[B0ycey]

To be the reserve currency the currency needs to have certain characteristics.
1] There needs to be a lot of it.
2] It really helps if it keeps selling new bonds. [Germany sells few new bonds.]
3] It needs to have other assets that can be bought with it.
4] It ought to be used by some nation that demands it to pay taxes, so someone will always have a need for it.
5] It really helps if it doesn't impose sanctions all the time. [The US is sanctioning Russi and others.]
6] It really helps if it doesn't just take your money. [The EZ did this many years ago in the Cypress banking crisis. Peter Zieham says China took millions of yuan from Russia recently.]

What other nation's currency meets more of these than the dollar?

There is the Euro. Christ you could even use the Yen and Sterling as an example with that list. But to answer the question more directly, that list is moot. The US Dollar gets its advantage because commodity exchange and values are based on the Dollar, financial exchange are used on the Western centric banking system, loans given out by the IMF and world Bank do so using Dollars, poor nations whose currency have collapsed are using the Dollar, that countries around the world are willing to hold a lot of US debt and that Saudi Arabia made a deal with the US to create what is commonly known as the the Petro dollar - and oil is king. All those things can easily be changed if new payment/banking systems or a new world bank based on the Chinese belt and road initiative is in place or a new currency is on the market that most of the global south champion or if OPEC suddenly say no to Dollars. The worse thing any nation can suffer from is complacency. You want to know why the US Dollar has weathered so many storms and still remained king? Simple. Because there isn't the structure to replace it. However that may well change if the BRICS nations work together.

[Rancid]

There is the Euro. Christ you could even use the Yen and Sterling as an example with that list. But to answer the question more directly, that list is moot. The US Dollar gets its advantage because commodity exchange and values are based on the Dollar, financial exchange are used on the Western centric banking system, loans given out by the IMF and world Bank do so using Dollars, poor nations whose currency have collapsed are using the Dollar, that countries around the world are willing to hold a lot of US debt and that Saudi Arabia made a deal with the US to create what is commonly known as the the Petro dollar - and oil is king. All those things can easily be changed if new payment/banking systems or a new world bank based on the Chinese belt and road initiative is in place or a new currency is on the market that most of the global south champion or if OPEC suddenly say no to Dollars. The worse thing any nation can suffer from is complacency. You want to know why the US Dollar has weathered so many storms and still remained king? Simple. Because there isn't the structure to replace it. However that may well change if the BRICS nations work together.

BRICS isn't going to work. Those nations can't agree on anything anyway, and each nation has its own competing motives. Most of all, all those nations are very much willing to manipulate their currencies far more than the US manipulates its own.

The US dollar isn't dominate because commodities are prices in dollars. YOu have it backwards. Commodities are prices in dollars because the dollar is available in large quantities, and the US, contrary to popular belief doesn't manipulate the currency as much as other nations do.

[B0ycey]

BRICS isn't going to work. Those nations can't agree on anything anyway, and each nation has its own competing motives. Most of all, all those nations are very much willing to manipulate their currencies far more than the US manipulates its own.

The US dollar isn't dominate because commodities are prices in dollars. YOu have it backwards. Commodities are prices in dollars because the dollar is available in large quantities, and the US, contrary to popular belief doesn't manipulate the currency as much as other nations do.

Commodities doesn't have to be based on dollars and nations are working together to exchange using their own currencies anyway. The idea that dollar pricing is going to last given how the current world politics are is naive. And I also think your faith on BRICS nations not working together is misguided. Not only is BRICS expanding, they are also all the emerging markets who want to join up. They are the also the markets that have a large percentage of the Commodities that go onto the market. It also should be said that BRICS has a very large consumer based market of over 3 bn people and they are industrial nations at that. If BRICS creates their own bank, there isn't actually very much the US can offer. Where is the need for Dollars when consumerism isn't exact an export or want?

