4 ms·

I think you are mistaken with how long before this is going to happen. Europe is already experiencing the effects and this winter will feel the full effects of

by gg82 4y ago

I think you are mistaken with how long before this is going to happen. Europe is already experiencing the effects and this winter will feel the full effects of this. The US is probably got a bit more time... but Russia, China, India, etc are working on bypassing the US Dollar for their trade, reducing the amount of trade that occurs in US Dollars. As for reserve currency status, the politicians have also made the US dollar more unfriendly when they froze the Russian Central banks reserves. This will result in other countries reconsidering where they store their wealth.

bobthepanda 4y ago
If your solution to USD being restricted is to trade in CNY you‘re in for a rude awakening. CNY does not freely flow across the Chinese border, and the government will not hesitate to put strict capital controls to limit inflows and outflows. The government knows that this prevents it from being used as an international reserve currency, but they would rather keep stability in the Chinese economy.
- eternauta3k 4y ago
  What exactly do you mean by "flow across the Chinese border"? It's my understanding that all electronic USD are in the USA, either directly in the central bank or indirectly through another bank which has an account in the central bank. They can't actually flow out of the country, except as cash.
  - bobthepanda 4y ago
    China controls the use of CNY to buy non-domestic things, particularly foreign exchange. Domestic companies and savers‘ “movement” of the currency is tightly controlled, and the government has immediately tightened the screws on everyone before. USD is not controlled in this manner, which makes it pretty easy to obtain. One of the important features of a reserve currency is easy obtainability and convertibility, but this runs counter to China’s internal stability goals.
- thewileyone 4y ago
  That's why China created the Digital Yuan for overseas trade.
  - bobthepanda 4y ago
    Digital Yuan are currently not approved for international use. And they seem to be subject to the exact same Chinese capital controls that traditional CNY are subject to, if I’m not mistaken.

by gg82 4y ago

bobthepanda 4y ago

If your solution to USD being restricted is to trade in CNY you‘re in for a rude awakening. CNY does not freely flow across the Chinese border, and the government will not hesitate to put strict capital controls to limit inflows and outflows. The government knows that this prevents it from being used as an international reserve currency, but they would rather keep stability in the Chinese economy.

eternauta3k 4y ago
What exactly do you mean by "flow across the Chinese border"? It's my understanding that all electronic USD are in the USA, either directly in the central bank or indirectly through another bank which has an account in the central bank. They can't actually flow out of the country, except as cash.
- bobthepanda 4y ago
  China controls the use of CNY to buy non-domestic things, particularly foreign exchange. Domestic companies and savers‘ “movement” of the currency is tightly controlled, and the government has immediately tightened the screws on everyone before. USD is not controlled in this manner, which makes it pretty easy to obtain. One of the important features of a reserve currency is easy obtainability and convertibility, but this runs counter to China’s internal stability goals.
thewileyone 4y ago
That's why China created the Digital Yuan for overseas trade.
- bobthepanda 4y ago
  Digital Yuan are currently not approved for international use. And they seem to be subject to the exact same Chinese capital controls that traditional CNY are subject to, if I’m not mistaken.