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Capital flight will decrease (in the medium term, like by the end of the decade) as US Dollar dominance diminishes. Oil trades between China-Russia-India are n

Capital flight will decrease (in the medium term, like by the end of the decade) as US Dollar dominance diminishes. Oil trades between China-Russia-India are now denominated in Rupee-Rubles or Renminbi-Rubles starting only this past year, and so the groundwork is already laid.

kasey_junk 4y ago
Maybe. But that’s not how it has worked in the past. In other cases capital controls like this cause international businesses to not trade in the currency and to instead demand other currencies to settle accounts, causing more capital flight. There is an example in the article of an investor with money stuck in China. They won’t be doing as much investment as they would if the currency was liberal for instance. The western currencies dominate foreign trade for lots of reasons, but the biggest by far is that they are easy to move.
madspindel 4y ago
https://www.youtube.com/watch?v=LiR54FPQiCs https://www.youtube.com/watch?v=LiR54FPQiCs
lvl102 4y ago
Why would USD dominance diminish? Something like 90% of IP is based out of the US. Chinese education system is a complete joke (as evidence by brain drain).
- fuoqi 4y ago
  Because having a global reserve currency strongly relies on network effects and USD share in international trade is failing steadily? How much of this IP heap is an utter trash like software patents and patents on black rectangles generated just to be added to a patent pool? From my (surface-level) understanding school-level education in the US has much bigger troubles compared to China, but luckily for the US it gets compensated (for now) by sucking brains from all over the world into the well established system of universities. And it's not like China has no experience with playing extremely loosely with IP laws.
  - lvl102 4y ago
    You sound very anti-American.
- andsoitis 4y ago
  USD share of global forex reserves has been declining for two decades, but it is still used more than all other currencies combined. Here is a good article by the IMF that gets into how various central banks are diversifying their reserves into a broader range of currencies. https://www.imf.org/en/Blogs/Articles/2022/06/01/blog-dollar-dominance-and-the-rise-of-nontraditional-reserve-currencies https://www.imf.org/en/Blogs/Articles/2022/06/01/blog-dollar...
  - lvl102 4y ago
    EUR is all but finished. Chinese RMB is also set for significant depreciation as a direct result of international trade/manufacturing “rebalance” away from everything-made-in-China model. Only thing remaining is USD.

kasey_junk 4y ago

Maybe. But that’s not how it has worked in the past. In other cases capital controls like this cause international businesses to not trade in the currency and to instead demand other currencies to settle accounts, causing more capital flight. There is an example in the article of an investor with money stuck in China. They won’t be doing as much investment as they would if the currency was liberal for instance. The western currencies dominate foreign trade for lots of reasons, but the biggest by far is that they are easy to move.

madspindel 4y ago

https://www.youtube.com/watch?v=LiR54FPQiCs https://www.youtube.com/watch?v=LiR54FPQiCs

lvl102 4y ago

Why would USD dominance diminish? Something like 90% of IP is based out of the US. Chinese education system is a complete joke (as evidence by brain drain).

fuoqi 4y ago
Because having a global reserve currency strongly relies on network effects and USD share in international trade is failing steadily? How much of this IP heap is an utter trash like software patents and patents on black rectangles generated just to be added to a patent pool? From my (surface-level) understanding school-level education in the US has much bigger troubles compared to China, but luckily for the US it gets compensated (for now) by sucking brains from all over the world into the well established system of universities. And it's not like China has no experience with playing extremely loosely with IP laws.
- lvl102 4y ago
  You sound very anti-American.
andsoitis 4y ago
USD share of global forex reserves has been declining for two decades, but it is still used more than all other currencies combined. Here is a good article by the IMF that gets into how various central banks are diversifying their reserves into a broader range of currencies. https://www.imf.org/en/Blogs/Articles/2022/06/01/blog-dollar-dominance-and-the-rise-of-nontraditional-reserve-currencies https://www.imf.org/en/Blogs/Articles/2022/06/01/blog-dollar...
- lvl102 4y ago
  EUR is all but finished. Chinese RMB is also set for significant depreciation as a direct result of international trade/manufacturing “rebalance” away from everything-made-in-China model. Only thing remaining is USD.