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Topic: Effects: Over-reliance on the US dollar - page 2. (Read 452 times)

newbie
Activity: 27
Merit: 5
April 16, 2023, 01:49:50 PM
#27
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.

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.

It's not just right to depend on fiat... First, each one of you should go check the definition of fiat and how it originated, the meaning and what two words combines to make the word fiat.

Just to ease thing's up, it's comprises of power and control.
Fiat rather isn't backed by anything solid or sound but the government, it's quite shameful to see most of you trusting the US Dollar, yes over the years, but the US Dollar is just paper money whom they assign security tags all over it to secure it.

Meanwhile, after all of these trust for the US Dollar, they charge you hugely just to keep your money, it would make much brain if you've kept them in the pigeon hole in your house rather than the banks and government who are simply in charge.

To run away from these control and power enforced on you by the government, everyone has to know about bitcoin, my pal who Introduced me here has said this are one of the reasons bitcoin was created and they help solve and put a stop to over printing of the US Dollar, which we all fail to know that their are some fake printed dollar bills but bitcoin is authentic it can't be faked. So you all that trust the dollar has work to do.
legendary
Activity: 3752
Merit: 1864
April 15, 2023, 05:30:55 AM
#26
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.


The thing is that these "fighters against the dollar" do not quite understand what they are doing. No, I'm not talking about China Smiley This is about the rest of the BRICS members.
And as you rightly noted - they are on a wave of hysteria "we will punish the United States for the fact that we cannot produce anything normally and competitively," they do not even notice how they are being pulled into China's black hole. And getting out of there will be almost impossible, or very difficult, with dire consequences / stress for their economies. Believe me - in a few years, at least some of the economies of the BRICS countries will be one memory. They will all become China's donors, and sinkholes for yuan inflation.

The essence of the problem is that the world economy needs some kind of unified means of payment. Now it's a dollar. In fact, it is the blood of the world economy. Yes, it works for the US. But this does not create real problems, except for the rogue countries, countries under sanctions, and today's China, which replaced Russia on the bipolar globe, and which has problems with the economy.
And diversification, i.e. the introduction of 5-10 other settlement currencies will really create inconvenience and problems for players in the world market!

PS You will laugh - but 4-6 months ago, when this hysteria began, I said - that there will be no multi-currency exchanges in these countries, there will be only RMB, and because China needs it. He will be the "master" of this union, and all the rest of his obedient servants...
legendary
Activity: 1162
Merit: 2025
Leading Crypto Sports Betting & Casino Platform
April 14, 2023, 10:39:05 AM
#25
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

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.



While I agree with you, I must also say that there are not many currencies for the Nation treasuries to diversify. It is mostly, the American Dollar, Euro, Yen Britain Pound and not much more. Gold is also an option but my point is that the American dollar had become the reserve currency because the ease and advantage it had/has.

It was accepted worldwide and one only had to be aware on the economics of a single country.

I still believe it is too early to say the American dollar is done for good, I think there is still a good chance of the USA economy to shine again, if the politicians do not mess up with the debt ceiling during this summer, otherwise things can degenerate very quick.
sr. member
Activity: 476
Merit: 283
April 14, 2023, 09:01:17 AM
#24
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.

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.
copper member
Activity: 1316
Merit: 715
Eloncoin.org - Mars, here we come!
April 14, 2023, 06:08:41 AM
#23
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

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.

legendary
Activity: 3752
Merit: 1864
April 14, 2023, 04:23:43 AM
#22
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.

that is why it will not become an international currency. For bitcoin to become such a replacement, someone has to manage it. Well, or there should be a "second pole" currency - for example, Ethereum Smiley
Although this, provided that their movement and emission will be in the hands of one or two countries. Why one or two? Because a truly multipolar world (with 3-4-5+ centers) cannot exist in today's reality. The problem is also that bitcoin, as an "unmanaged" financial instrument, is actually not needed by anyone. as well as its volatility and other "features" are not needed. But CBDC currencies - most likely will replace today's cash-non-cash form of financial relationships.
hero member
Activity: 2968
Merit: 670
www.Crypto.Games: Multiple coins, multiple games
April 13, 2023, 03:28:03 AM
#21
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.
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.
sr. member
Activity: 658
Merit: 275
April 12, 2023, 12:20:24 PM
#20
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.


