Will the dollar keep its global dominance? The US needs to get its act together

[Social Media]

 

The American position depends not only on relations with Russia, China and the Brics countries, but on fixing its own economic and political problems.

 

Is the dollar poised to lose its dominance of global economic and financial transactions? Many commentators apparently think so.

Russia obviously hopes they are right, given that it has been shut out of the US banking system and suspended from the Society for Worldwide Interbank Financial Telecommunication (Swift). China evidently wants to help the process along by encouraging countries to undertake transactions in yuan. And the Brazilian president, Luiz Inácio Lula da Silva, has called for the Brics countries (Brazil, Russia, India, China and South Africa) to create a common currency as an alternative to the dollar.

 

Russia’s shift away from the dollar, which got under way after its illegal annexation of Crimea in 2014, was prompted by the fear – and then the fact – of US sanctions. More than a few commentators have since warned that other countries, witnessing US “weaponisation” of the dollar, will follow the Kremlin’s example.

China’s yuan internationalisation campaign reflects not only tensions with the US but also a desire to project power internationally, with the drive for economic and financial self-sufficiency reflected in other aspects of Chinese policy as well. The dollar’s singular pre-eminence, in this view, is unlikely to survive a world dominated by two large economies at loggerheads, only one of which benefits from the dollar’s “exorbitant privilege”.

Similarly, Lula’s common currency campaign reflects the view that the rising power and influence of the Brics can no longer be denied, and that they deserve a seat at the top monetary table, whether the US agrees or not.

 

FULL ARTICLE

 

 

[ozimoron]

Weird, the USD is kinda strong lately. Very strong.

[Tug]

Well personally I hope it remains the dominant currency im thinking it’s going to remain the dominant one who’s would replace it?

[Hawaiian]

A world reserve currency controlled by dictatorships like China and Russia is highly unlikely.  While some inroads have been made, it is also highly unlikely that other economic powers like Japan and Germany will join in.  And I rather doubt India wants the dollar to be replaced by the yuan.

[ExpatOilWorker]

Long live the Dollar....and the Pound.....and the Euro.....and the Swiss Franc.... and the Canadian Dollar.....and the Australlian Dollar ......and the Japanese YEN, before we need to go to the toilet ???? Yuan.