Topic: Effects: Over-reliance on the US dollar - page 3. (Read 494 times)

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?

For the world to have relied on the USD for this long means that it's reliable. But no currency would have its uptime without downtime, yet the greenback has done its job quite well amidst all that. And from my experience of FX trading of almost two decades, there is no currency that is as stable as the USD. China, Russia and others are only rebelling as they are jealous of the US and the USD's power and dominance in the global stance.

I dare them to press further if their investors will not cut their huge losses over years.

I'm not totally convinced that putting more stock in the yuan and other currencies is the best solution to our reliance on the dollar. Yes, sticking with the dollar can restrict a country's ability to trade internationally with other countries that use various currencies. Do we really need to diversify?

Not so fast, there are risks associated with China's BRICS expansion that must not be ignored. Rising Chinese economic and geopolitical influence may inflame international tensions and even lead to war. Who knows what economic conditions China might impose on countries that adopt the yuan?

Scepticism and critical analysis are two of my favourite things. When it comes to the global economy, it's crucial that we weigh the benefits and drawbacks of every potential action. Rather than relying on many currencies, perhaps we should create ways to do so. Although we can't know what is ahead, we can always count on the benefits of being cautious and sceptical

I don’t see many of these countries moving towards the yuan currency because they feel that dollar is actually facing problems, that will be giving another currency a central power like the one the dollars has now. What this countries are political after is to cut the power of the dollar and look for means to trade internationally in many currencies to avoid a single currency crisis. That is why countries like Saudi are looking at the possibility of accepting other currencies for their oil trade and not just the dollar.

It is not even dollar alone that is facing the much depreciation almost every currency is having a bad period and that is Also why we have seen countries have shifted from holding their reserves in fiats and have moved towards assets like the Gold for reservations

In my opinion, the weakening of the role of the US dollar as a world reserve currency is connected with global world events. 

Currently, there is a slowdown in the growth of the world population.  Until 1976, the human population grew exponentially.  However, after 1976, the population growth of planet Earth began to slowly slow down.  Currently, we are already seeing negative population growth in many countries of the world, only some countries in Africa and the Arab world are maintaining population growth. 

Very soon the number of people on our planet will stop growing.  This has global consequences, since capitalism, as a social system, is based on a constant increase in the number of people (potential consumers of goods, works and services). 

In addition, uniform (very high) consumption standards were established almost throughout the planet Earth.  These standards are based on the consumption of the most developed countries on Earth (USA, European Union, Australia, etc.).  At the same time, the resources of the planet are not able to provide such standards of consumption for 8-10 billion of the world's population.

As a result, an irresolvable contradiction arose.  Capitalism, as a social system, is no longer able to fulfill the dream of 8 billion people for a better life.  Accordingly, the United States, as the leader of the Western capitalist world, is losing its former leading role.  And many countries are seeking to distance themselves from the US dollar and try to solve their economic problems on their own.

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.

OP, it's not overreliance on the dollar that's making its value decline; the value is declining with respect to the inflation shift, which is a result of the high volume of the dollar that's being printed.

The volume of dollars that are in circulation is really greater than their demand, and if those dollars are retracted, they will add more value to dollar and not have to greatly affect the economic.

Inflation increased by 9.1% last year, and it was said that that's the biggest increase in over 40 years. What really contribute to these inflation is because the money supply has increased by about 7.7% per year since 2008, and the cause of this is still the higher growth of bank reserves and the money that is controlled by the Federal Reserve.

At this point in time, the current cause of the devaluation and inflation is because the money in circulation has grown faster than the goods produced in the economy. The citizens of countries that use the dollar cannot use any other country's bank note in their country, so what other currency can they utilize to purchase things and also do other things if not dollar?


The problem here is the high volume of dollars that are printed every year, and if the money is retained,dollar purchasing power will strengthen and cause deflation on the price of things as well. If the federal government so desires, it can exert control over the process.

Bitcoin is the solution. OP, you can still read these threads to get more insight into what I have said.

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