Almost all countries have and use a different currency and has been trading with other nations before now. I don’t think it would limit the ability of a country to conduct trade internationally like you think. There would not be any limit cause the dollar is still very much backed and still accepted for trade by major economies of the world.
I think being solely dependent on a single thing(currency or oil as a energy source) isn’t a good thing. When change finally comes sweeping in and it would surely come, it would be difficult to switch or adapt to a new alternative.
legendary
Activity: 3752
Merit: 1864
April 12, 2023, 11:39:16 AM
#19
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.

The list of countries, by a strange coincidence, fully corresponds to the BRICS list, plus a few more unfortunate ones Smiley

The currency can act as a reserve only if they are really backed - for example, the Dollar and the Euro - are provided with the most powerful economies, leadership in technology, high incomes, an excellent consumer market, political and military weight. Or be "unique" like the Swiss franc. If the country does not correspond to the one described above, the status of a reserve currency can be made only for a small group of countries, and then only by force or deceit. The second way was chosen by China.
I do not want to offend the Chinese industry - but in most cases the products are not bad, but ... Far from high quality. And as a rule, these are niche products and products.
And as you understand, the current situation with the Chinese economy requires URGENT measures to save it. Due to internal processes, this is almost impossible to do. But in the presence of "dependent" markets - this is easily and quite qualitatively solved.
And let me remind you once again - despite the fact that China in every possible way supports the movement "abandon the dollar", he himself does not refuse it - oriental wisdom and the ability to manipulate not very smart "partners" Smiley
sr. member
Activity: 854
Merit: 262
Eloncoin.org - Mars, here we come!
April 12, 2023, 03:05:14 AM
#18
[.....] Some countries may be concerned about the growing influence of China and its potential use of economic leverage to achieve political goals.
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.
We soon going to opt out from the era of the US dollar which had been given countries unnecessary sanctions if they don't do what they want. US is always proud to call other countries corrupt when they are the major problem why the Russian Ukraine war had not ended. Why would the US sending ammunitions to Ukraine gingering there moral not to negotiate with Russia to end the war.

So many things are happening and we seem not to understand what is going on. When I would not be that happy if the US dollar is dumped by major countries of the world because of the irregular activities of the US to have major control of the world. I am already in free mode to accept whatever happens if the US currency end up not having any values.

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.
We can't even go for the Chinese currency if we are going to have opinion to go for strong and stable currency. We would prefer the Euro to be use than opting for the Chinese yuan.



hero member
Activity: 644
Merit: 592
Leading Crypto Sports Betting & Casino Platform
April 12, 2023, 02:52:51 AM
#17
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.
I expected more from you. How could you say the USD has risen to its status because the US always control the world's economy? They can't do the magic, they rose to the level by actions and inactions. You might have an influence on the world's economy and through your policies cause havoc. I don't know how people like to heat up the polity for no just reason, but thankfully, the world's economists always see it differently and see the US as deserving, which is why I laugh at critics.

Any country can plan their affair and flourish, which is what the US did and is doing and attracts more investors in the economy and their currency, so it's practical.

In other words, the USD is reliable due to the US's wisdom of getting things mostly rightly done, not because they are superpowers or controlling. Other competing countries are free to do the same.
legendary
Activity: 3752
Merit: 1864
April 11, 2023, 01:06:34 PM
#16
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.

But China is not going to compete. China needs a group of "spacers" countries that will ensure its economic stability! And China, as a drug dealer, "puts" these fools on a drug under the name "yuan". And then - these fools become hostages of shackles and handcuffs named Yuan. As you understand, the BRICS countries are now giving away dollars from their reserves to the tune of China, and replacing it with the yuan. At a certain moment, when they will be completely dependent, break ties with the world economy, China will simply tell them - well, now you will only buy my goods and only for my yuan! And these countries will be forced to do it! And how else - there are no dollars, no one needs their local currencies, even China. And "I want to eat," but the only currency is the yuan. The question is, who will they buy from? Smiley

When such a game takes place, one must understand who is the ultimate beneficiary...
hero member
Activity: 1652
Merit: 702
April 11, 2023, 10:44:26 AM
#15
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.
Your statement is more political to respond to, dependence on the dollar depends on how your country builds cooperation with that country, it is a reflection of dependence on the real side and cannot be avoided when international cooperation has been built by your country.

