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Signs of de-dollarisation emerging, Wall Street giant JPMorgan says

mikece 3y ago
Once de-dollarization hits an inflection point there's a good chance that hyperinflation and chaos will follow. I hope we can somehow avoid that.
- pseg134 3y ago
  Well that’s when WW3 starts. The US will not allow that to happen without a fight.
  - BulgarianIdiot 3y ago
    That's when the aliens invade us. When we're at our weakest!
    - mikece 3y ago
      Not even the US Marines at their strongest could repel an alien invasion. If that was going to happen it would just happen regardless of our relative strength or weakness.
      - hyperbovine 3y ago
        But but what if they die upon contact with water though?
        holmesworcester 3y ago
        Or small-batch amphetamines made by josh hartnett
        emiliobumachar 3y ago
        Or their infrastructure is exceedingly vulnerable to computer viruses.
  - mikece 3y ago
    We seem to be doing our darndest in Ukraine to poke The Bear. Maybe we'll get both but I though "they" were going to wait until Trump was re-elected so they could pin the whole mess on him.
    - boo-ga-ga 3y ago
      [flagged]
      - mikece 3y ago
        That's one narrative. If you choose to ignore the machinations of the US State Department before and through the Maidan uprising then what Russia is doing seems unprovoked and possibly even genocidal. It's amazing that in this age of speed-of-light communication the ability to suppress facts is as prevalent as it is. Personally I'm not rooting for either side, only for the killing and escalation to stop before the whole world gets pulled into it.
        eropple 3y ago
        > Personally I'm not rooting for either side, only for the killing and escalation to stop before the whole world gets pulled into it. Your selection of semi-truths suggests otherwise. The whole thing can stop tomorrow if Russia leaves.
        toss1 3y ago
        >> Personally I'm not rooting for either side The hell you aren't. "Neutrality" always favors the aggressor. And here, you are literally spreading Putin's rhetoric. No one is "poking the bear". The bear is doing what it has historically done, violently attempt to expand its empire with a genocidal assault on it's neighbor's territory. This has zero to do with The Former Guy, who would literally hand over Ukraine to Russia; remember he was first impeached for trying to blackmail Ukraine, withholding arms (such as Javelin anti-tank weapons) until Zelenskyy would falsely announce opening some fabricated investigation of his political opponent. In this case the assault is at it's root being done because Putin cannot tolerate having his public see that a state former under Soviet rule is becoming successfully (small-"d") democratic, prosperous, and seeking to associate with Europe and the free world instead of Russia. The very real problem for Putin's administration is that his subject's seeing Ukraine's success is likely to provoke rebellion against his authoritarian rule. The problem that knowledge of Ukraine's success poses can be seen well in the Russian soldier's universal theft of toilets and painting on the walls "what gives you the right to live so well?". So, (knowledge of) Ukraine's success is an existential threat to the rule of Putin and the Oligarchs. Hence Russia's genocidal rhetoric, saying that they must eliminate the very idea of Ukranian existence, and their genocidal actions, from systematic rape and torture, stealing hundreds of thousands of children for "reeducation", etc. Another key reason this is happening is that the west has in the past failed to respond. In Chechnyia, Georgia, Syria, Crimea, Donbas, and more,when Russia attacked, the west tried to avoid engaging. The result, that Russia was allowed to continue occupying those territories, and was not punished for repeated atrocities and likely war crimes, was seen as weakness and permission. So they did it again. Unless it is stopped, it WILL continue. Russian spokesman, up to former Presidents still in the govt have explicitly made statements that the Baltics, Poland, and Germany have no right to exist, and that they should be nuking England. Russia (along with other authoritarian/fascist states) is a literally an existential threat to the world of democratic nations. If not stopped in Ukraine, they WILL continue their aggression. And, China is watching very closely - if the west lets Ukraine fall, then they WILL attack Taiwan. So, the question is, if we don't stop Russia now, when do we stop them? It would have been far better to have stopped them at Crimea. But, Obama didn't do that. So, do we stop them now, or in the Baltics, or in Poland? Or, do we wait for artillery to start falling on Berlin, or London, or Washington? The cost of stopping them goes up at every step, both economically and in blood. It is more expensive now than it would have been in Syria or Crimea. But now is also incredibly cheap. Ukrainian military is literally doing all the heavy lifting, and we are spending low single-digit percentages of our DOD budget sending them third-shelf inventory. And Russia is now stopped dead in it's tracks and it's military capabilities to threaten the rest of the world are heavily degraded. Providing arms for Ukraine to defend itself against genocide is the bargain of the century, and it is literally necessary to preserve democracy globally. The current POTUS deserves huge credit for leadership in stopping this aggression, and when it is finished will take it (i.e., no one is trying to pin anything on TFG)
  - BasedAnon 3y ago
    I think they actually will tbh, I don't think the US has any fight left in it.
bwb 3y ago
“The dollar's share of traded currency volumes is just shy of record highs, at 88%, while the euro's share has shrunk by 8 percentage points in the last decade to a record low of 31%. The share of the Chinese yuan, meanwhile, has risen to a record high of 7%” Um where? Why do exports matter for FX? Exports are local?
- Closi 3y ago
  Not always - take oil as the obvious example where transactions are usually done in dollars regardless of the shipping from / shipping to location. If you were in England and wanted to buy oil in Uganda for use in a subsidiary in Brazil, you would probably use USD regardless of the fact that USD is not the 'standard' currency of any of the parties.
