotiate favorable trade agreements.

Over-reliance on the US dollar can have several negative effects on countries that heavily depend on it as their primary reserve currency. With the expansion of BRICS (Brazil, Russia, India, China, South Africa), there has been a growing trend of countries diversifying their reserves away from the US dollar and towards other currencies, including the Chinese yuan.

One of the primary effects of over-reliance on the US dollar is that it can make a country vulnerable to fluctuations in the value of the dollar. If the dollar weakens, the value of the country's reserves also declines, which can have negative implications for their economy.

Furthermore, being too dependent on the US dollar can limit a country's ability to conduct international trade with other countries that use different currencies. This can lead to increased transaction costs, as well as make it more difficult to negotiate favorable trade agreements.

Do nations really need to have a financial reserve in a particular currency of a nation? What are the implications of having reserves in multiple currencies? The dollar has been very stable because the US and its allies have always controlled the world economy. Currently, more nations like China and others have built their economy and they also want to control some segments of the world's economy.

Yes, a very important question, is the yuan or the euro the solution? of course no!!!

In my opinion, neither the yuan nor the euro nor the ruble nor any fiat is the solution. Either diversification or a decentralized currency that is not linked to any entity, economy or institution. This is the solution, as I see it.

The transition from pegging to the dollar to pegging to any other central currency will not end the problem. Rather, all there is is that we will move from the domination of the dollar and the United States to the domination of another country, and the entire global economic situation remains linked to this economy.

So the best solution is either diversification or decentralization.

Couldn't have said it any better.
However things get, it will always be better to have a particular currency or set of currencies that should be used for international trade. Everybody cannot be trading in his own local currency. So if the dollar is not the answer, does that make the yuan the answer?