Have read in some news that Russia, China and India are planning to leave the US Dollar in terms of trade between countries and even they are designing payments using a new currency. But is this a solution to get out of trouble because we know that geopolitics always plays a role of interests and I'm afraid this is a new move to dominate. Russia and China are countries that have the same desire to master diplomacy, trade (economics) and technology.
sr. member
Activity: 750
Merit: 258
April 11, 2023, 10:26:47 AM
#14
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
Thanks for spilling the tea on how relying too much on the dollar can be both good and bad. I gotta say, I'm loving how the BRICS are shaking things up. It's about time we diversify our reserves and make ourselves less vulnerable to fluctuations. Plus, who doesn't love new opportunities for trade and growth, amirite?

Personally, I'm feeling the Chinese yuan as a dope alternative reserve currency. China is already killing it in exports, and if they start promoting the yuan, it could be a game-changer for trade and investment. But let's not ignore the fact that China's getting more and more powerful, and that could cause some problems for other countries.

Basically, countries need to do their homework before jumping into the currency game. Sure, there are risks involved, but I think the potential gains are worth checking out.
hero member
Activity: 1974
Merit: 591
Leading Crypto Sports Betting & Casino Platform
April 11, 2023, 09:34:29 AM
#13
[.....] Some countries may be concerned about the growing influence of China and its potential use of economic leverage to achieve political goals.
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.
During Biden leadership, US policy and strength were always considered weak, therefore now the BRICS alliance dared to openly oppose the dollar and what was more interesting was when Trump said in the press that the US dollar would eventually be replaced by the Chinese Yuan. The BRICS coalition is not playing games and indeed already has great strength plus their invitation to the Middle Eastern countries has been very convincing. The weakening US Dollar proves that Biden is too soft to deal with threats in the West.

This will be a challenge for the US to be more aggressive in the economic sector. BRICS is already running well and other Asian countries will also join in, especially since there is an inextricable relationship with trade contracts with China.
legendary
Activity: 2576
Merit: 1860
April 11, 2023, 09:11:46 AM
#12
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.
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.

A common international currency is essentially the spirit behind the Bretton Woods system, the very system that established the US dollar as the world's reserve currency. Precisely, it was proposed by John Maynard Keynes that an international currency be created. He wanted to call it the Bancor. However, it didn't happen, and instead of a new international currency, the USD was assigned the role.

As to the alternative that you mentioned, it simply isn't possible at all, because of how unstable other local currencies and economies are. Who would trade with Venezuela or Zimbabwe, for example? Who would trust their local currencies?

Quote
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.

China's goal certainly isn't only economics. It is power. It is influence. It has hegemonic ambitions.

Yes, of course, developing nations are always at the receiving end of the world's power struggle in which the major players are the most powerful countries. While these poor countries could benefit from this competition, they're also the ones that could easily be made hostage, bullied, and the most to suffer when the economic competition turns into a war.


1. https://www.investopedia.com/articles/forex-currencies/092316/how-us-dollar-became-worlds-reserve-currency.asp
2. https://www.investopedia.com/terms/b/brettonwoodsagreement.asp
full member
Activity: 1092
Merit: 227
April 11, 2023, 08:05:54 AM
#11
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.
legendary
Activity: 3752
Merit: 1864
April 11, 2023, 07:53:25 AM
#10
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


And I'll explain Smiley
You are missing a very important point. You do not notice one very subtle nuance. While some are rejoicing at the supposedly "accomplished punishment of the United States" (though it is not clear why), in fact, a process is taking place that not everyone has realized yet. And when they realize - the way back will be very difficult and thorny.

China, having taken the place of the second superpower (Russia turned out to be a complete fake), decided to gather vassals / servants / raw material appendages around itself, who are very excited about the idea of "destroying the dollar", and in their fantasies it means the USA Smiley
China is smart, it is now simply manipulating less intelligent "guinea pigs", and removes them from dependence on the dollar, which is used by the entire civilized world, and makes them dependent on ... YUAN!
With all this, China itself does not refuse the dollar! He is not an idiot - to lose the opportunity to interact with the world market and the leading economies!
I think that in the wake of the “we will destroy the dollar” hysteria, China will be able to very quickly drive all “friends in the fight against the dollar” into a stall, I think these unfortunate people will lose the dollar in the gold reserves by 2024, and will become complete, obedient slaves of the yuan Smiley
The funny thing is that these unfortunates are pushing themselves to this, deceiving themselves with some stupid fantasies Smiley
hero member
Activity: 686
Merit: 987
Give all before death
April 11, 2023, 04:49:50 AM
#9
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?
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.

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.
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.
legendary
Activity: 2576
Merit: 1860
April 11, 2023, 04:08:30 AM
#8
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 own economic situation.
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