  - bwb 3y ago
    True, but 88% is high, this article doesn't seem to make a good case for why the other trends are worrisome... And Russia going insane is probably a good example, where they are shifting their oil direct to local currency since they have no choice given they started a war.
    - Closi 3y ago
      The Russia example there is a genuine example of de-dollarisation though, showing why exports matter.
      - bwb 3y ago
        True but as we need to cut them off, so that seems like a great move over the long term and a little pain now.
KptMarchewa 3y ago
You could find articles with the same headline for the last 30 years. One of favorite topic for particular breed of financial conspiracy theorists like Schiff.
- mylons 3y ago
  ya, but have you heard about Gold? I can sell it to you too.
  - EscapeFromNY 3y ago
    Gold? Schiff is selling NFTs now. That's right, NFTs, in 2023. https://www.tradingview.com/news/cryptoglobe:a160b0028094b:0-peter-schiff-dives-into-bitcoin-nfts-with-golden-triumph-art-project/ https://www.tradingview.com/news/cryptoglobe:a160b0028094b:0...
    - throwawayzzx 3y ago
      [flagged]
wonderwonder 3y ago
Keep stacking sats
hospitalJail 3y ago
>Signs of de-dollarisation are unfolding in the global economy, strategists at the biggest U.S. bank JPMorgan said on Monday, although the currency should maintain its long-held dominance for the foreseeable future. So... not as scary as the title. Anyway what is the alternative? Commodities? China's currency is too controlled. Euro(pe) is too reckless. I like Bitcoin for storing value against inflation, but its not a great currency. GBP? Maybe, but for such a small economy, that is a lot of eggs in 1 basket. I'm the first one to be skeptical of government fiat currency holding value, but which big player is doing it better?
- TimCTRL 3y ago
  I think what is happening is that there is a push to settle bi-lateral trade using the currencies of the two countries that are trading, and then it will grow from there. Many Countries still use the US Dollar to settle bilateral trade between themselves.
  - yokem55 3y ago
    There is a decent amount of inefficiency in doing this though because you still have to establish valuations between the bilateral currencies. How do you do that without using any reference to some kind of a reserve currency? Ie, how would you figure the 'correct' yen:peso rate with first refering to yen:usd and peso:usd? I mean, you can, but either party takes on a decent amount of risk of getting taken to the cleaners if they misjudge their direct currency ratios. Or, if you do use a reference currency, without actually settling with the reserve, the reference price can be more easily manipulated. So, that means everyone doing strict bilateral settlement has their guards up more which makes it harder to get any trade done.
- rcme 3y ago
  Things in finance can happen slowly then all at once.
- bobthepanda 3y ago
  GBP is also not exactly a sane investment right now given that country’s economic slowdown and the recent Truss panic.
throwawaymaths 3y ago
What are the alternatives? - euro Too many cooks spoil the kitchen, unpredictable policy, serious liability monetization issues. Currently Europe runs the presses about as much as the US. IT is going to be running the presses even more as the entire continent militarizes while the US's share of security agreement wanes and Europe pays for a greater share of its defense. - yuan Debt to GDP ratio of 200%, highly manipulated currency (uhh how do you think the evergrande crisis just disappeared one day), *capital controls* where citizens can't take money out of the country... When capital controls are removed, necessary to achieve reserve currency status, the whole system will suddenly be incredibly unstable. - ruble Is using the reserve currency of a pariah state really a consideration? - reais Let's use a currency that has its name because they had to trick people into acceting a remonetization for the Nth time. The whole dedollarization narrative is like some weird propaganda pushed by china. Look, the dollar sucks, and maybe some countries will flip to the yuan (it's easy to buy off politicians) but those countries that do are going to be utterly screwed because the it's structurally worse than the dollar, and emerging markets will be forced to be shackled to a currency controlled by a competing (producer) interest.
- brianmcc 3y ago
  GBP! There before the USA never mind the dollar! ;-)
  - ghusto 3y ago
    Nice troll, but now that I think about it, why not?
    - throwawaymaths 3y ago
      You could do worse, but probably the same reason why you wouldn't go with say the swedish krona: volume.
      - Ekaros 3y ago
        Also UK has way too many issues for long term stability as of reserve currency.
EscapeFromNY 3y ago
USD as a percentage of global foreign reserves has fallen 10% in 20 years... from 70% to 60%. If "de-dollarisation" does happen it's going to take a LONG time. https://www.imf.org/en/Blogs/Articles/2021/05/05/blog-us-dollar-share-of-global-foreign-exchange-reserves-drops-to-25-year-low https://www.imf.org/en/Blogs/Articles/2021/05/05/blog-us-dol...
- rcMgD2BwE72F 3y ago
  Things usually start slow until they accelerate.
  - dgfitz 3y ago
    Or stop, or turn around.
  - TMWNN 3y ago
    Badly quoting Hemingway does not insight make. In any case, EscapeFromNY understated the dollar's historical position. The dollar's share of global foreign reserves in 2022 is almost exactly the same as in 1980 and in 1995, and 10 percentage points higher than in 1990. <https://en.wikipedia.org/wiki/Reserve_currency#Global_currency_reserves https://en.wikipedia.org/wiki/Reserve_currency#Global_curren...> As dgfitz said, "Or stop, or turn around".
pcurve 3y ago
Here's 25 year trend chart. 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... The only way the ratio would change meaningfully is if the current emerging countries dependent on China were to continue to grow strongly for the next few decades.
Invictus0 3y ago
Surprising to see that so many people don't believe this is happening. Yes it is happening slowly but there quite are a lot of incentives for China and it's allies to move away from the dollar, and China has the economic power to pull it off.

