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For those who are not bothering to read this,the article essentially states that de-dollarization is happening in pockets (e.g., reserves down to ~58-60%, Treas
by hnburnsy 9mo ago
For those who are not bothering to read this,the article essentially states that de-dollarization is happening in pockets (e.g., reserves down to ~58-60%, Treasuries foreign ownership at 30%), but the dollar's core dominance persists.
What would replace it? I guess the options are Yuan, Gold, Oil or maybe BRICS in the future, none of which are safe, stable, and liquid.
- FpUser 9mo agoAs a long term Gold and Oil pretty much are
- blackoil 9mo agoOil price is highly volatile for it to be reserve currency. A mix of Gold, Yuan, Euro, Dollar makes more sense.
- demosito666 9mo agoEuro?
- tsunamifury 9mo agoThe harsh reality is that a federated state system with a very weak governing body economically and politically is extremely unlikely to be the global trade currency.
- stickfigure 9mo agoLet's what-if a scenario where the Fed is made subservient to the President and the President wants the dials turned to 11, let the next guy deal with the consequences. The dollar isn't indestructible. If not the Euro, what?
- adamc 9mo agoProbably a mix of things, including commodities like gold.
- tsunamifury 9mo agoI was referring to Europe and america together -- and I think your conjecture is real -- what if we move to a projection of holographic economy over the real one. The answer is, whichever gets the most people to cooperate and support that holographic system will survive. In general collective weak systems tend to not work well there. But hyper centralized systems tend to over index on projection. Which is why we have the separation.
- rlt 9mo agoBitcoin
- krupan 9mo agoPeople downvote this but Bitcoin has some very nice properties: - easy to verify/impossible to forge (as opposed to gold and paper currency) - fixed supply (as opposed to paper currency, oil, and even gold) - easy to transfer from one party to another (as opposed to gold, oil, and physical cash)
- adamc 9mo agoSuffers from no government having a stake in it. If it causes them problems, it can easily become illegal.
- RealityVoid 9mo agoPrecisely this makes it attractive. If it can't be _your_ currency let it at least be a currency no other nation controls.
- JumpCrisscross 9mo ago> If it can't be _your_ currency let it at least be a currency no other nation controls At that point just hoard resources. Holding a bunch of Bitcoin in a crisis is useless for a country if no other country will buy them off you in exchange for tradeable hard currency.
- RealityVoid 9mo agoYou are right. My point is that if you have international trade of even mild complexity, having a currency is very convenient so trade will end up being denominated in one. No reason it can't be some crypto that is not backed by any nation.
- 9mo ago
- jollyllama 9mo agoNothing. The Dollar is antifragile. The worse it gets, the more entrenched it becomes. [0] [0] https://en.wikipedia.org/wiki/Gresham%27s_law https://en.wikipedia.org/wiki/Gresham%27s_law
- horsawlarway 9mo agoYour linked page doesn't actually appear to render any sort of compelling argument for this. In fact - the entire argument seems to more accurately hinge the conditional left off the main saying, so the full description is: "Bad money drives out good if they exchange for the same price." But that requires a legal structure that enforces the disparity, and the summary of the whole thing basically boils down to: --- If given the choice of what money to accept, people will accept the money they believe to be of highest long-term value and not accept what they believe to be of low long-term value. If not given the choice and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their own possession and pass the bad money to others. --- But if anything - this is exactly an argument for the value of soft power to the US, because we can't enforce how other nations transact, except through soft power.
- jollyllama 9mo agoIn practice, everyone wants to spend their dollars, not their gold, or their bitcoin, or their Euros, and so dollars it will be. What else is there that anyone both with pay with and will be accepted by the other party?
- dybber 9mo agoSoon dollars might not be accepted if US companies wants to buy things in the EU, they will have to pay in euros (part of the anti coercion instrument that Macron and others have been talking about the last couple of days)
- jollyllama 9mo agoI don't think it will happen. 10% of EU bank loans that are dollar-denominated [0]. If they cut the flow of dollars into the EU, the debtors of those loans would wind up offering a premium for their goods and services to non-US companies, making them uncompetitive. It would be a roundabout tariff that would hurt the EU countries too much. [0] https://www.ecb.europa.eu/press/financial-stability-publications/fsr/focus/2025/html/ecb.fsrbox202511_03~9d7639f76c.ro.html https://www.ecb.europa.eu/press/financial-stability-publicat...
- marcosdumay 9mo agoCountries are replacing it with Yuan, Euro, Yen, Gold, Oil, and more stuff.
- g-mork 9mo agothe BRICS Unit was proposed to resolve the "Triffin dilemma", which is that the structural deficit necessary to maintain reserve status inevitably erodes trust in the currency over time. China's economy also relies on exports which would not be helped by reserve status. which is to say an eventual replacement may not be the yuan or any other single currency
- kelseyfrog 9mo agoOr the Bancor[1], like how Bretton Woods was originally envisioned. 1. https://en.wikipedia.org/wiki/Bancor https://en.wikipedia.org/wiki/Bancor
- elAhmo 9mo agoI can't believe people actually bring BRICS in serious discussions.
- troad 9mo agoHN is great for technical discussions, but is below average for political or macroeconomic discussions. A HN comment thread on those topics is essentially indistinguishable from a NYT comments section, which I mean as an unfavourable comparison. Turns out that being good at SQL does not make one good at the subtle social art / science of power and governance. If anything, the correlation is inverse. This shouldn't be surprising.
- deleted 9mo ago[deleted]
- hnburnsy 9mo ago>BRICS has implemented initiatives that could reform the global financial system, such as the New Development Bank, the BRICS Contingent Reserve Arrangement, BRICS PAY and the BRICS Joint Statistical Publication. BRICS has also advanced de-dollarization to reduce the use of the U.S. dollar as reserve currency. In its first 15 years, BRICS has established almost 60 intragroup institutions and an extensive network including think tanks and dialogues. >https://en.wikipedia.org/wiki/BRICS https://en.wikipedia.org/wiki/BRICS So what is the problem mentioning a future BRICS possibility while discussing de-dollarization. Not a challenge want to understand.
- Peaches4Rent 9mo agoExplain why. That's more than half the world's population
- direwolf20 9mo ago[dead]
- cogman10 9mo agoIt'll be fractured for a while, which isn't great. Africa will likely primarily use the yuan, Europe the euro, and a smattering of states will use the dollar. This sort of fracturing is bad because the cost of goods will be pretty much unpredictable. Trade routes may once again determine how something is priced. It also means goods that are cheap today may become massively expensive tomorrow. There might be some regional stability, but things like electronics that use a global market are going to be heavily disrupted.