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> What currency could replace the dollar? I think the comment is that the danger to the dollar is that people are asking this question. I can think of 3 possib

by xracy 1y ago

> What currency could replace the dollar? I think the comment is that the danger to the dollar is that people are asking this question. I can think of 3 possible answers to what could replace the dollar. 1. The Yuan 2. The Euro Distant 3. The Indian Rupee Both of the first 2 are maybe not immediately ready to be the reserve currency, but if I'm in charge of either of these 2 currencies, I would certainly be thinking about how I could go about making myself the reserve currency. Especially as the US has demonstrated a capability of volatility and uncertainty twice in the last 10 years. Maybe no one is ready for this, but if you didn't start asking this question the first time this administration came around, the last 5 months have probably convinced you to make a 3-4 year plan to figure out how. (If we are asking this question, I have to imagine that gov't's more incentivized to consider this, are figuring this out themselves).

twodave 1y ago
I can’t imagine the Yuan being taken seriously as a reserve currency. Extreme differences in governing notwithstanding, is the Yuan even viable without the US dollar? The Euro could make some sense, but in order to become a reserve currency there must be enough supply. I don’t know enough about the Euro to know whether there is enough of it to serve in that role, and ramping up could be problematic. I also think any country wanting to own the next reserve currency would need to have enough military muscle to be able to both defend their own borders and police both their own trade routes, those of their currency holders, etc. That’s why I think if it’s not the US dollar then we are probably just looking at a world without a single reserve currency.
- xracy 1y ago
  China has better trade relationships with more of the rest of the world than the US does, (especially thanks to recent policy changes by the US Gov't). The only requirement to be the worlds reserve currency is that everyone has to keep it in reserve in order to trade later. One can imagine that if China has trade relationships with the rest of the world, they would begin to stockpile more of the Yuan to keep in reserve, and as a result, the need for the dollar would become lesser. Other than that, pricing commodities would be the next thing that would need to change, and that's not that hard. I could see a world where we move to 3 different reserve currencies based on the biggest economic powers and then, if the current administration continues its stupid trade war, everyone stops needing to hold onto as many dollars.

by xracy 1y ago

twodave 1y ago

I can’t imagine the Yuan being taken seriously as a reserve currency. Extreme differences in governing notwithstanding, is the Yuan even viable without the US dollar? The Euro could make some sense, but in order to become a reserve currency there must be enough supply. I don’t know enough about the Euro to know whether there is enough of it to serve in that role, and ramping up could be problematic. I also think any country wanting to own the next reserve currency would need to have enough military muscle to be able to both defend their own borders and police both their own trade routes, those of their currency holders, etc. That’s why I think if it’s not the US dollar then we are probably just looking at a world without a single reserve currency.

xracy 1y ago
China has better trade relationships with more of the rest of the world than the US does, (especially thanks to recent policy changes by the US Gov't). The only requirement to be the worlds reserve currency is that everyone has to keep it in reserve in order to trade later. One can imagine that if China has trade relationships with the rest of the world, they would begin to stockpile more of the Yuan to keep in reserve, and as a result, the need for the dollar would become lesser. Other than that, pricing commodities would be the next thing that would need to change, and that's not that hard. I could see a world where we move to 3 different reserve currencies based on the biggest economic powers and then, if the current administration continues its stupid trade war, everyone stops needing to hold onto as many dollars.