China's Threat to The U.S. Dollar Is Way Overblown

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SOURCES:
I've linked my sources in the blog that goes along with this video. Most links are in the text. But, I added some extra literature and data sources to the end of the blog: www.moneymacro.rocks/blog
Timestamps:
0:00 - introduction
1:07 - motive
3:46 - sponsor
5:10 - the plan
6:12 - spendability
9:50 - investability
13:49 - liquidity
17:22 - concerns
Attribution:
- Paris 1962 images from glamourdaze on YT
Neon sign from: www.neonlights.be/discount/M&M15
Narrated and produced by Dr. Joeri Schasfoort
Research assistance: Oskar Matthey
Animations by: Hugo Bezombes
Made possible by feedback from: Carlo Humpert & Joram Kok

[@MoneyMacro]

To learn more than ever from important non-fiction books, join me on Shortform: shortform.com/moneymacro. You’ll get a 5-day free trial and a discounted annual subscription. One of my favorite books on Shortform is Capital in the Twenty-First Century.

[@didyoumissedmegobareatersk2204]

1 2 3 less goo NED/CIA Fed bot Wumao enjoying this Indian Crying ans still superpower ny 2020

[@bezpitt]

XXz

[@bezpitt]

Zxcc

[@bezpitt]

Vx

[@sbkarajan]

A Fun example. The sales of luxury cars in 2021: Benz: 758,863 sold in China, 276,102 in the US BMW: 846,237 sold in China, 336,644 in the US Audi: 701,289 sold in China, 196,038 in the US Porsche: 95,671 sold in China, 70,025 in the US EV: 2.8 million in China, 0.4 million in the US Chinese GDP cannot be lower than the little nation called US. China has the biggest economy in the world already.

[@miketheneanderthal9490]

I think any country with significant capital controls will have a difficult time becoming a reserve currency

[@talltroll7092]

Yes. If it's not freely convertible at any arbitrarily large scale, why would anyone want to use it as a reserve? The whole point of a reserve currency is that it's a place to dump any assets not better employed elsewhere, until you spot an opportunity

[@revanthvejju732]

chia wants reserve currency, it will open up its cap controls in 2040-2050

[@longhornz30]

@@revanthvejju732 other component is financial transparency in its economy ... and transparency and independent oversight is something the CCP is incapable of when it controls all levels of the government

[@harshavandu]

@@longhornz30 financial transparency 😮😅 do you think anyone understands the mumbo jumbo going on in the Federal Reserve ? And still the US dollar keeps its reserve currency status. But don’t worry, the time is up 😊🎉

[@bobmorane4926]

You're wrong !!! Sean Foo explains how the yuan will co exist with the dollar for a while but not to supplant it but to defang it maybe. China's end goal isn't to achieve world currency status but to protect itself from dollar weaponization and thus its short term goal is dedolarization and possibly dividing the world into 2 camps. The Dollar-Yuan Currency War: Everyone’s Getting This Wrong. kzbin.info/www/bejne/aX20enaOppuof7M

[@whcolours9995]

China doesn't want the end of the dollar system; becoming a new reserve currency, even challenging it would devastate its trade position.

[@axelnils]

They won’t need the trade for much longer though…

[@didyoumissedmegobareatersk2204]

China does lol It won't create its new currency but would surely Create new Thing for Alternative

[@br8745]

@Axel They will. They are major importers of both Food and Energy.

[@hanghung-sp1fc]

Nobody wants to trade. Its just an abstraction. Chinaman take all you lose yankee.

[@PutXi_Whipped]

How do you figure that? The reserve currency status improves its trade position.

[@lilytea3]

0:05: 🌍 China's plan to end the dominance of the US dollar as the global reserve currency threatens the US' advantages in their global rivalry. 3:32: 💰 China's plan to end the dominance of the US dollar involves making the renminbi more attractive for international trade and investment. 7:08: 💰 The Chinese renminbi may become more spendable internationally if China's plan to settle oil and gas trades in renminbi is successful. 9:58: 📈 The accessibility and depth of the US financial markets make the US dollar more attractive for savings and investment compared to the Chinese renminbi. 14:10: 🌍 The liquidity of a currency is important for its attractiveness, and the US dollar scores high in this category with a 9 out of 10. On the other hand, China relies on borrowing to obtain foreign currency, which is a risky strategy. 16:53: 📈 China's plan to challenge the US dollar as a global reserve currency is still a long way off, but it is making progress. Recap by Tammy AI

[@ambition112]

Thanks for saving my time! lovely time stamps! Tammy AI where you get it?

[@cottagegymfun]

Asked by: nobody but the US 😂

[@ddicin7759]

Demographic factors enter into this too. An ever smaller young people cohort in China will make a consumption driven economy harder to achieve. I'm glad you mentioned the liquidity angle because that's why I think this displacement theory will fall down. People outside china need their currency and would really rather get it not from borrowing but from exports of goods/services to China. People don't like to borrow.

[@thesaltbaron2237]

I don’t agree. Young people consume, but also produce. Old people only consume.

[@lip124]

Majority of Chinese people rather have there money in US then in china.

[@tombee9785]

@@thesaltbaron2237 young people consume far more than old people though

[@thesaltbaron2237]

@@tombee9785 young people produce more than they consume, otherwise they wouldn’t leave any profit for their employer. Only the net of production- consumption matters.

[@tombee9785]

@@thesaltbaron2237 I never stated otherwise, but factoring in the declining and rapidly aging Chinese population means that the traditional model they work under won’t work in future

[@josephmassaro]

You had me on Ray Dalio being an economic analyst.

[@krissp8712]

I was about to say, after the last time Joeri dismissed Dalio's claims I was thinking "Oh, so only 1 analyst will have new arguments then"

[@LiamNI]

You didn't mention much about the tight currency control China wields over the RMB, or the manipulation of the value of RMB. Until the RMB is a free-floating currency, and foreigners have easy access to capital markets, the RMB won't even overtake the Swiss Franc as a usable currency, nevermind the other basket currencies such as the EUR, GBP or JPY.

[@MrRepublican5]

Agreed this was a miss - markets hate unpredictability

[@anjaseidl4003]

Dear Liam, it is not Swiss "Franc", but Schweizer Franken. Best regards.

[@mylex817]

@@anjaseidl4003 Dear Anja, since this is an English comment section, "swiss franc" is actually the correct terminology. It is even used in the English version of the website of the swiss national bank.

[@LiamNI]

@@anjaseidl4003 look at us speaking English, not French, German, Italian or even Romansh. If you go to the largest currency exchange in the world (still London if my memory serves correctly), it's a Swiss Franc...

[@anjaseidl4003]

@@mylex817 correct. I am so used the the term "Franken"

[@dathes]

A detailed video on international bank transfers would be interesting if it includes regulation around anti-money laundering/-terrorism and currency controls, together with overview of bank transfers such as ACH, Swift and others.

[@darrylbunch6929]

Currency control ? PTL ! American bankers lead the world in honesty. In God we trust ! Everyone else gets economic sanctions.(which are designed to do what) ?

[@bobmorane4926]

I do wonder how Murica gets around its own anti money laundering rules when financing terrorist groups around the world such as Isis or Al Queda among others.

[@purushottamsapkota7696]

I owe big part of my economics learning to you, Jourie. Your videos inspires me to be a central banker. Hopefully it’s there

[@mandarinandthetenrings2201]

This not economics. This "fake economics". You can't take a gun and force countries to use your currency. And another thing China doesn't allow countries to use their currency so it really, just more CCP Propaganda.

[@purushottamsapkota7696]

@@mandarinandthetenrings2201 Whatever you patriot. I was thanking Jourie and just that. World doesn’t need your American gospels

[@mandarinandthetenrings2201]

@@purushottamsapkota7696 LOL 🤣 I like you Indian you make me laugh. What gospel Indian for most part we "IGNORE YOU"! When we invented the Iphone were was Indai? It several years before your government would even allow Iphone into the country. They only did it because Indians were getting rich smuggling Iphone into the country.

