Topic: Effects: Over-reliance on the US dollar - page 2. (Read 494 times)

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?

The dollar has built trust. Countries trust the dollar enough to use it as their reserve currency. They didn't trust this currency simply because it's the currency of the United State, they choose this currency because it's a strong currency that doesn't devalue so much compared to other currencies. The Euro is also a reserve currency.
Despite the crises of the dollar, it's still the first world reserve currency before the Euro and then the yuan. This is because people still trust the dollar, so they are not just about to start dumping it because Russia and China say so. If China wants the yuan to be the first reserve currency then they have to show the world that the currency can maintain its value.

I believe countries that do not produce much, or should I say countries that import almost everything get affected the most by the upward and downward movement of the dollar. This is why developing countries that import almost everything suffer. The price of the dollar affects every single commodity in their country and instead of them looking inwards and finding a way to get better and start producing stuff they need, they blame the dollar. It's always easier to blame others for our misfortune but if we are being honest, the real issue lies within us.

Gotta say, I'm not entirely sold on the idea that shifting focus to the yuan and other currencies is the ultimate fix for our overdependence on the good ol' US dollar. Sure, clinging to the dollar can limit a nation's international trade with countries using different currencies. But is diversification the real key?

Hold up, let's not gloss over the potential hazards linked to China's expansion of the BRICS. China's ballooning economic and geopolitical clout could fuel tensions and even conflicts between nations. And who's to say what kind of economic strings China might attach to countries that embrace the yuan?

I'm all about skepticism and critical thinking. We've gotta scrutinize the pros and cons of each move, especially when it comes to the world's economic game plan. Maybe the answer isn't diversification, but finding ways to cut our reliance on any single currency. The future's a mystery, but one thing's for sure: caution and skepticism are our best allies.

Thanks OP for initiating discussion on a very important topic, which is a major concern of all those countries who heavily rely on US Dollar for their financial stability. As the economic situation in the USA continues to change, US economic power is on decline, it is not what it used to be in earlier days. Depending on a single currency either it is US dollar, Chinese Yuan or any other one, is very risky as its fluctuation can have significant impact on economy.

In my opinion, diversification is the best solution to reduce risk associted with fluctuation in value of currency.

Gotta say, I'm not entirely sold on the idea that shifting focus to the yuan and other currencies is the ultimate fix for our overdependence on the good ol' US dollar. Sure, clinging to the dollar can limit a nation's international trade with countries using different currencies. But is diversification the real key?

Hold up, let's not gloss over the potential hazards linked to China's expansion of the BRICS. China's ballooning economic and geopolitical clout could fuel tensions and even conflicts between nations. And who's to say what kind of economic strings China might attach to countries that embrace the yuan?

I'm all about skepticism and critical thinking. We've gotta scrutinize the pros and cons of each move, especially when it comes to the world's economic game plan. Maybe the answer isn't diversification, but finding ways to cut our reliance on any single currency. The future's a mystery, but one thing's for sure: caution and skepticism are our best allies.

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

This is why bitcoin will be a lot better because it is not on the side of anyone. It's not china, it is not Russia, it is not EU, it is not USA. It's us, the whole world, globally it is all together. This is why if you dislike America, you can buy bitcoin, if you like china then you can buy bitcoin.

Yuan, Ruble, Dollar, Euro, all should be gone and all should be forgot because they are the old news and they will not really make a profit for you neither. Nations who invest into bitcoin like El Salvador will get richer and richer, because they are going to be rich anyway due to taxes, and if they keep on investing that back into bitcoin they will be able to buy so much and when it goes up on the bull run they will make a big profit.

Choose any other country but not China for sure. I am using products in my office which are mostly imported from the USA or European parts because of the quality they provide. We tried a few imports from China but they are horrible in quality and reliance. I am not sure how they did it, but it's all about bulk manufacturing which is keeping China at its peak. The only power China has is its huge population and its willingness to work with the lowest wagers that it can get.

It's hard to find countries accepting Yuan as the currency reserve. If I would have been in any of those countries, I would just shift to the country where USD is accepted. Lolz.

Anyways, China can not take over OR compete with USD for sure. USA has been in the business for ages and it can not be shifted just like that. Imagine the chaos that other countries will have to bear during such reserve.

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.

It's hard to find countries accepting Yuan as the currency reserve. If I would have been in any of those countries, I would just shift to the country where USD is accepted. Lolz.

Anyways, China can not take over OR compete with USD for sure. USA has been in the business for ages and it can not be shifted just like that. Imagine the chaos that other countries will have to bear during such reserve.

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.

Choose any other country but not China for sure. I am using products in my office which are mostly imported from the USA or European parts because of the quality they provide. We tried a few imports from China but they are horrible in quality and reliance.

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.

Choose any other country but not China for sure. I am using products in my office which are mostly imported from the USA or European parts because of the quality they provide. We tried a few imports from China but they are horrible in quality and reliance. I am not sure how they did it, but it's all about bulk manufacturing which is keeping China at its peak. The only power China has is its huge population and its willingness to work with the lowest wagers that it can get.

It's hard to find countries accepting Yuan as the currency reserve. If I would have been in any of those countries, I would just shift to the country where USD is accepted. Lolz.

Anyways, China can not take over OR compete with USD for sure. USA has been in the business for ages and it can not be shifted just like that. Imagine the chaos that other countries will have to bear during such reserve.

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.

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

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.

You just spoke my mind. It will be better to have a common currency that every nation will use for international trade. Alternatively, let all the nations of the world be willing to accept the local currencies of others regardless of the economic power of the such nation.

China's and BRICS' intention is not to help developing nations but to make them rely on their proposed common currency. China is also seeking to make its currency as powerful as the dollar. If you analyze the intention of these anti-dollar forces, you will discover that they also have a political undertone. Developing nations remain the prey to these big nations. But smart leaders in these third-world nations could use this power tussle between these world powers to secure favorable bilateral trade deals.

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

What I've been reading of late on the economics section by the newbies on new topics baffles me, many of them shouldn't have been written to be candid. This is one of them, because if the USD is not the world's reserve and the most recognised currency, which currency would you nominate that would serve the decades of stability?

Over-reliance to a foreign currency is, of course, not good. But this applies not just to the USD but also to other currencies like the Chinese renminbi, the euro, pound, Japanese yen, Indian rupee, and so on. So a shift to the Chinese yuan as a way to address over-reliance on the US dollar is not any different. For one, it still means that whatever happens to a foreign currency and its economy and even its socio-political environment will still have an impact on a country's economic situation.