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

International sanctions can and should have a proper impact not only on underdeveloped, but also on economically strong states. The modern development of science and technology has reached such a level that no state can produce absolutely all the goods that it needs. Therefore, almost everyone, who to a greater, who to a lesser extent, depends on the existing division of labor and products.

In addition, not always other ways to solve emerging problems can do without the application of long-term sanctions. An example of this is Russia's current military aggression against Ukraine.

You made a valid point regarding potential  positive side of the sanctions for developing countries. Sanction can serve as motivating factor for these nations to strive towards self-reliance and produce/manufacture all what they have been imparting since years. However, as you said success of such plans of self-reliance completely depends on wisdom and strategic vision of political leadership. Several Asian countries, such as China, India, Malaysia and Bangladesh have demonstrated examples of wise and visionary leadership. These countries have effectively utilized their resource and implemented long term strategies to achieve self-reliance.

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.

The application of cryptography for currency uses might be "new" relatively speaking, fine. But I'm not articulating a country keep its reserve entirely in crypto. They're welcome to diversify with different assets and securities including fiat currencies. A prudent decision would be to have the plurality of the reserves be held in Bitcoin. This solves the volatility issue.

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.

The choice between Gold and Bitcoin as a reserve asset really depends on the tastes and risks of each country, both in terms of investment strategy and perception. In quotes, if they will. Bitcoin also offers potential future benefits where it is uniquely valued as a store of value asset and has other perspectives to consider, BTC also offers cross-border transactions that are faster, cheaper than traditional methods.

I think, this is another way of looking at creating long-term wealth, if they only knew about it.

I believe there are countries that have more than one currency as their federal reserve. Yuan, Pounds, Euros, Dollars are all federal reserve currencies. The dollar is only the most popular in this regard. Diversification isn't the issue here. The issue is if one of these currencies depreciates, it affects the country that is using it as a reserve.
What I find dreadful in all these is, a particular country can suffer from the negligence or bad government, bad monetary and fiscal policies of another country. Like how countries suffered because of the increased inflation rates in the U.S.


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.

They are all the same when it comes to being hostile towards bitcoin, the only difference is in their approach. For example the Chinese government outright banned bitcoin mining while US government restricted the hell out of the miners and even forced them into censoring transactions (like MARA pool).

At the end of the day they want full control and don't want bitcoin to even exist. But they also know they can not stop bitcoin so they try to regain at least some of that control using other means like US forcing everyone to use Coinbase for both trading and storing bitcoin. ie. full 100% control and monitoring.

As history shows, the US economy has been and remains the most stable today. And this is not because the dollar is the world's reserve currency, but simply because the United States is really the strongest and most effective country in many areas - from politics to the army, from the consumer market to technologies that are in demand all over the world.
And only a country that meets a set of criteria will be able to replace the dollar:
1. Recognized as a leader by much of the world
2. Key positions in international politics
3. Strong, self-sufficient economy
4. Key positions in the supply of technologies to the international market
  5. Strong partnerships with major countries (economy/politicum/army/...)

As soon as such a country appears, then the issue of replacing the dollar can be considered. Before such an event, all talk is simple populism to cover up some personal "pocket" interests, but by no means a real solution to the issue of an international reserve currency.

When the dollar's control shows signs of waning, some initiative will be launched to overthrow the domination that has existed. Whether the Chinese yuan will be the new reliable choice or whether the dominance of the dollar will persist over time. Either way, the common ground between the two will still have negative effects when some countries use dependencies for intermediary transactions. This affects the entire economy and politics of a country. So bitcoin is really a solution to the future of mankind when it has independence and is not controlled by any economic power.

It seems like a chicken and egg scenario. You come from the perspective that it is a bad thing, but at the end of the day there will always be a reserve currency in the world and it will ultimately be used in countries where the government has not been stable enough to guide it's own currency well. The American government is far from perfect but it is still far more transparent and flexible than some other countries like China, which leaves you in a situation where you simply accept the best of the worst. The USA will naturally try to protect its reserve currency position as it does benefit from it, but it's fairly benevolent most of the time.

I also think too, but I also understand that over-reliance on the US dollar will not have the same benefits as the @OP suggested to diversify, meaning taking advantage of other currency so that in times when US economy weaken, the country who adopted other currency will not be devastated because they have an alternative reservoir.  Aside from that, the countries capability to transact with other country will be enhanced.  the only problem I see in here is that the agreement between government where the deal might forbid a country to deal with other currency.  It is a business after all so each country wanted to have the deal alone.


I do not think leaders wanted to ruin their money source, so I think they wanted to maintain the country at least and prolong the duration of their benefits. 

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.

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.

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.

The BRICS initiative seems like a joke at this point. Of course, the dollar isn't ideal and can fluctuate, but it's pretty stable, certainly better than many local fiat currencies. More importantly, dollar has a really high liquidity, it can be easily exchanged for other currencies and many other things. Russia accumulated tons of Indian rupees and is now having trouble of what to do with them because the interest in rupees is much lower than in currencies like the USD.
Finally, matters like the reserve currencies you use and loans you take have a political significance. It's a form of being friendly towards certain countries and of sharing their values.

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. 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.

It remains to be seen how this development will impact the US economy and the US dollar in the coming years. Still, countries worldwide are exploring alternatives to the US dollar as their primary reserve currency.


This trend may continue as governments seek to reduce their dependence on the US dollar and explore new economic and trading partnerships with other countries.

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.

Your proposal to address the issue of single currency dominance with diversification combined with decentralization is valid idea and it is widely debated in financial community. While diversification may mitigate impact of currency fluctuation but as economies are interlinked globally it won't solve the problem to some extent but not completely. Whereas decentralization is not linked to a single economy or institution but the challenge remains its widespread adoption , as well as implementation of decentralized currencies also faces challenges of regulation, security and scalability.

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.

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.

The thing is that these "fighters against the dollar" do not quite understand what they are doing. No, I'm not talking about China 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...

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.

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.

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.

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
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.

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.

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.

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

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"

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.

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.

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.

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?

When such a game takes place, one must understand who is the ultimate beneficiary...

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.

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.

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.

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?


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.

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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

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.

And I'll explain
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
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
The funny thing is that these unfortunates are pushing themselves to this, deceiving themselves with some stupid fantasies

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.

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 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.

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