Topic: USD will lose its status of being reserve currency? I am scared. (Read 416 times)

I'd say otherwise.

Because of the USD, the US can get any service or asset for free from the other countries.

USA needs oil? Just print USD and give it to the Saudis. Need cars? Print and give it to the Germans. Need gold? The Chinese will work for the Dollars.

The trick with the USD is, everybody wants it. Even the most hardcore bitcoiners. (Maybe not all of them but most of them yes)

When people loan you money, they want to be repaid in USD. Not in gold, not in Btc. That's how strong the USD is.

Every country will have multiple reserve currencies as part of their foreign exchange reserves but for a country to consider bitcoin as a reserve currency is a big ask unless a major country is going to accept major investment and transactions in bitcoin which is highly unlikely in the next decade.

---

@ OP many responded and yet i did not see your next in the line for the reserve that is going to be accepted globally, i do no see any currency replacing USD, but i would like to know yours .

This is not the first time I see this piece posted here


If I'm not mistaken, Britain went off the gold standard during WWI

As you say further in your post, the seemingly best date to set the clock at is Bretton Woods, i.e. 1944, when the domination of the dollar had started off officially. But ultimately it is irrelevant. The dollar will remain a world reserve currency as long as America remains the dominating world power in terms of political, economic and military prowess. In this fashion, its supremacy could last 10 years from now on, and it could last another 100 years. The dollar will stick around for as long

No country use only USD in its reserve portfolio I believe. In Indonesia for example, we hold USD along with a basket of various strong currencies, securities, and precious metals. Anyway, Bitcoin may be able to get into crypto asset basket in the future if it keeps performing well and the market mature.

Why are you scared of holding the USD? Because of the coronavirus outbreak? The U.S is not the only country affected, almost every country in the world was affected by the pandemic and all the countries of the currencies on your list are all affected by the pandemic. And moreover the USD is still doing better than most currencies you will find these days, unless you are planning to go for the Chinese Yuan?

It is up to you to choose what you like. As for Bitcoin, it has nothing to do with them, it is completely different and no matter what happens it's going to keep growing and won't fail. Right now bitcoin is recovering from the panic sell happened due to corona outbreak and that too a complete recover within less than 50 days. Moreover, this recovery has become possible might be because of upcoming bitcoin halving.

We are in a new age of technological advancement. This age is very much different from the time the Great Britain, Portugal, Roman currency dominated the world, this age has to do with military and technological invention and advancement. The USA will still be around for more years and her USD will still stay dominance. Except we are expecting cryptocurrency to take over.

The biggest economic power does not really mean the biggest population, if you would have said Euro that can be a good candidate as a reverse currency then it would be logical as Euro is the second currency in terms of volume held as reserves globally, i am certain that Chinese Yuan will not be considered as a major reserve currency anytime soon atleast the next 100 years and i am not even sure where Indian rupee stands in all these talks on becoming a reserve currency  .

As for the OP, globally the economy is in crisis and i am amazed that you did not see the economic trend globally where government are stockpiling USD which is evident by the forex changes in the past few weeks and the main reason is to cut the interest rates for the loans they have in dollars from the world bank and China and India are the biggest borrowers from world bank.

I understand that we are concerned about the current situation and the problems that the economy will suffer worldwide.
We must remain calm and do our best.
I am more concerned with the public health problem than with the economy itself. Because I maintain the faith that when we begin to resume the economy we can recover all this lost time and its consequences.

If you're afraid that the US dollar will fail as a reserve currency, then there are still other currencies that you can use as reserve in place of the US dollar, though I don't think the USD will fall. As of 2019 the top coins in the world that were used as reserve were the US dollar, Euro, Japanese Yen, Pound Sterling, and the Chinese Yuan.

I am suggesting that you make your choice from any of these top four currencies apart from the USD. The Euro can be a good choice, but if you don't want any of these, then it's best that you continue with the USD.

What do you mean? Each currency can't hold the world reserve status for more than 110 years, that's why USD may loose its status soon?

Doubt that but I'm always prepared for this kind of thing. I've been reserving some portion of my money in USD considering that the economy of my own country is relatively fragile. People keep saying that China will be the next USA but I too doubtful of that considering how they got a really bad reputation lately. Rather than worrying this kind of thing I'd just prefer to diversify my wealth.

You are scared of the US dollar losing it's "reserve currency" status?Are you a Bitcoin supporter or a USD supporter?
If you ask me,the status of the US dollar as a reserve currency does more harm than good to America.
The Federal reserve system just prints dollars and sells them to the rest of the world,the government debt and the budget deficit of USA are so insanely big because of the USD reserve currency status.
If USD is no longer a reserve currency,the global debt bubble might not get so pumped and there's a chance
for us to avoid the financial Armageddon.