[@mandarinandthetenrings2201]

@@purushottamsapkota7696 When we invented America had "Internet" most Indians didn't even know how to use a "Fax Machine". LOL hahahahahahaha 🤣

[@mandarinandthetenrings2201]

@@purushottamsapkota7696 The Indian economy is "teeny tiny" it smaller than US State of California.

[@aluminiumsandworm]

I think talking about how the us dollar got to the point of world reserve currency would be helpful to the video. Part of understanding what it would take to replace a universal currency like the usd is understanding how it became such a currency in the first place. Overall, I liked the video a lot, but it just felt incomplete without some mention of the Bretton-Woods system.

[@ibiedun156]

Very good suggestion.

[@Jacob-W-5570]

marshall plan, the loaned alot of money and equipment out after ww2, and thereby gained an edge on battle tired europe.

[@devilex121]

Yeah I'm a bit disappointed he didn't go into what the USD (as a global reserve currency) actually means for Americans first. Spoiler: China has no reason at all to making the yuan a global reserve currency. They're a net exporter and they very very much rely on the status quo of being able to export their surplus savings into net importers like most western economies. It's all just bluff.

[@dzcav3]

The Bretton Woods agreement was pushed on the world by the US in July 1944. The entire industrialized world, outside of the US, was pretty much a smoking pile of rubble due to the war. The US had more than half of the entire planet's GDP and naval power. The US offered, to all non-hostile nations, access to its market, and guaranty safe travel for their maritime commerce using its naval might. In return, the dollar became the world's reserve currency.

[@Homer-OJ-Simpson]

So you're saying the only way for the Chines currency to become the top currency is for most of the world's powerful economies to come together and agree on using the RMB as the global currency?

[@adriansaw8329]

Opening up their capital accounts will result in net outflows of wealth by natives in PRC. Replacing USD will also mean RMB has to be exported which means trade deficits and manufacturing going to other countries. So...

[@izajahmed8863]

Countries around the world have started to accept trade in other currencies..for example, Brazil-Argentina working on new currency for latin America outside of USD and BRICS nation too..Saudi said they are not bound to accept USD for oil payments and considering RMB from china for its oil. This war exposed the west completely and countries lost the trust in USD. So, work is already underway and accelerated more and more

[@talltroll7092]

@@izajahmed8863 Yeah, no. All of the non-USD trade agreements are window dressing, without exception. Very symbolic and all, but the volumes involved are just tiny compared to the USD denominated market. Now, that doesn't mean that the USD will remain dominant forever, but it will take vastly more volume in non-USD markets to genuinely threaten the USD as the global reserve

[@fedorbutochnikow5312]

@@izajahmed8863 wishful thinking. have you lived in latin america to understand how their trade works? developing nations trade more in us dollar than within their own economic unions, the demand for dollar has never been stronger for its stability and liquidity. to challenge dollar's dominance, china would first have to liberalize its capital market and effectively crush their economy, and where do you think all that wealth would go? that's right, it would flee like water to western banks, holdings and assets. china is held hostage by the very monetary system they oppose, their only hope is to sway enough economic partners to somehow rebalance the power of sanctions, they are afraid to death of any sanctions against them and constantly searching for loopholes, the rest of the currency rise is nothing but hot air. the dollar is here to stay for a very long time.

[@ainz1325]

@@izajahmed8863 time to wake up from ur dreams thats not how it works my friend from the middle east lol

[@user-cg2tw8pw7j]

​@@ainz1325 bandanas what does the clown

[@AnexoRialto]

The US dollar's reserve currency status means ALL international payments must go through the USA. I am in Spain and want to pay for something in Mexico in dollars. That payment has to go through, and therefore is controlled by, the NY Federal Reserve. That's what counties like Russia, China, or Iran would like to circumvent because of current or possible future sanctions.

[@glynnec2008]

Besides Russia, Iran, and Venezuela another group that hates the USD stranglehold on international payments are the drug cartels. The USA must be doing something right if these are the kinds of groups complaining about the dollar's dominance.

[@niburu1508]

Because of the parasitic nature of the system you mean.

[@hoekoktong9099]

Trying sell my last pc $50 but money changer decline !!! Looks like everybody unloading all their $ holding universally 😄

[@carmenortiz5294]

Who control the money, controls the planet. I bet most of the planet is sick and tired of being controlled.

[@minus21334]

The dollar is not backed by oil, but by the 30++ trillions purchasing power of China.

[@quedtion_marks_kirby_modding]

As you mention at the end, this plan will realisticly just work as a way to create a trade bloc between santioned countries.

[@glynnec2008]

For the despotic countries in such a trade bloc I am reminded of the old Groucho Marx joke: "I would want to belong to any club that would have me as a member"

[@NeostormXLMAX]

@@glynnec2008 lmao keep pretending that the us isn't ruled by elites who rig elections and "lobby" for interests

[@fejfo6559]

It would be interesting to see the EUR rated on the same scale

[@rubentarne641]

Great video, Joeri! I like that you mention the trade balances. I had not really thought about the trade deficit as improving the USD stance in the currency hierarchy, but it makes a lot of sense. I also found your way of taking your knowledge-exporting business as example made it very easy to follow (as these cross-currency trades can become very hard to follow pretty quick).

[@rubentarne641]

but enough procrastinating, the last paper does not write itself ;)

[@emir-re9po]

Can you explain a little more

[@Unboxingyy]

@@emir-re9po whole east asia is on troubles bro economically they are crash on next 5 year

[@inuwooddog3027]

I would like to bring these points to the table: 1) The whole picture: While we are having a tunnel vision on China, this "De-Dolarisation" is not an isolated case exclusively by China. Latin America, Middle East, Africa, Asia are doing the same thing in different names and currencies. 2) The motivation: The Chinese currency could be the worst currency on the planet, but that not the point. It is literally De-Dolarisation This is not about the Chinese Yuan. President Joe Biden used the "financial nuclear bomb" on Russia, and that really freaked the rest of the world out. Traditionally, we would diversify into Euro, Pound and Yen. But these currencies proved to be worthless since their countries subserviently followed the US sanctions, seizing client's assets and gold. We might as well just hold US Dollar. This such situation, diversfy your currency reserve to US's rivals make perfect sense. Neither side can sanction us. 3) Technology: This is happening regardless of China. The technologies are growing, making alternative currencies and monetary system more and more viable. Change is constant. The idea of the US can keep doing exactly the same thing and get the same rewards forever is absurd. This single global reserve currency paradigm is gone. 4) China is just a developing country, and for valid reasons. Huge economy doesn't mean developed economy. It is unstable and lack of many facilities. 5) It's not really De-Dolarisation. Just diversification. Dollar will still dominate, just not dominate enough to use that "financial nuclear bomb" again.

[@ihmpall]

What countries in Asia are running to adopt Chinese currency again ?

[@inuwooddog3027]

@@ihmpall ASEAN has been using it for quite some time now.

[@dingyipu9372]

In fact, the core of this matter is the issue of global wealth distribution. The earth does not lack resources, nor does it lack hard-working and smart people, but the vast majority of countries and regions still live in poverty under the US dollar-dominated global wealth distribution system. This fact may also be the truest evaluation of Western-dominated values. This fact creates the need for a multi-polar monetary system.

[@dingyipu9372]

On a deeper level, this is also a root cause of the world's disease after the disintegration of the Soviet Union. It is also a problem that cannot be solved by Western-dominated values. The breakdown of a system often starts from within. Eastern values ​​cannot bridge this contradiction. This is a problem that can only be solved with the mutual assistance of people all over the world, and it cannot be solved by a wealthy country with a strong military force. But from a positive perspective, it is precisely because of these problems that the world can move forward.