[Rancid]

Commodities doesn't have to be based on dollars and nations are working together to exchange using their own currencies anyway. The idea that dollar pricing is going to last given how the current world politics are is naive. And I also think your faith on BRICS nations not working together is misguided. Not only is BRICS expanding, they are also all the emerging markets who want to join up. They are the also the markets that have a large percentage of the Commodities that go onto the market. It also should be said that BRICS has a very large consumer based market of over 3 bn people and they are industrial nations at that. If BRICS creates their own bank, there isn't actually very much the US can offer. Where is the need for Dollars when consumerism isn't exact an export or want?

I've gone through all of this before, so I don't really feel like rehashing everything about how much of that doesn't matter. Sorry, just lazy right now.

My response to all of this is, no.

One thing to keep in mind though, is that the current global trade system BRICS relies on, is facilitated and protected by the US, and the BRICS nations won't be able to take on that burden in place of the US. That's one small piece of why my response is no.

[B0ycey]

I've gone through all of this before, so I don't really feel like rehashing everything about how much of that doesn't matter. Sorry, just lazy right now.

My response to all of this is, no.

It's OK Rancid. Time will tell. But I will say one thing, if the US are just as complacent as your opinion, the Dollar really will be in trouble.

[Rancid]

It's OK Rancid. Time will tell. But I will say one thing, if the US are just as complacent as your opinion, the Dollar really will be in trouble.

Oh, they absolutely are complacent. That is a part of exactly why the US dollar is the reserve currency. That's kind of the beauty of it. The one thing that was sacrificed for this was the American working class, beyond that, the US just doesn't care. Its going to care even less as the supply chain moves to a near-short model.

People need to stop thinking there is some sort of "petro-dollar conspiracy" going on here. The US doesn't really care, that's why the dollar works.

Yes, it's counterintuitive, but it really is. I don't agree with Zeihan on stuff, but I think he's spot on about the dollar.

[B0ycey]

Oh, they absolutely are complacent. That is a part of exactly why the US dollar is the reserve currency. That's kind of the beauty of it. The one thing that was sacrificed for this was the American working class, beyond that, the US just doesn't care. Its going to care even less as the supply chain moves to a near-short model.

People need to stop thinking there is some sort of "petro-dollar conspiracy" going on here. The US doesn't really care, that's why the dollar works.

Yes, it's counterintuitive, but it really is. I don't agree with Zeihan on stuff, but I think he's spot on about the dollar.

Currency gets its worth because we say it has worth. If we alter the banking and trading method away from the Dollar, demand for it goes away. The truth is true wealth is from the things we make or can get from the ground and not currency. In that sense BRICS could very well work together if a new exchange medium is set up. All steves YouTube posts are on the notion the Dollar will lose its status on the current banking system. It won't. That is why the Dollar remains king. What makes it lose its status is if something replaces it within a different system. But we will have to wait and see. First BRICS needs to set up its own bank, then its own payment system and then its own currency. After that we can discuss this further.

[Rancid]

Currency gets its worth because we say it has worth. If we alter the banking and trading method away from the Dollar, demand for it goes away. The truth is true wealth is from the things we make or can get from the ground and not currency. In that sense BRICS could very well work together if a new exchange medium is set up. All steves YouTube posts are on the notion the Dollar will lose its status on the current banking system. It won't. That is why the Dollar remains king. What makes it lose its status is if something replaces it within a different system. But we will have to wait and see. First BRICS needs to set up its own bank, then its own payment system and then its own currency. After that we can discuss this further.

That's not the whole story. Also , BRICS is going to have hard time setting up a banking system and currency people will want to use. Just having a collectively large market for goods isn't good enough. Otherwise BRICS (which is a term that was created decades ago by Goldman Sachs) would have already seen success by now.

BRICS is a hype cycle, it comes and goes every few years. Just being anti-dollar isn't enough.

Anyway, I've said before, teh dollar will die one day. As of now, it's not going to happen any time soon, and it's not going to happen at the hands of BRICS.

