THE MOVE AWAY FROM THE DOLLAR
The U.S. dollar is the most commonly held reserve currency in the world, accounting for nearly 62% of allocated reserves as of late 2012. The U.S. dollar became the primary reserve currency after the Bretton Woods Agreement in 1944, when delegates from 44 nations agreed to adopt it as an official reserve currency.
Moving away from the reserve currency means reducing the dependence on the U.S. dollar and diversifying the foreign exchange reserves with other currencies or assets. Some reasons for moving away from the reserve currency may include:
- Reducing the exposure to the fluctuations of the U.S. dollar and its monetary policy.
- Increasing the role and influence of other currencies, such as the euro, the yen, or the renminbi, in the global economy.
- Promoting a more balanced and multipolar international monetary system.
However, moving away from the reserve currency also poses some challenges and risks, such as:
- Losing the benefits of lower borrowing costs and easier access to global markets that come with holding the dominant reserve currency.
- Facing higher transaction costs and exchange rate risks when dealing with multiple currencies.
- Encountering coordination problems and political obstacles among different countries and regions.
- Trading in other currencies: Some countries, such as China, Brazil, India, Turkey, Iran and Russia, have been using their own currencies or other alternatives to trade with their partners, instead of relying on the U.S. dollar. This reduces their exposure to U.S. sanctions and currency fluctuations.
- Diversifying foreign reserves: Some central banks have been reducing their holdings of U.S. dollar-denominated assets, such as Treasury bonds, and increasing their shares of other currencies, such as the euro, the yuan and the yen. This reflects their desire to hedge against the risks of U.S. debt and inflation.
- Pricing commodities in other currencies: Some countries, such as China and Saudi Arabia, have been exploring the possibility of pricing oil and other commodities in their own currencies or in a basket of currencies, instead of in U.S. dollars. This could challenge the dominance of the U.S. dollar in the global energy market.
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😊Terrence
I agree the petro dollar is slowly fading away unless a US POTUS can do something about it. The US doesn't want competetion with its monoply in oil, or whatever the resource the world needs. I've acrtually heard of the BRICS countries already doing trading with its own country currency. Te thing I like about the BRICS currency is its backed by gold and not like the FED currency where its backed to nothing but a printer. If it illegal for me to print off money of my currency (CAD) it should be illegal for my Canadian government to print it too.
When they print money you know its a hidden tax in there. So, when governments print money from thin air they make sure it get taxed but you don;t see it as tax, its called inflation, the hidden government tax. Easy income for governemnts while ppl complain about companies gouging in pricing. Its not the store owners (mom and pop shops) they doing what they need to survive. It big governments and biig box stores. They all go to bed together.
Since this big inflation started I have stopped going to big stores and and going to mom and pop shop even though its expensive. I'd rather see a walmart close down over a mom and pop shop. Walmarts don't give a crap about me or any of it customers and especially their employees. SO why we supporting this kind of trash. Oh ya its cheaper.