[@pineapplesareyummy6352]

@@ihmpall Everyone. Have you been reading the News? Even India conducts some of its Russian trade using Yuan now. Countries friendlier to China's interests - including Iran, Saudi Arabia, UAE, Malaysia are all using Yuan to trade with China for at a least a portion, if not a majority of their trade now. The process will take time. The global de-dollarisation emergency was imposed by the US. The rest of the world has no choice.

[@wk9378]

The rest of the world is ok with the USD being the reserve currency, the speed to de-dollarise is more related to the realisation that your money can very easily be stolen by the USD system. Its all about risk management. This is the biggest elephant in the room.

[@user-cg2tw8pw7j]

America, the dollar has unfortunately become C because of a demented old man who cannot differentiate between Iran and Ukraine. This is strange

[@GeopoliticalEconomyReport]

This is a good video on an important topic, however it misses the main point: China is not trying to replace dollar hegemony with yuan hegemony; China is trying to establish a multipolar financial order, one in which numerous currencies are used, not just the dollar and renminbi but also Russian ruble, Indian rupee, etc. This is why the BRICS bloc is developing a new global reserve currency that will be based on a basket of the currencies of its member states. So comparing the dollar and renminbi based on spendability, etc. is a bit misleading. Beijing is not trying to replicate Washington's strategy; it's doing something completely different. This is the same point Zoltan Pozsar has made. China doesn't want the renminbi to be the main global reserve currency; it will be one of several.

[@Bluz1]

Excellent point, your comment needs to be higher up. Russia and China are offering the rest of the world multipolarity where the newly formed blocks (Arab world, South America, East Asia, etc) will have more sovereignty. They want multiple reserve currencies, not one. Because we've seen that when there's one dominant force, the rest of the world must obey and do as they are being told. Otherwise you get sanctioned, have your assets frozen and stolen, or worst case scenario, your country gets invaded. The trust in the current system is gone which is why so many countries are shifting towards BRICS who first and foremost offer sovereignty.

[@billedifier8584]

Yes, because the CCP wants to maintain absolute control of every aspect of life inside China. They don't want openness and transparency, that's why they are moving towards the establishment of a basket of BRICS currencies.

[@osiris2u]

Exactly! China is just trying to promote a global financial market that's not dominated and controlled by the US$ and free the Global Rest from being threatened by the US through its weaponisation of the Dollar and the current Swift System.

[@neurologicalworms]

How will this look when rolled our? Any thoughts? You definitely seem very knowledgeable.

[@felipevlllll]

He is being honest, who would actually save or invest in less stable currencies if they can invest in renminbi or dollars. It's not as probable. Now a common denominator, like a brics euro, would have a better fighting chance. But that would take an inmense will of political effort and i don't think there is one in a lot of this countries, or that it is not a sure thing. But still sounds nice. You can literally call it Brics.

[@faisalhadi511]

A good explanation as always. Good job man 👍

[@pchaneyo]

Thank you for the vidéo. But china does not intend to replace dollar by yuan. Brics countries want at first diminish use of dollar by using local currencies for bilatéral and régional exchanges. And then create a New international currency to replace dollar for savings.

[@pchaneyo]

@@akeshshi9137 No, it will be a basket of the national currencies of the BRICS following a proposal emitted by Keynes on 1945

[@josephfisher426]

@@pchaneyo Which sounds scammy and not in the interest of many of the residents of the transparency-challenged BRICS countries, let alone anyone outside them. A basket of just the Euro and dollar would be subject to constant attempts at manipulation.

[@dostavki]

Great stuff, Joeri - as usual. I would like to have one more currency in your ranking table - the Euro

[@CompassionOverHate]

I can’t see it happening. I think these currencies could be seen as alliance currencies. China can leverage their currency because they’ve devised an alliance that is in complete opposition to NATO. By comparison, Europe and the USA are both part of NATO. The Americans likely wouldn’t be too pleased if the Euro became another global currency because it would weaken their USD currency. It’s the same reason the Russian Ruble won’t likely become a secondary currency. China would subdue it because it would weaken their own currency within their alliance. Besides, you only need a single global currency as part of an alliance. The only way I could see the Euro becoming it’s own global currency would be if Europe broke off from the USA alliance-wise.

[@thato596]

euro will never dominate. america will never allow europe to threaten their currency, seens europe is lap dog of america

[@niburu1508]

That would involve mentioning the exchange rate which nullifies this crap

[@tobiasL1991]

Damn another great video! Very well done and well explained!

[@bigwildcat2020]

Keep up the good works guys, we need this message in DC

[@PraveenJose18551]

I don't see how China would allow even a fraction of the financial openness to replace the dollar, foreign investment can wipe out its trade surplus by jacking investment. Becoming a reserve currency is opening up a country to de-industrialization, there is no way China is willing to take this trade off.

[@longhornz30]

Yes, thank you! Almost everyone seems to ignore the major component of transparency! CCP is incapable of transparency especially when it controls all levers of the government. CCP truly "opening up" would mean relinquishing power which is exactly the opposite of what it wants.

[@_morgoth_]

They are going to de-industrialize one way or another in the coming decades. Be it going to war with Taiwan and being cut off from all oil and food imports, or demographic collapse, or their manufacturing power evaporating as everyone decouples from manufacturing in China. There is no good outcome for Chinas future.

[@kyunhwoarang]

You are adding facts that is not logical. "Becoming reserve currency opening up to de-industrilization"?, always think of a spigot. It is to control access and price. The whole global south is pursuing development and you only hear promises. Thats why everyone was sleeping in dollar. To those the opposite of dollar is a rude wake up call, they knew dollar has been weaponised to kill and hence they sufferred. If it's driven by profit then you could observe the effect directly on the population. Capitalist economy has limit, even though they arent willing to admit it. This channel admit that people is planning leaving the dollar because US is seizing even a sovereign state wealth reserve. But he is diverting people away from the solution so people could continue to sleep with dollar pillow. The BRICS is proposing international currency minus all the bad US attitude. All that sanctimonious legislator will only be left to sanction themselves it almost comical.

[@PraveenJose18551]

@@kyunhwoarang You significantly overestimate your knowledge about this subject. The reason the dollar is a reserve currency is because the US markets give excess liquidity for global savings to go toward, if you create Yuan as the reserve currency then global savings will go to the Chinese market and SIGNFICANTLY overvalue the yen and destroy China's trade surplus. By definition, a country with a reserve currency needs to run capital surpluses and that requires a corresponding large current account deficit, i.e. trade deficit, de-industrialization to work. While China's economy slowed down in mid to late 2022, Chinese trade surpluses exploded, while Yen devalued + dollar surged and US trade deficit surged. This is the mechanism that causes this. This is why the dollar starts increasing in value as the world economy tightens, because capital floods toward the US economy. BRICS is going to replace the dollar how? Whose is going to absorb the excess capital from global savings glut? China's not going to voluntarily de-industrialize, Russia, Brazil, and South Africa don't have a fraction of the assets markets to stabilize global cycles. Do you think India is going to do it? You'd be delusional if you think India is going to be buddy buddies with China while constantly fighting a low level war in the Himalayas regularly.

