4 ms·

It has everything to do with USD dominance. Countries have resources thus commodities. Commodities have value. Real value. Trade in local currencies can be ba

It has everything to do with USD dominance. Countries have resources thus commodities. Commodities have value. Real value. Trade in local currencies can be backed by these commodities. Necessity will force countries to find USD alternatives.

jkepler 4y ago
Add to this that the US Federal government has conducted numerous hot wars to protect USD dominance. Remember when Saddam Hussain and then Kadafi in Libya each started selling dollars for euros? War. https://bitcoinmagazine.com/markets/petrodollar-deep-dive-with-alex-gladstein https://bitcoinmagazine.com/markets/petrodollar-deep-dive-wi... But now the US is even destroying confidence in the dollar, through its confiscation of the Afgan central bank reserves (which included private citizens' deposit accounts) and distributing the money to families of Sept 11th victims; or freezing the Russian central bank reserves, even though the international settlement system was meant to be apolitical.
- giaour 4y ago
  > even though the international settlement system was meant to be apolitical “Apolitical” does not mean “usable by any party for any transaction.” SWIFT policy prohibits using its system in support of illegal activity [0], and the settlement system has been denied to sanctioned countries before [1]. [0]: https://www.swift.com/about-us/legal/compliance-0/fighting-illegal-financial-activities https://www.swift.com/about-us/legal/compliance-0/fighting-i... [1]: https://www.aljazeera.com/economy/2018/11/5/what-swift-is-and-why-it-matters-in-the-us-iran-spat https://www.aljazeera.com/economy/2018/11/5/what-swift-is-an...
  - immibis 4y ago
    Illegal according to whom?
    - selectodude 4y ago
      Illegal according to the United States, who regulates the SWIFT system and is the issuer and owner of all US Dollars. This isn't complicated.
      - giaour 4y ago
        SWIFT is regulated by Belgium and the EU, not the US: https://www.swift.com/about-us/legal/compliance-0/swift-and-sanctions#how-is-swift-governed https://www.swift.com/about-us/legal/compliance-0/swift-and-...?
    - CamperBob2 4y ago
      Any decent human being, in the case of Russia's invasion of Ukraine.
    - giaour 4y ago
      Per the linked document: “SWIFT has a history of cooperating in good faith with authorities such as central banks, treasury departments, law enforcement agencies and appropriate international organisations, such as the Financial Action Task Force ( FATF*), in their efforts to combat abuse of the financial system for illegal activities.”
      - immibis 4y ago
        In Qatar it's illegal to be gay. Will SWIFT combat abuse of the financial system for the activity of being gay?
- ShivShankaran 4y ago
  You are being heavily downvoted and you are closer to truth than anyone else. The afghan and russia fiasco has proven that USD floor can be yanked at anytime and most countries are desperate to get out of USD trades. If BRICS launches their own basket of currency that will be the first major salvo at USD. The further a society drifts from truth, the more they will hate those who speak it.
pakitan 4y ago
> Necessity will force countries to find USD alternatives. You're misunderstanding the fundamental problem. It's not about a "shortage" of USD for Ghana, where they ran out of USD suppliers and no one is willing to sell them USD so they will need to switch to RUB. You get USD by exporting stuff and you can import stuff when you spend USD. The fundamental problem for Ghana is that they need to import valuable stuff but they are running out of valuable stuff to export in exchange, hence their USD reserves are dwindling. You can't solve that problem by changing the currency. If someone is to give you their RUB, they'll still want valuable stuff in exchange.
- throwawaylinux 4y ago
  They're running out of valuable stuff ignoring the gold. Most gold producing nations export their gold like any other metal or mineral, don't they?
  - pakitan 4y ago
    I'm not intimately familiar with Ghana's economy. I was just pointing out that this is a trade balance problem not a "we can't get our hands on USD" problem. Maybe they haven't exported gold before and now, by exporting, they'll be able to fill in the gap. Or maybe the gap is so big they'll eventually run out of gold AND USD. Either way, it has nothing to do with the USD status as a reserve currency.

jkepler 4y ago

Add to this that the US Federal government has conducted numerous hot wars to protect USD dominance. Remember when Saddam Hussain and then Kadafi in Libya each started selling dollars for euros? War. https://bitcoinmagazine.com/markets/petrodollar-deep-dive-with-alex-gladstein https://bitcoinmagazine.com/markets/petrodollar-deep-dive-wi... But now the US is even destroying confidence in the dollar, through its confiscation of the Afgan central bank reserves (which included private citizens' deposit accounts) and distributing the money to families of Sept 11th victims; or freezing the Russian central bank reserves, even though the international settlement system was meant to be apolitical.

giaour 4y ago
> even though the international settlement system was meant to be apolitical “Apolitical” does not mean “usable by any party for any transaction.” SWIFT policy prohibits using its system in support of illegal activity [0], and the settlement system has been denied to sanctioned countries before [1]. [0]: https://www.swift.com/about-us/legal/compliance-0/fighting-illegal-financial-activities https://www.swift.com/about-us/legal/compliance-0/fighting-i... [1]: https://www.aljazeera.com/economy/2018/11/5/what-swift-is-and-why-it-matters-in-the-us-iran-spat https://www.aljazeera.com/economy/2018/11/5/what-swift-is-an...
- immibis 4y ago
  Illegal according to whom?
  - selectodude 4y ago
    Illegal according to the United States, who regulates the SWIFT system and is the issuer and owner of all US Dollars. This isn't complicated.
    - giaour 4y ago
      SWIFT is regulated by Belgium and the EU, not the US: https://www.swift.com/about-us/legal/compliance-0/swift-and-sanctions#how-is-swift-governed https://www.swift.com/about-us/legal/compliance-0/swift-and-...?
  - CamperBob2 4y ago
    Any decent human being, in the case of Russia's invasion of Ukraine.
  - giaour 4y ago
    Per the linked document: “SWIFT has a history of cooperating in good faith with authorities such as central banks, treasury departments, law enforcement agencies and appropriate international organisations, such as the Financial Action Task Force ( FATF*), in their efforts to combat abuse of the financial system for illegal activities.”
    - immibis 4y ago
      In Qatar it's illegal to be gay. Will SWIFT combat abuse of the financial system for the activity of being gay?
ShivShankaran 4y ago
You are being heavily downvoted and you are closer to truth than anyone else. The afghan and russia fiasco has proven that USD floor can be yanked at anytime and most countries are desperate to get out of USD trades. If BRICS launches their own basket of currency that will be the first major salvo at USD. The further a society drifts from truth, the more they will hate those who speak it.

pakitan 4y ago

> Necessity will force countries to find USD alternatives. You're misunderstanding the fundamental problem. It's not about a "shortage" of USD for Ghana, where they ran out of USD suppliers and no one is willing to sell them USD so they will need to switch to RUB. You get USD by exporting stuff and you can import stuff when you spend USD. The fundamental problem for Ghana is that they need to import valuable stuff but they are running out of valuable stuff to export in exchange, hence their USD reserves are dwindling. You can't solve that problem by changing the currency. If someone is to give you their RUB, they'll still want valuable stuff in exchange.

throwawaylinux 4y ago
They're running out of valuable stuff ignoring the gold. Most gold producing nations export their gold like any other metal or mineral, don't they?
- pakitan 4y ago
  I'm not intimately familiar with Ghana's economy. I was just pointing out that this is a trade balance problem not a "we can't get our hands on USD" problem. Maybe they haven't exported gold before and now, by exporting, they'll be able to fill in the gap. Or maybe the gap is so big they'll eventually run out of gold AND USD. Either way, it has nothing to do with the USD status as a reserve currency.