[B0ycey]

That's not the whole story. Also , BRICS is going to have hard time setting up a banking system and currency people will want to use. Just having a collectively large market for goods isn't good enough. Otherwise BRICS (which is a term that was created decades ago by Goldman Sachs) would have already seen success by now.

BRICS is a hype cycle, it comes and goes every few years.

I don't really understand why you think a currency that has all the emerging markets in it (so will use it) along with a consumer market of half the planet is something people won't want to use. But whatever, those things I mentioned first need to be in place - and BRICS are talking about putting them in place. After that we can discuss this further. I'm not saying the Dollar is going to be replaced soon I should add. But I do think complancy will be its downfall if everyone thinks the same thing as you, that is BRICS is somehow a "hype cycle" that's isn't going anywhere. Its a growing economic forum with all the emerging markets, the very markets the US should be wooing FFS.

[Steve_American]

There is the Euro. Christ you could even use the Yen and Sterling as an example with that list. But to answer the question more directly, that list is moot. The US Dollar gets its advantage because commodity exchange and values are based on the Dollar, financial exchange are used on the Western centric banking system, loans given out by the IMF and world Bank do so using Dollars, poor nations whose currency have collapsed are using the Dollar, that countries around the world are willing to hold a lot of US debt and that Saudi Arabia made a deal with the US to create what is commonly known as the the Petro dollar - and oil is king. All those things can easily be changed if new payment/banking systems or a new world bank based on the Chinese belt and road initiative is in place or a new currency is on the market that most of the global south champion or if OPEC suddenly say no to Dollars. The worse thing any nation can suffer from is complacency. You want to know why the US Dollar has weathered so many storms and still remained king? Simple. Because there isn't the structure to replace it. However that may well change if the BRICS nations work together.

Did you see the graph posted on this site, ITT IIRC, that showed the totals of central bank's holdings of foreign currencies? It showed that the euro, Pound, and yen are being held in reserve. So, you're right they can be held, and they are being held.

Also, Rancid is right, you have it backwards, the prices of stuff in international trade are set in dollars because the dollar is the reserve currency. Not the other way around.

Lurkers, BTW, nations like China don't buy US bonds because they want to lend dollars to the US, they buy US bonds because they have a trade surplus with the US (and in total too), and therefore they accumulate dollars. Bonds pay interest and cash dollars don't, so they buy bonds, knowing they can easily sell them any time they want.
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[B0ycey]

Lurkers, BTW, nations like China don't buy US bonds because they want to lend dollars to the US, they buy US bonds because they have a trade surplus with the US (and in total too), and therefore they accumulate dollars. Bonds pay interest and cash dollars don't, so they buy bonds, knowing they can easily sell them any time they want.
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I don't really know what this has to do with anything wrote, however just because China play well under the current economic model, doesn't mean they will play alone with the status quo indefinitely. Then seen very keen on BRICS expansion and redistribution of a fairer economic system. They also have their Belt and road initiative and will make deals with anyone who wants to work with them.

[Steve_American]

I don't really know what this has to do with anything wrote, however just because China play well under the current economic model, doesn't mean they will play alone with the status quo indefinitely. Then seen very keen on BRICS expansion and redistribution of a fairer economic system. They also have their Belt and road initiative and will make deals with anyone who wants to work with them.

Peter Zeiham says that China imports most of its energy and key ingredients of fertilizer that it MUST have. He also says that, if it goes to war its enemies can easily reduce its imports of these key inputs by at least 90%.

So, it has to win the war fast, because in a long war it runs out of energy and food.

It also is staring down the barrel of the gun of climate change. Its main grain growing areas are shown by the maps created by climate models to be too hot or dry to grow crops if more and more CO2 and methane are added to the air. Any war increases such emissions.

China would have to be crazy to start a war that it can't win very fast.

It might still do it. If it does, it just makes it more certain that we will not act soon and decisively enough to avoid a +3 deg. C world. In the resulting +3 deg. world China will have less than half its current harvests, so half its people starve.
. . When that happens, whatever China gained during the war will be lost or without value, unless it was cropland it can use to move more food to China. Such cropland is not close to Chins AFAIK.
.