[@kyunhwoarang]

@@PraveenJose18551 It is not about me overestimate but you have a single dimensional take on the matter. Deindustrilization is and must be done with intent. There are other factors as well but trade deficit is cause by the disparity of trade volume which a state didnt have the industry for. Can you export rice when you cant grow them? Same for other goods and commodity. In my understanding, nations dont want trade deficit because it causes cash outflow. That will generate debt and or loss of revenue. China is heavily industrialized while US deindustrialized. Hence trade deficit because US can only be an importer from china of things they didnt have. Do hear what the president trump say of that trade deficit? They told China to buy more from them. Nations can print all the money they want but that will cause inflation which can destroy their domestic economy. Even worse it can stop the ability to import as there is no reserve because of dealing with inflation itself, unrest and everything else. So the bank increase central rate by means taxing everyone to reduce the amount of money to cause deflation. Look at russia, they are heavily sanctioned. Their reserve were frozen and stolen. They are still alive and kicking. When the sanction start, it caused heavy outflow and ruble started to crash! What the central bank did? Increase federal rate. And limit the movement of ruble from going outside of russia and domestic withdrawal was also limited in 10k. And then they only accepted ruble for gas and the rest of it is history. BRCS has a lot of element that reduces trade deficit. South africa need development, security, financial and technology. Russia and china have that. Brazil has other comodity. They dont need to denominate their trade in dollar, opening up to sanction and regulation where it is not needed. The same with OPEC, they want to maintain selling oil at profitable price to create development, revenue and lower production to increase oil price, the spigot! Here is another dimension i can think of. US deindustrialize with the reason of capitalist economy, how to maximize profit. Therefore they move it elsewhere. And then they want to avoid paying taxes in other country, to maximize profit. They give loans and aid with strings attached that changes internal policies of other countries for development. Remember IMF, World Bank, WEF? Does it stop there? No, when everything is denominated in dollar, the inflation in US will affect those who relies heavily on them. Every private entity that caused deindustrialization in US will break the country apart and their sovereignty will be lost. These entities will just move their bases to another country to restart the cycle. Big pharma, big tech, MIC and every possible domain existed in the political tools were created to siphon the life out of the global south.

[@artkidolee2162]

I don’t think China wants to replace dollar with RMB, but it doesn’t stop the BRIC countries to issue a new currency to partially replace dollar

[@dennisestradda9746]

India and China haven’t been getting along and India joining the Quad alliance is kind of awkward.

[@artkidolee2162]

@@akeshshi9137 nobody force u to own anything

[@artkidolee2162]

@@akeshshi9137 who’s the master of EU?

[@artkidolee2162]

@@akeshshi9137 I wish!

[@jdewit8148]

I have a question. What if the US is no longer able to print more money in bonds because overseas countries are selling them back and the opecdollar no longer exists ???.

[@ainz1325]

Then u need to wake up from ur dreams

[@user-cg2tw8pw7j]

​@@ainz1325 America means the old dementia reality

[@busybeenick]

How big (quantitatively) is the fiscal advantage that the US government enjoys due to US dollar reserve currency status? You mentioned that the US can currently spend much more than it otherwise could. Are there any ways to quantify this advantage and if so, what is the technical term for it?

[@detrockcity3]

Are you familiar with Brent Johnson & Dollar Milkshake Theory?

[@techxyz5176]

QE n stimulus cheques

[@jhonklan3794]

its negligible or perhaps negative since it also means we have 0 currency control. So our export value is artificially lowered.

[@jeffhicks8428]

People get way ahead of themselves. This isn't even on the Chinese radar until at least 2050. Right now they're more concerned about how they can manage their dollar denominated assets without getting ripped off by a debtor that seeks jubilee by means of inflation.

[@fedorbutochnikow5312]

the inflation is well managed

[@ghostofantarctica8216]

Gold

[@user-dc9oq2pr6v]

i doubt any of us will last till 2050

[@user-cg2tw8pw7j]

​@@user-dc9oq2pr6v Damn tourniquets

[@warsshan]

There are so many countries that are actively trying to get out of trading in USD due to the excessive printing.

[@warsshan]

@@Jazz-fg2dm You have offered no evidence on what you think will happen, perhaps you are the one that is naive and stupid? And why is China stacking so much gold??

[@user-ry2qs7xf9k]

*US dollar is a double-edged sword.* ⚔

[@ShehuStebe]

Excellent video, informative and engaging.

[@CrawfordDSmith]

Thank you for your presentation , I watched all of it .

[@devilex121]

I think it would be good to do a bit of a follow-up on this video regarding what are the actual benefits and costs of having your currency be the global reserve currency (and any resulting domestic distributional effects). Michael Pettis has been writing extensively on this very topic but I'm sure there's quite a few more names out there writing on this topic. I think another helpful thing would be to explain what you mean by the number grading you provide. For example, you gave the USD a 7 in terms of "spendability" but I would argue this may even be a 9 because almost everyone around the world will opt for the USD to settle their trades after their own currency. In many developing economies, there's actually quite a bit of black market activity where USD is very much accepted (Uzbekistan comes to mind) even before the local currency! But yeah I think this is a type of video that would be cool to revisit at least once every year. Stuff constantly changes here in both theory and practice.

[@sisyphusvasilias3943]

Thanks but the point is not for the YUAN to go head to head with the Dollar. BRICS countries are moving to settlements in local currencies. The Yuan is just part of a basket of currencies that will form an alternative to the US Dollar. Brazil and Argentina have committed to what is hoped will become a new Sth American currency and alternative to the dollar.

[@nomadvehr827]

Fickle as all those countries are. The initiative will very likely never get off the ground.

[@williamthebonquerer9181]

Argentina has 99% inflation and BRICS literally doesn't exist

[@markgicuru9326]

I just watched 2 videos, and I am hooked now. Simple explanations and to the point

[@3y3g00]

I wish the little score sheet was available in a link, preferably with attribution information, so I could share it elsewhere.

[@IslandHermit]

The Euro is already better suited for use as a reserve currency than the RMB, even after Xi's proposed changes. Yet it has made only modest inroads on the US dollar's hegemony. I guess one thing an improved RMB would have in its favour is that China is less likely to go along with American sanctions than the Euro Zone.

[@WinTeRzZ47]

Every time euo try to take over, there is a war causes by some big country. Coincidence?

[@lornelz]

Yes but China can impose its own sanctions if a nation falls under its displeasure as well. Just like the US does. So back to square 1

[@IslandHermit]

@@lornelz Only if the RMB grew to be as dominant as the US dollar currently is, which is unlikely. More likely we'd end up with two major reserve currencies and nations would be able to choose between them to mitigate the effects of any sanctions imposed by just one.

[@rap3208]

@@lornelz China doesn't interfere with other nations' internal affairs, hence they have no need to weaponize their yuan like the US does their dollar.

[@user-ry2qs7xf9k]

*Reserve currency means a budget deficit,the Maastricht doesn't allow it,Europeans are destroying their local economies because of this,if the Euro replaces the dollar the World will become poorer.*

[@Quickshot0]

You mentioned it a little, but I think how much one trusts the currency holder probably in practice will matter a lot as well. Changing the rules and making ones money and thus resources disappear for ones own personal profit would be a major risk factor in holding any currency where there is a realistic chance of this happening. This is part of the reason why Crypto so far can't really be considered a very viable currency either I think. Because you can't count on your money still being there in the end when you need it the most during a crisis.

[@wilhelmvanbabbenburg8443]

Isn't that the risk inherent in any case? I mean, you also have risk of that in stocks or loans. Although I see your point, I would be hesitant to get China bonds because I do not trust that if there is an issue foreign debt holders will be served (I guess it is my prejudice?). In the case of currency, why would they want to devalue it?

[@Quickshot0]

@@wilhelmvanbabbenburg8443 One would typically think you wouldn't, but then you do have cases like Turkey, so who knows what they think at times. Might just be the risk inherent to a single person having way to much power.

[@user-cg2tw8pw7j]

​@@Quickshot0 Like gangsters in mafia america

[@danielclawson2099]

I'm fairly certain that if a large country started to suffer a currency crisis due to people extracting value through crypto, they would shut down currency exchange, and probably outlaw transactions with the same. Banks still have to comply with the law, or they cease to exist. They would comply to stay alive. Network carriers face the same pressures. Limitations would be implemented long before it displaces national currencies: currency control is power, and no central government would give up that power willingly.

[@user-rl3iv2jk9q]

Fascinating , absorbing . Thank you .

[@MattCRHughes]

The two links at the end of the video really have a lot to say about whether this will work or not. When I found your channel, I was a total Dalio/Poszar believer, but I've been listening to Jeff Snider a lot more & his refutations certainly seem valid.

[@howluk2901]

Biggest threat to dollar hegemony is it's own action

[@maxpower9979]

Thanks, great video, essential topic. For a next video, maybe more details in how big companies manage their multi currency transactions and what could tip them towards the yuan. Maybe Chinese exporters offering discounts on payments in yuan?