It is a great comparison to see the charts how long each country dominated the world because of their military strength and thereby control the global economy but the current situation is far bigger than the US dollar, all the countries are affected by the situation and the economic slowdown was evident well before the virus takeover and that it was not limited to the US but it was affected globally.
Even if we accept that USD will loose its stature, which currency will be taking over, right now there is none, i am not expecting China to take over now  nor the Euro and as long as there is no viable competitor USD will hold its stature.

It will certainly affect bitcoin even though the halving event is about to take place. because I don't believe in the deflation and huge demand of the bitcoin crowd. The majority of sharks are bitcoin miners and they hold the right to manipulate the market. Therefore, when people are in recession, they do not want to use their money to invest financially. All businesses are growing very slowly, most will invest in companies producing and service goods. So if a major recession or economic crisis takes place, we should keep cash and only invest in real businesses in manufacturing services. say no to bitcoin, because then the crypto market will no longer grow.

Yup, what's going to replace it? The Euro is in even worse shape. The Yuan? Nobody trusts China's closed economy and unpredictable monetary policy, and foreigners won't buy into the Chinese bond market.

That's why there isn't much point speculating. If the US government defaults for good, I think we'll see a return to commodity-pegged currencies and currencies tied to baskets of central bank held reserves. The US's economic and military size would still be factors, but so will central bank reserves like gold. That's why Russia and China have been building up their gold reserves so much in recent years.

If USD to lose its main reserve currency status then there must be a better candidate to replace it. I don't see anything which can replace USD at the moment.

People still calculate something's value in USD. People still borrow and lend USD everywhere in the world. Even when they buy gold, it is still the USD what they want. They are not trying to get more gold but USD.

You buy a boat, the price tag isn't in gold or crypto. It is USD.

Sorry, I don't see USD going away anytime soon.

I wonder how much of the world would be sad if the USD lost its dominance. Probably not all that much of it. It's hard for many a country to point to the benefits of US supremacy. Whether anyone or anything else would be any better is a question waiting to be answered but the US feels like a regime mired in decay.

No matter what will happen in upcoming years, this is a fact. Soon USD will not be a world reserve currency anymore. But question is what will it be. Normally it should be a currency of a country that is biggest economic power. So first Chinese yuan and latter Indian rupee. But big question is what Bitcoin will say about that.

First, Nineveh was the capital of the Assyrian empire, second Tokugawa was not an empire and it was actually replaced by the Japanese Empire, so next time pay more attention.

Third, look at the last examples you're giving to make your claim.
So, if you're that concerned about the evil doings of capitalism, why are you a fan of bitcoin when bitcoin is pure capitalism?  

What depreciation?  

History has proven, the glory of a nation was twisted between East and West, starting with the Qibti (East), the Greeks (West), the Farsi (East), the Romans (West), then the Arabs (East), and now America ( West) which is declining its influence day by day. If this east-west arrangement is followed, the turn of the nation that will rule the world now is the nation from the East. Whether it's China or Islamic power from Southeast Asia.

All empires eventually collapsed: Akkad, Sumer, Babylon, Nineveh, Assyria, Persia, Macedonia, Greece, Carthage, Rome, Mali, Songhai, Mongols, Tokugawa, Gupta, Khmer, Habsburg, Inca, Aztec, Spanish, Dutch, Ottoman, Austria, France, Britain, the Soviet Union.

Most of them collapsed in a matter of one to two hundred years. An empire is like a state system which inevitably makes the same mistakes only by the structural nature of their imperialism. They fail because of size, complexity, regional reach, stratification, heterogeneity, dominance, hierarchy, and inequality. Not yet one American decade emerged as the strength of the American empire showing its collapse.

Like a system, empires also experience a life cycle. Starting from the seed, until the fall or death. Johan Galtung in "On the Coming Decline and Fall of the US Empire" explains the United States is experiencing an aging phase, with an abundance of control tasks.

Unfair exchange patterns of the four dimensions of power (economic, political, military, and cultural): have caused resistance that cannot be restrained anymore. Through complications from various contradictions that are followed by demoralization experienced by the elite empire. So far, America has utilized economic power manifested by the international capitalist system, military power with international militarism, political power with international hegemony, and cultural power with international missionaries.

Hypercapitalism destroys nature, military intervention breeds resistance, hegemony ignites the longing for autonomy and sovereignty, while missionary with exceptionalism stimulates the rise of old identities or the emergence of new identities. So, this is where the American empire has decreased.

When domestic and global financial market turnover is high, while real economic growth is slow and distribution is low, there will be a high accumulation of liquidity trying to find outlets. An outlet on financial economics is speculation.
Outlet responded by creating a virtual company that made financial economic growth quickly lose synchronization with productive economic growth. The depreciation of the dollar is one indication of this chronic disease. The remedy for the disease is the distribution of a system that has been blocked by the US empire, through the World Bank, the IMF, and the WTO. The absence of drugs will result in an increase in the value of financial products and eventually lead to new crashes.

http://www.ncveteransforpeace.org/issues/Empire_Falling.pdf