[B0ycey]

Peter Zeiham says that China imports most of its energy and key ingredients of fertilizer that it MUST have. He also says that, if it goes to war its enemies can easily reduce its imports of these key inputs by at least 90%.

So, it has to win the war fast, because in a long war it runs out of energy and food.

It also is staring down the barrel of the gun of climate change. Its main grain growing areas are shown by the maps created by climate models to be too hot or dry to grow crops if more and more CO2 and methane are added to the air. Any war increases such emissions.

China would have to be crazy to start a war that it can't win very fast.

It might still do it. If it does, it just makes it more certain that we will not act soon and decisively enough to avoid a +3 deg. C world. In the resulting +3 deg. world China will have less than half its current harvests, so half its people starve.
. . When that happens, whatever China gained during the war will be lost or without value, unless it was cropland it can use to move more food to China. Such cropland is not close to Chins AFAIK.
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Who wrote China is going to war? Are you saying the US will start a war with China if they dare to establish a currency that threatens the Dollar?

All I did was explain why the Dollar is unlikely to retain its dominance indefinitely. BRICS (so not just China) are working towards their own economic strategies and I suspect given BRICS is expanding with all the emerging markets, it is only a matter of time before the Western order and influence is reduced somewhat. And given how the US has reacted with sanctioning every nation that dare challenge the 'narrative', I suspect many nations would adopt a new system if it was offered up. Nonetheless there is a number of things that need to occur before the Dollar loses reserve currency status in any case. The Dollar isn't going away soon. But if everyone remains complacent then I suspect that is to BRICS's advantage. I suspect when Nixon opened the US up to China that nobody thought they'd be challenging their hegemony within a few decades either.

[Steve_American]

Who wrote China is going to war? Are you saying the US will start a war with China if they dare to establish a currency that threatens the Dollar?

All I did was explain why the Dollar is unlikely to retain its dominance indefinitely. BRICS (so not just China) are working towards their own economic strategies and I suspect given BRICS is expanding with all the emerging markets, it is only a matter of time before the Western order and influence is reduced somewhat. And given how the US has reacted with sanctioning every nation that dare challenge the 'narrative', I suspect many nations would adopt a new system if it was offered up. Nonetheless there is a number of things that need to occur before the Dollar loses reserve currency status in any case. The Dollar isn't going away soon. But if everyone remains complacent then I suspect that is to BRICS's advantage. I suspect when Nixon opened the US up to China that nobody thought they'd be challenging their hegemony within a few decades either.

AFAIK, it was China itself that plans to invade Tiawan in the next few years. Peter Zeiham also thinks it is possible in the next few years but not after that.

so, you agree with me that China is not going to start a war.

Peter Zeiham also said just yesterday that China is about to collapse. If it collapses, then it isn't an economic threat to America or the dollar. It would hurt America because the US still imports a lot from China.
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[B0ycey]

AFAIK, it was China itself that plans to invade Tiawan in the next few years. Peter Zeiham also thinks it is possible in the next few years but not after that.

so, you agree with me that China is not going to start a war.

Peter Zeiham also said just yesterday that China is about to collapse. If it collapses, then it isn't an economic threat to America or the dollar. It would hurt America because the US still imports a lot from China.
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China would go to war over Taiwan however as opinion is slowly heading towards unification it may not get to that. Nonetheless perhaps that is why China is building relationship with Russia - as a back up plan. Russia have a lot of crop amongst other things. Russia and China do well for each other. But I haven't studied the agricultural impact of China's needs beyond that it has two billion people to feed. My opinion is simply that China hasn't attacked Taiwan yet and always says that they would prefer a diplomatic approach to unification. Seems logical and I have no rrason to doubt that.