[@hg1288]

In most of the video of this subject, there is always a caveat that US $ will be here for a long time to come. However, the trend is $ is weakening!

[@JV-yx3mf]

Dr. Joeri, I appreciate this knowledge. Is there anywhere where you've made a video that goes over the possible outcomes (from both US and Rest of World perspective) of the US Dollar hypothetically losing it's reserve status? I guess the question goes out to comment section in general? (example: what happens to US debt?)

[@devilex121]

I don't know how much you may be read up on comparative politics (and political economy in general) but essentially there's various distributional effects of the dollar's current status as the global reserve currency. The US stands to benefit overall if they can actually get rid of this status and have other countries share the burden. However, countries like China actually have no incentive at all (outside of political reasons) to be changing the status quo though. Many countries are very very dependent on the US being a net importer country in order to finance their economies. Debt is much weirder in macroeconomics (especially in international economics). Currently the US finances its spending through a mix of encouraging further borrowing (whether private or public) and decreasing producing capacity (by encouraging increased unemployment especially in sectors like manufacturing). In short, debt is easier to pay off when you continue to have plenty of demand for your currency. However, who benefits from the debt and who pays for the debt are very different in the US and I'd argue it's one of the main identifiers of the current political split. If global reserve currency is lost, that assumes a demand for US dollars that is lower than the current demand which will thereby make debt a bit more stressful. Again, debt is weird in international economics due to factors like military strength, issue linkage, sovereign defaults (and any related risks of contagion) etc.

[@JV-yx3mf]

@@devilex121 My friend! I'm pretty much an amatuer so I really appreciate the reply! Your link to the foreign policy article by Michael Pettis was actually very helpful in my understanding. Until now I was basically under the assumption that the export of the US dollar was nothing but positive and power creating for the US in general, buying into the "exhorbitant privilege" argument. I can now see the flip side of the problem as well. We're being carved out from the inside because of it (it seems to explain the "Elephant Curve" to me a little better). Also I had never thought about the split between those who benefit from the debt and those who pay the debt being a line on which the current political landscape is divided. That was eye opening. Let me know if there are any articles I should read in relation to that issue. Again, I really appreciate the insight

[@user-cg2tw8pw7j]

​@@JV-yx3mf America, China is bad, so we have more than 30 billion dollars in debt to China

[@tommyfisher277]

The current American problem is that they lost their industrial base and have nothing to trade besides guns and overprinted money. I'm delighted I sold off the majority of my significant assets on the financial market at a premium price before I declared them terrible investments! Because they misjudged China, the US economy is currently in trouble.

[@Gregfreemann]

@@mvanwie could we search Yvonne Annette lively up?

[@maryalchester]

@@mvanwie Sell? Why? I wouldn’t consider selling at the moment. Matter of fact is, I am a strong bull on the economy despite recent economic downturn. A boom always follows a fall. Also, gains could be made despite the direction of the economy. This is why it’s best to seek professional assistance especially when there is little knowledge on how the economy works. Take for instance, I’ve been able to passively build a $259k portfoliio in less than a year following Yvonne Anette Lively guide. All I had to do was delegate and learn at my pace. The market is an ocean not a lake

[@hueymorello5115]

@@maryalchester yes! I just did though. Sure is pricy but worth it.

[@hueymorello5115]

I mean yvonne annette lively charges

[@jerryedens877]

@@maryalchester Was she recently featured on cbcc? Where she talked about credit and debt being the fuel to a thriving economy? I mean Yvonne Annette Lively.

[@saeedhossain6099]

you need to have stuff people want for that currency... Chinese car companies are popular now in the middle east in a way they weren't 30 years ago, or even 15 years ago.

[@money-earn]

I learn more info today from your video Thanks ...Cheers

[@kamaujohn6303]

Thoughts on the Brazil and Argentina currency proposal...

[@PutXi_Whipped]

The Sur

[@tonysu8860]

Misery loves company. Argentina's economy is in sad shape and Brazil isn't more than a regional powerhouse.

[@williamthebonquerer9181]

A joke and it won't happy

[@john3784]

Please have a follow up video doing this analysis with the Euro

[@jevgenijssokolovs8482]

Forgotten 3 more things: 1. Enormous debt of USA, which is already more than 300% and growing fast, other countries are already suspicious, but if they will find a way or will see the way go out of dollars, they will do it. 2. GDP of USA when the dollar become the main currency was more than 50% of the Global economy, but now only 10%-15% of the Global Economy, USA just can not hold a role anymore. 3. Russia and Middle east (probably with Japan) - Ruble, China with Asia - RMB, India - Rupy, and South America with South Africa already building their own currency. Also now BRICS+ is building interchange currency inside BRICS bank.

[@papajoe702]

very informative ...loved it........

[@twerkingfish4029]

I don’t think the dollar is going anywhere. I think in the long term we’ll see the world split in two regarding currencies.

[@JohnMwangi-jv3pp]

It will still b there but of low value, Brics is all about west vs east

[@a2xd94]

I think the biggest obstacle to RMB becoming more widespread outside of BRICS, is the lack of openness of China in general. Unless I’m trying to avoid sanctions (which isn’t a common scenario), why would I even consider RMB?

[@ciybersal9833]

Avoiding sanctions is becoming more and more common across the middle East, Africa South Asia East Asia and Latin America and Russia..

[@thomaszhang3101]

Avoiding potential sanctions is a pretty big concern for majority of the developing world.

[@a2xd94]

@@ciybersal9833 and what types of businesses/people exactly are those who are seeking to avoid sanctions? Could we call them 'war profiteers'?

[@bermo6066]

@@a2xd94 I mean most of the energy sector in Venezuela, most industries in Cuba etc. Doesn't have to be war related, just needs to be economically crucial to an enemy of the US state.

[@nusaibahibraheem8183]

@@ciybersal9833 essentially most of the world.

[@kulturfreund6631]

Thanks for your assessments. -Would have been interesting to see a column for the Euro in the chart.

[@user-ts9nq5zw2j]

Great Review!

[@HTeo-og1lg]

You have not mentioned the elephant in the room : If I were to be a Chinese business, I would want to use direct Yuan - Trade-Partner currencies instead of having to pay a middle-man commission which is the Yuan >> USD >> Trade-Partner conversion and Trade-Partner >> USD >>> Yuan.

[@kyunhwoarang]

Oh he knew it. In fact he almost sound sane when he realized afghanistan lose half their foreign reserve. He also congratulated himself when russia foreign reserve was seized too.

[@ivcbusinesssystems6613]

You're totally confused! Everyone wants to end dollar dominance because it isn't FAIR! Secondly, they don't care about it being the reserve currency, they just want to make exchanges work in another currency.

[@TizzzLtd]

I like your videos ! Keep on producing!

[@albertorodas6479]

There is no threat it is just that the world need a different way to make business any trader may sell or dump and asset at the proper moment and this is it

[@PhilippBlum]

I would love to accept Renmenbi. It's just very hard to accept it and spend it. Even Chinese supplier only accept USD or EUR. It's quite fascinating.

[@bobmorane4926]

If Renmenbi is backed by Gold, would you still trust US dollar fiat money over Renmenbi ?

[@zesky6654]

@@bobmorane4926 lol. Delusion.

[@bobmorane4926]

@@Anonymous-ld7je Believe me, the feeling is mutual !! That's why the dollar is going down, because it cannot be trusted anymore and words like yours show the rest of the world why it's not a question of if anymore, but a question of when the dollar will be gone.

[@sualtam9509]

@@bobmorane4926 Gold backing is also based on trust. Who says that there will be enough gold to back every Renminbi. You can secretly devalue a gold based currency and that happened all the time during the 19th century being the main reason for economic crisis back then.