Once de-dollarization hits an inflection point there's a good chance that hyperinflation and chaos will follow. I hope we can somehow avoid that.

pseg134 3y ago
Well that’s when WW3 starts. The US will not allow that to happen without a fight.
- BulgarianIdiot 3y ago
  That's when the aliens invade us. When we're at our weakest!
  - mikece 3y ago
    Not even the US Marines at their strongest could repel an alien invasion. If that was going to happen it would just happen regardless of our relative strength or weakness.
    - hyperbovine 3y ago
      But but what if they die upon contact with water though?
      - holmesworcester 3y ago
        Or small-batch amphetamines made by josh hartnett
      - emiliobumachar 3y ago
        Or their infrastructure is exceedingly vulnerable to computer viruses.
- mikece 3y ago
  We seem to be doing our darndest in Ukraine to poke The Bear. Maybe we'll get both but I though "they" were going to wait until Trump was re-elected so they could pin the whole mess on him.
  - boo-ga-ga 3y ago
    [flagged]
    - mikece 3y ago
      That's one narrative. If you choose to ignore the machinations of the US State Department before and through the Maidan uprising then what Russia is doing seems unprovoked and possibly even genocidal. It's amazing that in this age of speed-of-light communication the ability to suppress facts is as prevalent as it is. Personally I'm not rooting for either side, only for the killing and escalation to stop before the whole world gets pulled into it.
      - eropple 3y ago
        > Personally I'm not rooting for either side, only for the killing and escalation to stop before the whole world gets pulled into it. Your selection of semi-truths suggests otherwise. The whole thing can stop tomorrow if Russia leaves.
      - toss1 3y ago
        >> Personally I'm not rooting for either side The hell you aren't. "Neutrality" always favors the aggressor. And here, you are literally spreading Putin's rhetoric. No one is "poking the bear". The bear is doing what it has historically done, violently attempt to expand its empire with a genocidal assault on it's neighbor's territory. This has zero to do with The Former Guy, who would literally hand over Ukraine to Russia; remember he was first impeached for trying to blackmail Ukraine, withholding arms (such as Javelin anti-tank weapons) until Zelenskyy would falsely announce opening some fabricated investigation of his political opponent. In this case the assault is at it's root being done because Putin cannot tolerate having his public see that a state former under Soviet rule is becoming successfully (small-"d") democratic, prosperous, and seeking to associate with Europe and the free world instead of Russia. The very real problem for Putin's administration is that his subject's seeing Ukraine's success is likely to provoke rebellion against his authoritarian rule. The problem that knowledge of Ukraine's success poses can be seen well in the Russian soldier's universal theft of toilets and painting on the walls "what gives you the right to live so well?". So, (knowledge of) Ukraine's success is an existential threat to the rule of Putin and the Oligarchs. Hence Russia's genocidal rhetoric, saying that they must eliminate the very idea of Ukranian existence, and their genocidal actions, from systematic rape and torture, stealing hundreds of thousands of children for "reeducation", etc. Another key reason this is happening is that the west has in the past failed to respond. In Chechnyia, Georgia, Syria, Crimea, Donbas, and more,when Russia attacked, the west tried to avoid engaging. The result, that Russia was allowed to continue occupying those territories, and was not punished for repeated atrocities and likely war crimes, was seen as weakness and permission. So they did it again. Unless it is stopped, it WILL continue. Russian spokesman, up to former Presidents still in the govt have explicitly made statements that the Baltics, Poland, and Germany have no right to exist, and