BRICS however is different. It does appear to have expansion plans amongst other their other plans. The two issues are not related. China will not go to war over BRICS expansion. Taiwan is possible but only if external forces push separatist interests. However do you think the US will declare war with China over Taiwan? I don't think they would. That is why they sell arms to them, they will be left alone as Ukraine is whatever China decide as they would want another 'neverending war' to make money off... not dead Americans.

As for China collapsing, in what way? They have all the means of production. Their GDP growth figures are better than ours too. Are you talking about the housing sector? A lot of international investors will lose a lot of money but the government will make sure their people are paid back. Also the Chinese government will not bailout the likese of Evergrande. They will instead imprison their owners.

[Steve_American]

China would go to war over Taiwan however as opinion is slowly heading towards unification it may not get to that. Nonetheless perhaps that is why China is building relationship with Russia - as a back up plan. Russia have a lot of crop amongst other things. Russia and China do well for each other. But I haven't studied the agricultural impact of China's needs beyond that it has two billion people to feed. My opinion is simply that China hasn't attacked Taiwan yet and always says that they would prefer a diplomatic approach to unification. Seems logical and I have no rrason to doubt that.

BRICS however is different. It does appear to have expansion plans amongst other their other plans. The two issues are not related. China will not go to war over BRICS expansion. Taiwan is possible but only if external forces push separatist interests. However do you think the US will declare war with China over Taiwan? I don't think they would. That is why they sell arms to them, they will be left alone as Ukraine is whatever China decide as they would want another 'neverending war' to make money off... not dead Americans.

As for China collapsing, in what way? They have all the means of production. Their GDP growth figures are better than ours too. Are you talking about the housing sector? A lot of international investors will lose a lot of money but the government will make sure their people are paid back. Also the Chinese government will not bailout the likese of Evergrande. They will instead imprison their owners.

If China was serious about trading with Russia at the scale necessary to replace the need for ships to bring stuff to and from China, then they should be building a few double track rail lines linking them to Russa, also new pipelines for gas and oil. Peter would have told me about such things if he knew about them.

I don't understand why Peter thinks China will collapse. Part of it is their demographics. They had a 1 child policy for decades. Now they lack the young women to rebuild their population. They have a lot of old people to support or let die. Peter says this about most advanced nations, but not America or Mexico.

Peter doesn't understand how fiat currencies have changed economies. He thinks there is a debt problem in China. I don't agree because I believe in MMT. You don't believe in MMT so you are more likely to believe that China's debt problem will make it collapse.
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[B0ycey]

If China was serious about trading with Russia at the scale necessary to replace the need for ships to bring stuff to and from China, then they should be building a few double track rail lines linking them to Russa, also new pipelines for gas and oil. Peter would have told me about such things if he knew about them.

I don't understand why Peter thinks China will collapse. Part of it is their demographics. They had a 1 child policy for decades. Now they lack the young women to rebuild their population. They have a lot of old people to support or let die. Peter says this about most advanced nations, but not America or Mexico.

Peter doesn't understand how fiat currencies have changed economies. He thinks there is a debt problem in China. I don't agree because I believe in MMT. You don't believe in MMT so you are more likely to believe that China's debt problem will make it collapse.
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I Do believe in MMT. MMT proved itself during quantitative easing back in 2008. Where we disagree is you think we can print money indefinitely. Sure we could, but there is an inflation price so you can solve one problem but create another. I am not going to discuss this further given we did so the last time we spoke. As for China building a pipeline with Russia. Your friend needs to do some more research

https://www.reuters.com/business/energy ... 023-09-06/

And trade

https://www.reuters.com/world/china-vow ... 023-09-19/

As I said, I don't know the implications of war in terms of feeding 2bn people. But I doubt the predictions this 'Peter' claim are right. I suspect they are more wishful thinking. But whatever, I don't think China is going to war over Taiwan for us to find out. Not unless there is outside interference which then might change things. I suspect they will just wait until there is a unification movement and let things happen naturally. It would after all be pyrrhic to try to control and basically destroy an island that seems destined to be united over time.