[@bobmorane4926]

@@sualtam9509 Just like they have nuke inspectors, u don't think they can agree to have gold auditors. It's ludicrous to even throw the idea that gold cannot be trusted vs fiat money. The idea may come to pooling all the gold reserves of the Brics countries for a common currency. You think Saudis have no gold, you think S Africa has no gold ? And it might be 1/10 of the value of that currency backed by gold. That sures beats toilet paper money that can be printed ad infinitum.

[@spider6660]

I think there's a need for an alternative to the dollar dominance in international markets.

[@ArabicLearning-MahmoudGa3far]

Thank you👍🏼

[@kucukmimarbey3183]

thanks for the content which is covering a lot of ground

[@MathieuVuylsteke]

Hey, great video! Do you have the text of this somewhere? I'd like to study this a bit more in depth

[@MoneyMacro]

I'll upload it shortly.

[@jpablo700]

YT auto generates a video transcript. I can see it on mobile, under the description.

[@ydid687]

@@jpablo700 he probably meant cited resources not captions

[@gojimoji9085]

I'm not suggesting that the Chinese Yuan will become the next reserve currency. But I think there is something to be said for the Western freezing Russian foreign currency and possible seizing of Russian assets in Western countries. To non-westerners this is a huge alarm bell to further investiture in those nations. Now non-western affluents will have to consider that if their native country doesn't play ball with the West that they're gonna get the Russian treatment. Not a replacement of the dollar but definitely something to consider.

[@ainz1325]

So u mean other countries afraid of their assets cause they wi invade other countries also ? Thats what sanctions are for so the rogue nations like russia and north korea cant do anything it wants to do

[@Ibriden]

Wonderful and very instructive! Greetings from Algeria!

[@sarwarn2107]

The idea is don't put all your eggs in one basket. And definitely not if that basket is from USA.

[@bobuhnitza]

People often mention that the USA fortunate that it can run a huge deficit because it’s status as a trade currency greatly limits inflation. Seldom mentioned is that this is not necessarily a benefit to the people. Being a net importer means jobs move overseas. It’s debatable whether those jobs are “wanted” but regardless it puts higher pressure on unemployment. Alternative to running a trade deficit, loans and currency trades are essentially investments into said country. China will have to select favored investment partners or risk losing money. I don’t really see how this builds genuine trust and liquidity. It remains to be seen if China can thread the needle with its loan plan or central bank currency swap plan. If so, China will have pulled a rabbit out of a hat.

[@evehawasinare228]

May be the aim is not for RMB to compete with the USD but to promote local currencies for the moment and a new reserve currencies later.

[@NasserAljoudi92]

I admire a chanel when it's English Caption is working. Thank you 😊

[@RobMLyon]

Great video, thanks

[@FloFloFlowable]

very good information and nice presentation - thank you :-)

[@frankkurgan2792]

I heard that BRICS counties are collaborating to create a new global trade currency the will be based on trade commodities gold, silver,oil, gas grains and minerals. I don’t believe the dollar will go away it’s just not going to be the dominant currency it is today. Basically if a can of soda is $1 today it could cost $1.50 after BRICS currency starts to be used more. OPEC countries have already agreed to trade in the new currency but they will also trade in dollars.

[@manishm9478]

Something Joeri didn't really touch on here is why a country would want to have the reserve currency status. There are some really interesting articles around about how reserve status is really an 'exorbitant burden'. Basically it hurts the US far more than it helps - it's more of a prestige thing at this stage than a financial benefit. Would love to see Joeri address this!

[@Bisquick]

I think in terms of a cultivated hubris and ideologically reified sense of international impunity (apotheosis of "American exceptionalism" as a settler-colonial project), "prestige" ie ubiquitous recognition/respect is an undeniable aspect, but in terms of the _material_ reality of this assertion concerning some abstract/nebulous notion of "burden", the veracity of _that_ charge is I think illuminated more clearly if we ask what is really the _only_ political question, inherently generating a sort of generalized range of likely possibility through anchoring/grounding our internally conceived ideological political map to its external _material_ territory (aka "scary" and "definitely evil" marxism lol...): _cui bono?_ *_Who benefits_* Reminded of Michael Parenti, an excerpt from his piece Mystery: How Wealth Creates Poverty, which highlights this lacuna cultivated under the auspices of global US empire (also see: dialectical/historical materialism): _"In their perpetual confusion, some liberal critics conclude that foreign aid and IMF and World Bank structural adjustments “do not work”; the end result is less self-sufficiency and more poverty for the recipient nations, they point out. Why then do the rich member states continue to fund the IMF and World Bank? Are their leaders just less intelligent than the critics who keep pointing out to them that their policies are having the opposite effect?_ _No, it is the critics who are stupid not the western leaders and investors who own so much of the world and enjoy such immense wealth and success. They pursue their aid and foreign loan programs because such programs do work. The question is, work for whom? Cui bono?_ _The purpose behind their investments, loans, and aid programs is not to uplift the masses in other countries. That is certainly not the business they are in. The purpose is to serve the interests of global capital accumulation, to take over the lands and local economies of Third World peoples, monopolize their markets, depress their wages, indenture their labor with enormous debts, privatize their public service sector, and prevent these nations from emerging as trade competitors by not allowing them a normal development._ _In these respects, investments, foreign loans, and structural adjustments work very well indeed._ _The real mystery is: why do some people find such an analysis to be so improbable, a “conspiratorial” imagining? Why are they skeptical that U.S. rulers knowingly and deliberately pursue such ruthless policies (suppress wages, rollback environmental protections, eliminate the public sector, cut human services) in the Third World? These rulers are pursuing much the same policies right here in our own country!_ _Isn’t it time that liberal critics stop thinking that the people who own so much of the world---and want to own it all---are “incompetent” or “misguided” or “failing to see the unintended consequences of their policies”? You are not being very smart when you think your enemies are not as smart as you. They know where their interests lie, and so should we."_ To be blunt and echo Rosa Luxemburg and her Spartacus movement's political call to action from interwar Germany, before of course being executed by the freikorps paramilitary (later becoming the SS, shocker) at the behest of Ebert's ostensibly _social democratic_ SPD party, almost immediately resonating the truth of such a succinct political dichotomy to this day, what I would say broadly juxtaposes a dichotomy of financial/social order (abstracted into purely economic terms in this video, perhaps unintentionally obscuring a more holistic consideration of the trajectory for humanity and civilization): *_socialism or_* [continued] *_barbarism._*

[@jenniferherod3910]

Very well put

[@saurabhawasthi3007]

Sir your analysis is impeccable and logical.I really appreciate your views.

[@rherydrevins]

I'm impressed by the pronunciation of "Xi Jinping" and "renminbi", especially as Joeri managed to repeatedly nail the latter one.

[@LiamNI]

Wow. You're easily impressed...

[@ellebresych5282]

He was actually an exchange student in America, he is fluent

[@rherydrevins]

@@LiamNI Well, we _are_ on KZbin.

[@philipwong9557]

Another area economist appear to ignore is the legal system. Evergrande is the current example. China does not have trusted mechanisms for creditors and investors to recover their loans and collateral through the courts. China has made it clear - keep internal companies going through subsidies if necessary but asset recovery and repayment to foreigners are secondary.

[@olderchin1558]

If you put your money in any country, you are at the mercy of its courts and laws. The US can freeze or seize your assets, as it did to Russia, Venezuela, Afghanistan and many private individuals. The courts there also favors US companies, Samsung lost most of its cases and so has many others. The US can also make up charges and arrest or seize your assets overseas as well, something China don't has ability to do, kind of makes them less threatening. Compare, don't just highlight.

[@easternlethal]

It does that because unlike the US it cannot just print more money to bail out its own institutions

[@thomasw.1854]

Ha ha ha look at your own country's financial system first, any debt recovered goes to your local lenders / local banks first.

