De-dollarization is a MEME
In this video, I explain why de-dollarization is a meme and summarize reasons why the dollar will stay king for the foreseeable future.
Ofc Trump has an opinion on this:
Statistics about USD dominance:
Share of payments:
Share of forex reserves:
How de-dollarization works:
Watch this to understand the details:
The US saves little because the US has a trade deficit that's driven by excess savings elsewhere:
- Countries with open capital accounts cannot control the relationship between S and I.
Trade deficits benefit those with liquid capital (elites):
- When the US opened its capital account, surplus countries started investing there because Anglophone countries have the best legal infrastructure for capital inflows (60-80% of trade deficits belong to these countries).
Why China's Yuan isn't a thing
Recycling excess savings in developing countries is going down:
The ROI isn't there:
CNY bond market isn't liquid:
- China pays for its projects in USD because contractors want USD (easier to recycle).
BRICs are not politically aligned:
- Chinese holdings of USTs is not equal to Chinese holdings of dollars.
- If Russia buys CNY now China has a lower surplus and can either reinvest that money domestically or boost their dollar holdings and they are boosting their holdings.
- If US reduces dollar dominance it adds domestic demand and subtracts foreign demand.
- China wants more non-USD trade, but what matters is WHAT YOU DO WITH THE REVENUE.
- Crypto settlement is also a meme.
Who to follow: