The fate of the world's currencies in the wake of the demise of the dollar. - page 79
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So some countries got rid of the dollar and what, their sausages tasted better?
Good article, but the bottom line is that there is no alternative to the $, and the examples of 'inter-merger' Bolivia, Venezuela, Honduras, Cuba, Nicaragua, Ecuador - are of little significance as GDP and world trade are not significant
The bottom line is interesting - everyone understands that although china is a major player in world trade, the mentality of the chinese people gives pause for thought )))) - i once read that even the population of china is an unknown quantity as official chinese figures are highly questionable.... It's the same with the Chinese yuan as the currency of global trade - the Chinese will be fooled without even blinking an eye! ))))
Why do we need an alternative at all? Sanctions on China and Russia? - They've been screwing around with sanctions...
Bolivia, Venezuela, Honduras, Cuba, Nicaragua, Ecuador are not significant enough? - and they don't want to be relevant, why should they? They raise guinea pigs on an industrial scale for food and do not give a damn.So some countries got rid of the dollar and what, their sausages tasted better?
You are probably 100% right here, but America is ruled by industry, if they have problems, things might change, even China has started to fall under American sanctions... alas, today's economy is politics.
The yuan has become the world's reserve currency which means additional obligations for those in the same "boat". If you look sideways, the reserve currencies used to be only those of countries with high standard of living and consumption/renewal of the goods of civilization, and now the world producer(world factory) China has been added there too - a one-sided negative for the rest of the commodity/extractive countries in the long run. I.e. technically, nothing much will change in the world if suddenly all world trade is done in yuan.
And what can you say about this article...? :
It is a trend. There's no stopping it.http://www.profinance.ru/news/2018/12/03/bpx6-kakie-strany-bez-pyli-i-shuma-aktivno-topyat-dollar.html
I think the article looks very plausible...
Unfortunately, no source or author is given,
the content is wishful thinking in broad strokes,
the sale of treasuries does not automatically diminish the dollar's role as a high-grade medium of account,
creation of a "proprietary financial instrument" that Kostin talks about is so far only in his imagination,
However, even if such an instrument is created, how would it be fundamentally different from the existing national bonds and indices?
Now about the translation of settlements into national currencies - this will have a significant impact when these same settlements will occupy a significant share of the global turnover,
Moreover, let's take a look at the charts of these currencies and see their great volatility ))))).
I will not talk about the ruble, just look at the depreciation of the lira in August and the rupee recently,
the parties to such arrangements are the first to jump on such settlements as soon as something happens,
it is no coincidence that they choose stable currencies for settlements, right? (contract denomination) - simply because no one wants to be suddenly on edge,
Further on in the text of the article we would like to note such characteristic embeddings:
"America's like a mean child". , "Americans will lose their current advantage", "...will refuse to submit to America's dictates", "they themselves want this collapse", "stock up on food" ...
well these are such phrases in general give away the whole essence of the article and the bias of the author (authors),
they have this crazy idea that America is evil and they should disappear, there is no rational basis for it and no in-depth research... as usual ...
One last thing: russia's trade turnover with china is about 70-80 billion, while the global turnover stands at 16-17 trillion for a second, feel the scale of the numbers as they say, and that does not include the financial sector,
other turnovers mentioned in the article I am too lazy to filter, but I think they are about the same, given that Russia's overall share of world turnover is about 1.5-1.8% somewhere ...
The authors should have consulted statistics before making such high-profile statements.
Unfortunately, no source or author is given,
the content is wishful thinking in broad strokes,
the sale of treasuries does not automatically diminish the dollar's role as a high-grade medium of account,
creation of a "proprietary financial instrument" that Kostin talks about is so far only in his imagination,
However, even if such an instrument is created, how would it be fundamentally different from the existing national bonds and indices?
Now about the translation of settlements into national currencies - this will have a significant impact when these same settlements will occupy a significant share of the global turnover,
Moreover, let's take a look at the charts of these currencies and see their great volatility ))))).
I will not talk about the ruble, just look at the depreciation of the lira in August and the rupee recently,
the parties to such arrangements are the first to jump on such settlements as soon as something happens,
it is no coincidence that they choose stable currencies for settlements, right? (contract denomination) - simply because no one wants to be suddenly on edge,
Further on in the text of the article we would like to note such characteristic embeddings:
"America's like a mean child". , "Americans will lose their current advantage", "...will refuse to submit to America's dictates", "they themselves want this collapse", "stock up on food" ...
well these phrases in general give away the essence of the article and the bias of the author (s),
they simply have a fixation on the topic: America is evil and they must disappear, there is no rational basis for it and there is no in-depth research ... as usual ...
One last thing: russia's trade turnover with china is about 70-80 billion, while the global turnover stands at 16-17 trillion for a second, feel the scale of the numbers as they say, and that does not include the financial sector,
other turnovers mentioned in the article I am too lazy to filter, but I think they are about the same, given that Russia's overall share of world turnover is about 1.5-1.8% somewhere ...
the authors should have consulted the statistics before making such high-profile statements.
Volatility depends on what?
Let's speculate, let's say there is a farmer who grows potatoes and parsley, another one grows cows and chicken, another one sculpts pots, a fourth one mines ore, a fifth one forges swords and spoons with forks.... And there are the mega-corporations that are churning out billions of dollars. Yes, corporations hold the lion's share of the economy (in monetary terms), but so what? Farmers and miners are comfortable exchanging the fruits of their labours using their own banknotes, will those banknotes be volatile? !!!! not if they don't use the dollar.
Therefore, a comparison of specific currencies to the dollar is not correct as long as the dollar is used for mutual settlements.... If countries move away from the dollar, the volatility of their currencies will also disappear.
Volatility depends on what?
Let's speculate, let's say there is a farmer who grows potatoes and parsley, another one grows cows and chicken, another one makes pots, a fourth one mines ore, a fifth one forges swords and spoons with forks.... And there are the mega-corporations that are churning out billions of dollars. Yes, corporations hold the lion's share of the economy (in monetary terms), but so what? Farmers and miners are quietly exchanging the fruits of their labours using their banknotes, will these banknotes be volatile? !!!! not if they don't use the dollar.
Therefore, a comparison of specific currencies to the dollar is not correct as long as the dollar itself is used for mutual settlements... If countries give up the dollar, the volatility of their currencies will also disappear.
Why would it disappear? Well, let's take Venezuela (an extreme example, but to be clear) recently abandoned the dollar (again) in mid-October, and what? should that somehow stop their hyper-exchange rate? Their rate does not even fit on the logarithmic scale )))) they are once again "implementing a new system of international payments" and some other spells are created there ))))
Volatility depends on what?
Let's speculate, let's say there is a farmer who grows potatoes and parsley, another one grows cows and chicken, another one makes pots, a fourth one mines ore, a fifth one forges swords and spoons with forks.... And there are the mega-corporations that are churning out billions of dollars. Yes, corporations hold the lion's share of the economy (in monetary terms), but so what? Farmers and miners are quietly exchanging the fruits of their labours using their banknotes, will those banknotes be volatile? !!!! not if they don't use the dollar.
Therefore, comparing specific currencies to the dollar is not correct, as long as the dollar is used for mutual settlements... If countries give up the dollar, the volatility of their currencies will also disappear.
By the way, here is another counter-example: when Zimbabwe switched to the euro and the dollar, inflation finally started to return to normal...
In short, if the issuer of a currency is not very good, then if the dollar disappears, it does nothing to make the currency better.
Why would it disappear? Well, let's say Venezuela (extreme example, but just to be clear) recently abandoned the dollar (again) in mid-October and what? Is that supposed to somehow stop their hyper-valuation? Their exchange rate does not even fit on the logarithmic scale )))) they are once again "introducing a new international payment system" and are casting some spells there ))))
Should have spawned an oil cone and a couple of revolutions. Somewhere there was something similar, they implemented and implemented, sawed and sawed, implemented and implemented, until they were pressed not to implement it.
Volatility depends on what?
Let's speculate, let's say there is a farmer who grows potatoes and parsley, another one grows cows and chicken, another one makes pots, a fourth one mines ore, a fifth one forges swords and spoons with forks.... And there are the mega-corporations that are churning out billions of dollars. Yes, corporations hold the lion's share of the economy (in monetary terms), but so what? Farmers and miners are quietly exchanging the fruits of their labours using their own currency, will this currency be volatile? !!!! not if they don't use the dollar.
Therefore, comparing specific currencies to the dollar is not correct as long as the dollar itself is used for mutual settlements... If countries give up the dollar, the volatility of their currencies will also disappear.
It is clear that the forex market is the most volatile and there is a constant news background to the dollar which rocks it.
Your example of farmers will not work in world trade, because natural conditions and living standards are different everywhere, respectively, and the cost of goods is different, it's all regulated by various duties and incentives, as well as investment in science - all done by governments (not necessarily by direct funding). Your example is a utopia that at one end of the continent food will be grown and oil produced at the other and countries will exchange multiples of fixed amounts of goods.
Well, the issue of national currencies... I cannot say about Zimbabwe, but the fact that the ruble has been depreciating for years is a clear indicator that the trade balance is negative. It may not show up in numbers, but the fact that hydrocarbons are sold and the proceeds do not go to the economy is obvious. If you remove trade in hydrocarbons from Russian exports, then there will be an actual trade balance, each increase in the dollar is another default, which is called by different names ;).