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Thread: Why Will The US Dollar Lose its Reserve Status?

  1. #11

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    Quote Originally Posted by ChopperDown View Post
    Look at all that debt. The world must be crazy. How can the world still trust our dollars when looking at that? Or is there something else?
    As individuals, they can't do much about it or at least, not noticeable to the rest. Collectively though, we can change the tide. Who's first
    "Dad, why do guyz have nipples"

  2. #12

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    Quote Originally Posted by ChopperDown View Post
    Look at all that debt. The world must be crazy. How can the world still trust our dollars when looking at that? Or is there something else?
    Yes, there is fear of using something else not so favored by those who can cage or kill you.
    “Of all the contrivances for cheating the laboring class of mankind, none has been more effective than that which deludes them with paper money.”Daniel Webster (1782-1852)

  3. #13

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    Quote Originally Posted by Avocado View Post
    Why Will The US Dollar Lose its Reserve Status?
    OPEC

    .....

  4. #14

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    IMO, really easy today. And it's called FAITH. Faith backed by the baddest and biggest guns.

    In 1941 if we had not kicked butt and dropped the ace card and if Germany had succeeded, well we would be in a different economic reality today.

    The trillion dollar question,... if the USA today lost in a major military way, that faith would be lost too.

  5. #15

    Default So why would anyone with reserve assets choose China over the US?

    I think these two charts prove the point I'm trying to make. First one is the SP-500, second is Shanghai Stock Index.

    SPX.jpg

    China.jpg

    Not sure how to post full size images yet. Trial and error.

    Andy

  6. #16

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    Nope see they say not.
    CNBC.com Article : Q: Will the US dollar disappear? A: No. It won't
    Q: Will the US dollar disappear? A: No. It won't
    http://www.cnbc.com/id/101581641

    I reserve the right to change my opinion at a moment’s notice as the market dictates.

  7. #17

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    Quote Originally Posted by Avocado View Post
    I've been reading for years about how the Chinese or the Russians are going to replace the US dollar as a reserve currency. Most of the evidence revolves around replacing the dollar for daily transactions with respect to trade.

    I don't ever hear how the dollar as a reserve currency is going to be replaced with something else. The reason the dollar is so good as a reserve currency is because the market in dollars is measured as the total outstanding available to trade, currently at $17 trillion or higher (depending on whether you want to hold Treasury paper only or other paper), extremely liquid and extremely safe, at least with respect to value over time and fluctuations in that value. Yes, the dollar has gone down vs almost everything else, except for other currencies.

    How large is the Chinese bond market, and how safe is it compared to the US? Ditto for Russia or any other country thinking about reserve status.

    If you have $5 trillion to hold somewhere your safest bet is a dollar account. Gold? Try buying $5 trillion in gold, then watch what happens to the price when you stop buying. Oops!

    So who can give me a rational explanation of what currency will replace the dollar as a Reserve currency, not just for day to day transactions. And why. And more important, WHEN?

    Thank you,

    Andy
    Thanks for the sane post Andy.

    Another question is why does reserve currency really even matter? The Yen is not the reserve currency. The Euro is not the reserve currency. These economies still grow and prosper like any other. It isnt as if reserve currency is the sole requirement for success.
    The answers are in the data

  8. #18

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    Quote Originally Posted by ChopperDown View Post
    Who told you that the dollar will lose its reserve status? No one told me.
    Well . . I first heard the idea a few years ago from Chris Martenson's "The Crash Course" in which there is a lot of evidence presented to support his prediction. Since then, it's been repeated by many other doom and gloomers and youtubers . . . Other than name calling designed to discredit, has any of it be officially debunked as incorrect.

    Along the way, we've all noticed that every time someone puts a timeline to their "collapse" prediction, that date comes and goes with little fanfare. . and the video is later remade with some updated info and a new future collapse date attached. . . even Peter Schiff is casting a wide net of 2014-2017 these days. Of course, if it ever happens, he'll claim he was "right" and knew it all along . . and if it never happens, then it's still going to happen in the near future and he can't be responsible for predicting the specific timing.

    I saw this chart suggesting that "world reserve currency status" has never been a permanent thing . . so it is logical to think that the FRN will one day no longer hold the title. . . .

    My crystal ball is broken . . your guess is as good as mine. . probably better, which is why I'm here reading everybody else's opinions!
    No his mind is not for rent
    To any god or government
    Always hopeful, yet discontent
    He knows changes aren't permanent
    But change is

  9. #19

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    Quote Originally Posted by Ryanferr View Post

    ...Another question is why does reserve currency really even matter?

    The Yen is not the reserve currency.
    The Euro is not the reserve currency.
    These economies still grow and prosper like any other.

    It isnt as if reserve currency is the sole requirement for success.
    A paramount measure of currency strength is foreign reserves held.

    Accumulation of foreign reserves is only possible through trade surpluses.

    Countries with trade deficits suffer, unlike the examples you offered.

    The one exception being the country which issues the reserve currency.

    Reserve currency status grants exceptional privilege

    It is historically conferred upon those able to deal with it's inherent inflation via robust trade surpluses.

    Losing reserve status will expose the US economy for what it actually is.

    The UK dealt with that in the 40’s and 50’s, and it wasn't pretty.

    .

  10. #20

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    Quote Originally Posted by Carpenter View Post
    A paramount measure of currency strength is foreign reserves held.

    Accumulation of foreign reserves is only possible through trade surpluses.

    Countries with trade deficits suffer, unlike the examples you offered.

    The one exception being the country which issues the reserve currency.

    Reserve currency status grants exceptional privilege

    It is historically conferred upon those able to deal with it's inherent inflation via robust trade surpluses.

    Losing reserve status will expose the US economy for what it actually is.

    The UK dealt with that in the 40’s and 50’s, and it wasn't pretty.

    .
    To me it seems reserve status is a result of hegemony and that hegemony leads to reserve status, not the other way around.

    Also, if your currency is truly the best and most valuable in the world, wouldn't that lead to a trade deficit rather than surplus?
    The answers are in the data

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