The least ugly girl at the dive bar at the end of the night award. That's what we're vying for after a few decades of quantitative easing and now wielding the dollar as an overt weapon and trying to put the iron curtain back up. If its a contest of stability and predictability, get used to paying for your burgers with smiling pictures of chairman mao. The conspiracy theorists thought we were going after Gaddafi for the mere suggestion of a dollar alternative for arab oil, now the largest countries and the largest producers in the world are trading de-dollarized to get around our self-destructive embargo.

There's been this old debate over whether energy independence and the global petrodollar are mutually exclusive. If we're neither buying all the world's oil in dollars nor exporting enough sold for dollars to dominate the market, can the dollar remain the exclusive reserve currency of the world? I don't know if that's an inevitability, but I know we're hastening our demise when we violently buck people off from riding the dollar. Fiat currencies are foremost driven by momentum. Lose the trust of global markets, people think we're a fading power, and that becomes the reality. If we didn't force India and Russia and China to trade in RMB or rupees, they'd still feel safer demanding greenbacks.

US is a net exporter of hydrocarbons - crude and natgas (via LNG) except for PADD5 as KinderMorgan pipeline is not enough to supply all Cali hipsters with gasoline to drive. It’s cheaper to buy in Columbia/Equador and ship to Cali than to ship from Texas as you have Jones Act preventing you from using non-US ships (which needs to be repealed tbh).

US recently drew down on heavy Iranian crude they had stored in SPR for half a century to stabilize market premiums for heavy crudes after Russia/Ukraine war started. Russian REBCO is also heavy and heavy is mostly used for diesel production (hence shortages of diesel).

I personally think SPR is a relic of the past as US is now the biggest producer of hydrocarbons and is not at threat of an embargo like they were subject to during Yom Kippur.

Having said that - dedollarisation is real and is happening whether people like it or not. Weaponizing the perceived “safe haven of US Dollar” has made a lot of folks think whether they should continue playing the game at this table. China is walking away from treasury auctions (and is being marginally replaced by EU buyers like pension funds, but eu growth prospects are uncertain). World is rapidly deglobalizing which will directly affects international trade - need for common safe haven clearing currency is reduced.

Having said that there is currently no real good alternative settlement system to USD correspondent banking and bilateral trades in rub/cny/rupee/you name it are handicapped by trade balances between those countries trading. Maybe BRICS will figure out some tangled web of cross-settlements to make it happen, but im honestly not seeing this happening tomorrow.

This post was edited by Malopox on May 16 2024 11:37am

thanks for the explanation gents, that makes sense. i wonder if elimination of international currency exchanges in the future is one of the rare use cases for crypto currencies. obviously with gas fees on them currently it doesnt seem practical. and its unlikely any large institution or nation would trust if without implimentation of smart contracts that ETH has been promising is just around the bend, for years now.

My understanding is the Chinese manipulate the reporting on their economy and currency in a way that portrays it doing worse than it actually is, at least for the 2010 ballpark timeframe when I dove into it more. If that is the case, would that not be worse from a global US outlook? In contrast, US reporting it's painting a prettier picture than reality like with alterations to calculations on the last monthly CPI.

As for RU, I have not studied the economic situation enough to comment.

This post was edited by RedFromWinter on May 16 2024 03:34pm

For sure not happening any time soon, but the trajectory is pretty obvious. Dollar settlements share has most likely peaked, holding as a USD has for sure peaked, and what we'll see is a slow and then faster trend towards some basket other than dollar. I think our weaponization of the dollar is only half the reason it's happening. The other half is we've showed the world that we don't have any desire to control our debt and will just paper over it until we can't any longer. Why would any country hold their wealth in a currency that will just continually be eroded at this magnitude. If maybe we signaled to the world we're at least attempting to shift towards some balancing, but instead we're literally running deficits as if we're in a war or responding to some massive disasters.


And lmao at accusing other countries of manipulating their currencies. It's like we don't live in a world where the US creates trillions dollars of 'value' out of thin air simply through some more zeros on a screen. Russia couldn't hold a candle to that in 50 years of their versions of manipulation.

This post was edited by ofthevoid on May 16 2024 05:37pm

There is another reason not talked by the MSM much although that's their job. Governments in the US and the EU printed money like no tomorrow during the Covid time lockdowns. High inflation is partially due to this and partially due to the dedollarization:
https://www.washingtonpost.com/business/2022/02/06/federal-reserve-inflation-money-supply/

This post was edited by babun1024 on May 17 2024 03:34am

Lol

What percentage of global trade is done in dollars vs done in Chinese yuan?
I'll give you a clue. For Yuan its more than 1% but less than 3%
Get used to using the dollar as the global reserve currency until our lives end and probably our grandchildren have lived and died.

The next competitive currency even close is the Euro, and nobody is mad about the over exposed German industrial base. Lets face it.

https://www.atlanticcouncil.org/programs/geoeconomics-center/dollar-dominance-monitor/#:~:text=(2022).,-Share%20of%20foreign&text=foreign%20exchange%20transactions-,The%20data%20refers%20to%20the%20share%20of%20all%20currency%20trades,of%20all%20foreign%20exchange%20transactions.

This post was edited by Prox1m1ty on May 17 2024 05:44am

Crimea and Belbek airfield taking an absolute beating from Ukrainian deep strikes.

Russia have changed air defence strategy and begun using oil refineries to Intercept the incoming drones.

"Dragon teeth" in Sumy oblast, Ukraine