[@mainmusik3677]

Mind your lehman brothers, SVB bank , and homeless living in street tent 😂😂😂

[@nhatuphong1579]

China are building Silk Road Belt projects, if much countries are joining it deeper, They will issue Ruaminbi as major trading currency

[@barryshaw5660]

Your correct, but, your underestimating the pace of change. Thanks

[@jperes889]

What about a currency shared by countries of the BRICS which would be backed by gold and commodities? This might be a more viable alternative to the USD.

[@williamthebonquerer9181]

A currency shared with Russia would have no value as it couldn't be traded in western countries. Also why are you pseudos so obsessed with gold back currencies it's so outdated

[@jperes889]

@@williamthebonquerer9181 when I say BRICS I am already projecting the inclusion of various countries which have already shown interest in joining like Saudi Arabia, Argentina, Iran... Now we are talking about a block which controls the majority of the energy resources, has more than half the world population and has a formidable industrial base. If these countries want the west to trade in their currencies, the west will have no choice. But it seems you are stuck in the present / past where the west is the center of the world, this has already come to an end.

[@williamthebonquerer9181]

@@jperes889 lmao, you realise Iran and Saudi Arabia hate each other?

[@luispnrf]

It won't replace UD dollar but introducing a new player will divert part of the reserves to the new currency and that could have a domino effect. BRICS countries, Venezuela, Saudi Arabia, and countries included in BRI represent a large part of the world's GDP and the world's oil reserves. And diversifing is safer for keeping reserves.

[@maaa.a.8003]

Well said..

[@markusmuller560]

This video is awesome, thanks

[@zeissiez]

A lot of current world geopolitics has to do with the dollar. Former US grand strategist Zbignew Brzezinski said: “It is IMPERATIVE that no Eurasian challenger emerges capable of dominating Eurasia and thus of also challenging America”. Because the US has just 4% of the world’s population, and it’s isolated from the Eurasia continent which has 70% of the world’s population, or 87% with Africa included. Defensively, it’s an advantage to the US, but economically, it’s a handicap. That’s why economically, Eurasia is a competitor to the US and the Euro is a threat to the dollar. How the US with an isolated 4% of world’s population stays a world hegemon? The dollar must stay as the world’s reserve currency. This allows the size of the US economy to be highly scaled up, instead of being limited by the fundamentals. To be the world’s reserve currency, the dollar must circulate in the world. The US created a huge consumption economy and moved manufacturing outside, so that dollars flow out of the US to manufacturers like China or Japan. To make products, China and Japan need energy. So dollar is then circulated to Saudi mandated by the Petrol-dollar scheme. With the US stock and financial market much more lucrative than others, the dollars from Saudi are attracted back to the US. Money printed in the US to exchange for goods from outside ends up in Wall Streets, where the rich gets richer. And that completes the cycle of circulation of the dollar. If China or Japan brings back all the dollars and exchange to their local currencies, it inflates the local currencies, making their exports expensive. So, China and Japan use some of the dollars to buy US debts (treasury bonds). That’s why the US, a rich country, is in-debt to China which has just 1/5th of the US’ GDP/cap. By holding US treasury bonds, China and Japan have to support the US dollar, for if the dollar collapses, their hard earn money would become worthless. Since the US’ debt is in its own currency, it can simply print more dollar to pay interests. Other countries have to earn dollars to pay their debts, failing which results in bankruptcy. In 2011 Obama announced “Pivot to Asia” to stop China’s rise. In 2013 China responded with the Belt and Road Initiatives (BRI) and diverted some of the dollar into BRI projects worldwide, to avoid keeping all eggs in one basket. The BRI creates new economies, therefore new trade markets for China. With a huge population, if Asia and Africa develop rapidly, the share of the US’ economy shrinks, then Euro could replace dollar as the world’s reserve currency. Then the US would no longer be able to print money freely without a hyperinflation like in Venezuela. And the size of the US economy has to fall back to the fundamentals, which is a lot smaller than the inflated economy. That’s why no country in Eurasia is allowed to catch up with the US’ economy. When Japan was catching up fast on the US in late 80s, it’s knocked down to a 3-decade stagnancy by rising Yen (Plaza Accord). And in the last 30 years, the US created wars and color revolutions in the Middle East, Central Asia and Africa to destabilise Afro-Eurasia, and the World Bank & IMF keep them poor. As the US prints lots of money, other countries’ foreign reserves in dollars shrink. Furthermore, to prevent exports to the US becoming expensive, these countries have to print money too, which devalues the savings of the people and causes inflation. It’s estimated that our savings devalue by 6~9% per year after the abolishment of the gold-backed Bretton Woods system, after which the US prints money based on just the creditability of the dollar. Free money allows the US to have a big military, and the big military, in return, protects the dollar. For the record, the US had no mercy on threats to the dollar: * In 2000 Saddam Hussein said he would sell oil in Euros not Dollars. >> Saddam was hanged by the US. * In 2009 Gaddafi wanted to make Libya export oil in pan-African Gold Dinars, not in dollar or Euro. >> Gaddafi was killed by US-backed NTC. * Iran has been trading oil in currencies other than US dollars since 2011. >> Iran was sanctioned by the US. * After being sanctioned in 2014, Putin started to trade in non-dollar. By 2019, Putin (1) completely ditched dollars in oil trades, (2) sold almost all the US treasury bonds, (3) is now the forerunner in de-dollarization. >> The US tried to topple Putin by supporting Alexei Navalny, demanded the termination of Nord Stream II, and now the Ukraine war to weaken Russia. * China (1) builds infrastructures and connect Afro-Eurasia through the BRI, (2) uses non-dollar in oil trades with Iran & Russia, (3) introduced the CIPS, an alternative to the SWIFT system which is weaponized by the US to sanction others, (4) China’s economy and high-tech are catching up fast. >> The US started a hybrid war against China: Trade war in 2018. Hong Kong color revolution in 2019. Tech war (Huawei ban, EUV banned from ASML). Got Australia into a trade war with China in 2020. Launched “Uyghur Genocide” & “Forced Labor” propagandas against Xinjiang, which is the hub of the BRI, to cut off the BRI. Sanctioned goods from Xinjiang to create joblessness and uprising against the gov. After XJ was stabilized by China, the US orchestrated a coup in Jan 2022 in Kazakhstan, located right next to Xinjiang, to cut off the BRI. In Aug 2022, Pelosi visited Taiwan to provoke a civil war. If a country supports the dollar, it is looted by the US; if a country doesn’t support the dollar, the gov is changed by the US. This is financial slavery. After the dissolution of the USSR in 1991, US President Bill Clinton had two choices: (a) Integrate Russia into Europe and abolish NATO. Or, (b) Slowly alienate Russia to keep Russia and Europe divided. Clinton chose the latter, because if there’s no Russia “threat”, there would be no more NATO to control Europe. As the first NATO Sec-General, Hastings Ismay described NATO: “To keep America IN, to keep Russia OUT, to keep Germany (Europe) DOWN”. NATO also allows the US to station missiles in Europe, keeping the US safe across the Atlantic. The US can’t have direct wars with Russia and China as they are nuclear armed. Proxy wars put the battlefields outside of the US, and also allow the US to disguise itself as an outsider. Remember in the 1980s, the US supported the Afghan Mujaheddin in a similar proxy war against the USSR and weakened it. Russia and China have clear redlines (Russia: 1.Ukraine a neutral buffer, 2.Ethnic Russian’s safety in Donbas. China: “One China principle”). The US used its proxies Zelensky and Tsai to push across the redlines to provoke wars, and get its allies to support the wars. As disclosed by Poroshenko in June 2022, Merkel & Hollande in Dec 2022, the Minsk agreements in 2014-15 were intended to buy time to arm up Ukraine against Russia, not to seek peace. No one could get the US to pull out of Afghanistan after 20 years, but it finally did in Aug 2021, to prepare for something big: Ukraine war. Shelling in Donbas by Ukrainian forces up 2800% since 16 Feb 2022 (OSCE data), crossing the redlines of Putin. And Pelosi visited Taiwan in Aug 2022, after which China surrounded Taiwan with battleships. The US’ strategy against China-Russia has always been “one at a time”. The surprising decision to take on Russia amidst the on-going hybrid war against China, was due to a major development: The Fed has printed 80% of all US no dollars in market since Jan 2020. There was $4 trillion in circulation at the beginning of 2020. The number reached $20 trillion by Oct 2021. This amounted to an astronomical 31 trillions debt. Coupled with a global rising urge to diversify into non-dollar reserves caused by the US’ sanctions to 39 countries, the US economy and the dollar are in a crisis. The US sees Europe a solution. The proxy war in Ukraine: 1.Politically divided Europe from Russia. 2.Halted Nord Stream II, and German firm Energie Baden-Wuerttemberg signed up for gas from America Venture Global LNG for 20 years at 3x the price, >the US gained control over energy supply to Europe. 3.Helps moving key industries to the US soil by de-industrializing Europe. And it’s the reason behind: (i) The US’ sabotage of Nord Stream pipelines in Sep 2022, (ii) The US’ proposed sanction on Algeria after Macron visited Algeria for a gas deal in Aug 2022, (iii) The foiled sabotage on TurkStream pipeline which feeds Russian gas to Europe via Turkey in Oct 2022, (iv) The “Inflation Reduction Act” in Aug which pulls investments from Europe. Note: The US already bagged TSMC from Taiwan. 4.The war strengthened the dollar by weakening Euro. Dollar against Euro is now the highest since NATO's bombing of Serbia in Mar 1999, two months after Euro became the currency of EU, which threatened the dollar. A strong dollar and the Fed’s steep interest rise, created a giant magnet attracting capitals from all over the world into the US, while collapsing other economies like Sri Lanka. 5.Created another long project for the Military Industrial Complex after Afghanistan. Despite the high cost: energy crisis, Euro drop, inflation, refugee influx, deindustrialization, the EU still gives full support to Ukraine. There are 5 other wars going on in the world, no one knows, but Boris Johnson visited Ukraine 3 times. Leaders in Europe are pinning hopes on Ukraine defeating Russia to say job done to Washington. Zelensky is advertised a hero to get public support in Europe and the US. The US isn’t relinquishing its privilege to loot. It’s pushing Europe and Asia into wars. Remember after WW2, Europe and Asia were devastated, but the US emerged as the world leader and the dollar became the world’s reserve currency.