[Steve_American]

I Do believe in MMT. MMT proved itself during quantitative easing back in 2008. Where we disagree is you think we can print money indefinitely. Sure we could, but there is an inflation price so you can solve one problem but create another. I am not going to discuss this further given we did so the last time we spoke. As for China building a pipeline with Russia. Your friend needs to do some more research

https://www.reuters.com/business/energy ... 023-09-06/

And trade

https://www.reuters.com/world/china-vow ... 023-09-19/

As I said, I don't know the implications of war in terms of feeding 2bn people. But I doubt the predictions this 'Peter' claim are right. I suspect they are more wishful thinking. But whatever, I don't think China is going to war over Taiwan for us to find out. Not unless there is outside interference which then might change things. I suspect they will just wait until there is a unification movement and let things happen naturally. It would after all be pyrrhic to try to control and basically destroy an island that seems destined to be united over time.

You can't read well for content. I wrote "pipelines". I did say to replace what they get by ship. I meant more than 1 more. It would take many to import what they get by ship now. The same goes for RR lines.
I know they already have 1 pipeline. It is not enough.

How long will it take for Tiawan to choose to follow Hong Kong into slavery.
If it is more than 20 years then climate change will make it pointless.

Also, the US will fight to keep China from taking the highest quality computer chip factories from falling into the hands of China. It may not declare war, though. It didn't in Korea or Iraq.
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[B0ycey]

You can't read well for content. I wrote "pipelines". I did say to replace what they get by ship. I meant more than 1 more. It would take many to import what they get by ship now. The same goes for RR lines.
I know they already have 1 pipeline. It is not enough.

How long will it take for Tiawan to choose to follow Hong Kong into slavery.
If it is more than 20 years then climate change will make it pointless.

Also, the US will fight to keep China from taking the highest quality computer chip factories from falling into the hands of China. It may not declare war, though. It didn't in Korea or Iraq.
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I suspect that China and Russia will build as many pipelines that are needed given Russia is losing demand from Europe @Steve_American. And if they need rail lines, that also. China have a belt and road initiative if you wasn't aware.

Nonetheless it was interesting you mentioned computer chips. Taiwan is China. Every nation bar a few accepts that which is why they don't have a seat in the UN. We have this policy of keeping the status quo which is fine but should China and Taiwan fight, it would be classed as a civil war, not a war for territory. Given that why exactly are we not pushing for unification and perhaps Taiwan being declared an oversea territory of China with its own government and laws to keep everyone happy? My instinct is because the US wants to retain control of those chips.

[Steve_American]

I suspect that China and Russia will build as many pipelines that are needed given Russia is losing demand from Europe @Steve_American. And if they need rail lines, that also. China have a belt and road initiative if you wasn't aware.

Nonetheless it was interesting you mentioned computer chips. Taiwan is China. Every nation bar a few accepts that which is why they don't have a seat in the UN. We have this policy of keeping the status quo which is fine but should China and Taiwan fight, it would be classed as a civil war, not a war for territory. Given that why exactly are we not pushing for unification and perhaps Taiwan being declared an oversea territory of China with its own government and laws to keep everyone happy? My instinct is because the US wants to retain control of those chips.

Well, if China really wants to invade Tiawan, then yes, it should already be building pipelines and RR lines. Is it? Peter is not telling me that it is. Nobody is saying that.

Of course, as of now it is the chips. But, they weren't making chips 20 years ago.
I have seen a few reports that the US wants to contain a rival=China. To do that it wants to keep the islands that ring it as Allies. These are Japan, Okinawa and other islands, then Taiwan, then the Philippines, then Borneo/Malaya and finally Indonesia.

I don't see why China has to go against that. Japan is doing fine (better than China for its people) as an American ally.

China and Japan can compete economically with the US, why do it militarily or navally?

This is especially true with climate change.
Now is the best time to cooperate on climate measures.
IMHO, if all humans don't join the cooperation agreement, then humans will be extinct.
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