that they should be nuking England. Russia (along with other authoritarian/fascist states) is a literally an existential threat to the world of democratic nations. If not stopped in Ukraine, they WILL continue their aggression. And, China is watching very closely - if the west lets Ukraine fall, then they WILL attack Taiwan. So, the question is, if we don't stop Russia now, when do we stop them? It would have been far better to have stopped them at Crimea. But, Obama didn't do that. So, do we stop them now, or in the Baltics, or in Poland? Or, do we wait for artillery to start falling on Berlin, or London, or Washington? The cost of stopping them goes up at every step, both economically and in blood. It is more expensive now than it would have been in Syria or Crimea. But now is also incredibly cheap. Ukrainian military is literally doing all the heavy lifting, and we are spending low single-digit percentages of our DOD budget sending them third-shelf inventory. And Russia is now stopped dead in it's tracks and it's military capabilities to threaten the rest of the world are heavily degraded. Providing arms for Ukraine to defend itself against genocide is the bargain of the century, and it is literally necessary to preserve democracy globally. The current POTUS deserves huge credit for leadership in stopping this aggression, and when it is finished will take it (i.e., no one is trying to pin anything on TFG)
- BasedAnon 3y ago
  I think they actually will tbh, I don't think the US has any fight left in it.

bwb 3y ago

“The dollar's share of traded currency volumes is just shy of record highs, at 88%, while the euro's share has shrunk by 8 percentage points in the last decade to a record low of 31%. The share of the Chinese yuan, meanwhile, has risen to a record high of 7%” Um where? Why do exports matter for FX? Exports are local?

Closi 3y ago
Not always - take oil as the obvious example where transactions are usually done in dollars regardless of the shipping from / shipping to location. If you were in England and wanted to buy oil in Uganda for use in a subsidiary in Brazil, you would probably use USD regardless of the fact that USD is not the 'standard' currency of any of the parties.
- bwb 3y ago
  True, but 88% is high, this article doesn't seem to make a good case for why the other trends are worrisome... And Russia going insane is probably a good example, where they are shifting their oil direct to local currency since they have no choice given they started a war.
  - Closi 3y ago
    The Russia example there is a genuine example of de-dollarisation though, showing why exports matter.
    - bwb 3y ago
      True but as we need to cut them off, so that seems like a great move over the long term and a little pain now.

KptMarchewa 3y ago

You could find articles with the same headline for the last 30 years. One of favorite topic for particular breed of financial conspiracy theorists like Schiff.

mylons 3y ago
ya, but have you heard about Gold? I can sell it to you too.
- EscapeFromNY 3y ago
  Gold? Schiff is selling NFTs now. That's right, NFTs, in 2023. https://www.tradingview.com/news/cryptoglobe:a160b0028094b:0-peter-schiff-dives-into-bitcoin-nfts-with-golden-triumph-art-project/ https://www.tradingview.com/news/cryptoglobe:a160b0028094b:0...
  - throwawayzzx 3y ago
    [flagged]

wonderwonder 3y ago

Keep stacking sats

hospitalJail 3y ago

>Signs of de-dollarisation are unfolding in the global economy, strategists at the biggest U.S. bank JPMorgan said on Monday, although the currency should maintain its long-held dominance for the foreseeable future. So... not as scary as the title. Anyway what is the alternative? Commodities? China's currency is too controlled. Euro(pe) is too reckless. I like Bitcoin for storing value against inflation, but its not a great currency. GBP? Maybe, but for such a small economy, that is a lot of eggs in 1 basket. I'm the first one to be skeptical of government fiat currency holding value, but which big player is doing it better?