[@homerflesher7426]

AFTER THIS WAR THE US WILL BE DEVASTATED 💀

[@rickoffee]

Pretty long comment but it summarizes and explains a lot of things that are currently happening.

[@Bluz1]

Brilliant, absolutely brilliant analysis.

[@samuelgitonga3770]

Haha Japan,China buy treasury bonds because its the best investment and even if they reduce it will be bought by someone else check 2007,2009,2011. War in middle east began because of creation of Israel...oil came secondary as exploitation that's why some arabic countries without oil still hate USA because of Israel issue. Is NATO expanding by forcing members to join or members join because of threat? Is Ukraine and Taiwan an USA issue or threat issue.Do you imagine having a Democratic and prosperous neighbour who you consider brothers.That's the issue of both countries. Ukraine is choosing a master either poor Russia or rich west what would you choose? Does your neighbour have a right to oppose what you choose?

[@thomasw.1854]

Thank you for sharing your detailed truth on US international hegemonic economic and military coercive dominance.

[@sephondranzer]

I feel like every time the USD looks like it *might* be up for losing its reserve currency status, the country that was hopeful to take it ends up f#!%ing up that chance big time.

[@GT-Diaries]

Great analysis 👍

[@ronm.catadman5102]

You're right!👍

[@davidhynes]

The USD has transparency and audits some China does not have.

[@DavidJohnson-dc8lu]

Not that I want to see the dollar end, but what I would like to see end are America's murderous sanction when they inevitability lose that power status. There is a catalogue of countries who could thrieve again if they were no longer oppressed by America's dollar status. So if the BRICs could form and liberate countries under sanctions and save lives then I will welcome it.

[@MrSpenceju]

Great video!

[@zhiwui2114]

One of the most popular video games is League of Legends. It has a significant competitive scene and the two most competitive regions are South Korea and China. After Samsung White won the World Championship, many of its players decided to play for Chinese teams because they probably offered better contracts. One of these players was IMP and I remember seeing a picture of him at PC cafes with an expensive (thousands of dollars) handbag. Apparently it was and still is difficult to get your money out of China.

[@eonglee44]

The idea of ending USD hegemony is real and a must, but it does not necessarily mean for RMB to take over. That is why multiple groupings (e.g. BRICS, Brazil/Argentina, etc) are planning to have various regional currencies, etc.

[@rr-ricky]

you must be naive. without US hegemony there is no globalization.

[@JigilJigil]

Says a wumao.

[@eonglee44]

@@rr-ricky Globalization is a trend, and is happening with or without US. The irony is when the world experiences the ill effects of US hegemony and starts to seek for other options than USD, US then chooses to "unipolar" rather than "multipolar".

[@ling636]

USD hegemony is based

[@foute90s]

I would love to see the same kind of analysis with the Euro compared to the Renminbi and the dollar

[@DorianWilson]

Sri Lanka didn't have the US DOLLARS they needed for 'crucual imports' Dude what are you talking about? Their top import partners are 1. China (23%) 2. India (19%) 3. UAE (6%) 4. Malaysia (4%) 5. Singapore (4%). They aren't importing practically anything from the US, and the BRICs countries they are importing from are happy to work out currency swaps rather than using USD, hence the 1.5 billion dollar Yuan currency swap between Sri Lanka and China that you failed to mention. The reason for the need for USD is actually for debt obligations they've been saddled with, mainly to western lenders, you can access the debt breakdown on their gov's website.

[@oliverd.shields2708]

I've never heard anyone speak so coherently and clearly on this topic than you have done in this video!

[@MoneyMacro]

Thank you Oliver! It took a ton of effort to summarize so much information. So, I'm really happy that it helps :)

[@raquetdude]

@@MoneyMacro haven’t watched it all yet but isn’t it the navy of the USA and it’s allies that upholds the currency as that navy allows for global trade to exist.

[@MoneyMacro]

@@raquetdude hmm that is a very old-school way of looking at it. I definitely think it played a very large role in the past. Nowadays, conventional large scale wars are not so common. So, it might not have the biggest impact.

[@Nina_banana]

I’m surprised you never mentioned anything about gold backed currencies since that is the main plan of BRICS to replace the dollar. Gold is definitely a more viable alternative to the dollar, and a lot of central banks around the world are rushing in to buy gold at the moment.

[@MoneyMacro]

Because it is not a big part of China's focus. Other BRICS yes. But, I think that should be it's own video.

[@danhtran6401]

BRICS is the stupidest thing I've ever heard...

[@nateisawesome766]

that would go against his narrative

[@mordhow1444]

@@nateisawesome766 what narrative is that.. I absolutely love the gold standard argument. Gold’s value is dependent on people’s perceptions of it, in the a similar way to fiat. Except gold doesn’t allow for any monetary flexibility what so ever. Currency is simply a means of exchange between two parties. Having gold means fuck all in that equation. The gold argument is the standard go to argument for people who know sweet FA about microeconomics, let alone macroeconomics.

[@BoleDaPole]

Gold standard insures that a country will live within its means, otherwise you're just kicking the can to the next generation by creating inflation.

[@user-of7vi6tw5m]

China does not want to displace the dollar, but China is developing and trading in RMB because it does not want to be cut off by dollar hegemony

[@beerenmusli8220]

Very interesting

[@anjaseidl4003]

All, what you say, is correct. The "transission" will be happening via warfare. The currency power - as you said - corelated (or mutually depends) on military strategy. It has always been like that. Go to an African country like Benin and you will - studying the coins - understand the switch of power (from pound, to franc to dollar).

[@M167A1]

Not a surprise, chicom strategic thinking has advocated this since the 90s.