TimCTRL 3y ago
I think what is happening is that there is a push to settle bi-lateral trade using the currencies of the two countries that are trading, and then it will grow from there. Many Countries still use the US Dollar to settle bilateral trade between themselves.
- yokem55 3y ago
  There is a decent amount of inefficiency in doing this though because you still have to establish valuations between the bilateral currencies. How do you do that without using any reference to some kind of a reserve currency? Ie, how would you figure the 'correct' yen:peso rate with first refering to yen:usd and peso:usd? I mean, you can, but either party takes on a decent amount of risk of getting taken to the cleaners if they misjudge their direct currency ratios. Or, if you do use a reference currency, without actually settling with the reserve, the reference price can be more easily manipulated. So, that means everyone doing strict bilateral settlement has their guards up more which makes it harder to get any trade done.
rcme 3y ago
Things in finance can happen slowly then all at once.
bobthepanda 3y ago
GBP is also not exactly a sane investment right now given that country’s economic slowdown and the recent Truss panic.

throwawaymaths 3y ago

What are the alternatives? - euro Too many cooks spoil the kitchen, unpredictable policy, serious liability monetization issues. Currently Europe runs the presses about as much as the US. IT is going to be running the presses even more as the entire continent militarizes while the US's share of security agreement wanes and Europe pays for a greater share of its defense. - yuan Debt to GDP ratio of 200%, highly manipulated currency (uhh how do you think the evergrande crisis just disappeared one day), *capital controls* where citizens can't take money out of the country... When capital controls are removed, necessary to achieve reserve currency status, the whole system will suddenly be incredibly unstable. - ruble Is using the reserve currency of a pariah state really a consideration? - reais Let's use a currency that has its name because they had to trick people into acceting a remonetization for the Nth time. The whole dedollarization narrative is like some weird propaganda pushed by china. Look, the dollar sucks, and maybe some countries will flip to the yuan (it's easy to buy off politicians) but those countries that do are going to be utterly screwed because the it's structurally worse than the dollar, and emerging markets will be forced to be shackled to a currency controlled by a competing (producer) interest.

brianmcc 3y ago
GBP! There before the USA never mind the dollar! ;-)
- ghusto 3y ago
  Nice troll, but now that I think about it, why not?
  - throwawaymaths 3y ago
    You could do worse, but probably the same reason why you wouldn't go with say the swedish krona: volume.
    - Ekaros 3y ago
      Also UK has way too many issues for long term stability as of reserve currency.

EscapeFromNY 3y ago

USD as a percentage of global foreign reserves has fallen 10% in 20 years... from 70% to 60%. If "de-dollarisation" does happen it's going to take a LONG time. https://www.imf.org/en/Blogs/Articles/2021/05/05/blog-us-dollar-share-of-global-foreign-exchange-reserves-drops-to-25-year-low https://www.imf.org/en/Blogs/Articles/2021/05/05/blog-us-dol...

rcMgD2BwE72F 3y ago
Things usually start slow until they accelerate.
- dgfitz 3y ago
  Or stop, or turn around.
- TMWNN 3y ago
  Badly quoting Hemingway does not insight make. In any case, EscapeFromNY understated the dollar's historical position. The dollar's share of global foreign reserves in 2022 is almost exactly the same as in 1980 and in 1995, and 10 percentage points higher than in 1990. <https://en.wikipedia.org/wiki/Reserve_currency#Global_currency_reserves https://en.wikipedia.org/wiki/Reserve_currency#Global_curren...> As dgfitz said, "Or stop, or turn around".

pcurve 3y ago

Here's 25 year trend chart. 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... The only way the ratio would change meaningfully is if the current emerging countries dependent on China were to continue to grow strongly for the next few decades.

Invictus0 3y ago

Surprising to see that so many people don't believe this is happening. Yes it is happening slowly but there quite are a lot of incentives for China and it's allies to move away from the dollar, and China has the economic power to pull it off.