Reaction & Commentary
US Dollar LOST 86% Of Its Value & Continues To Lose Its Global Hegemony To Chinese YuanBeen increasing their Central Bank Reserves held in Yuan for a while now it is not a secret that the value of the US dollar has been slipping for years which raises questions about the Dollar’s future and if the Chinese Yuan has potential as a global Reserve currency there’s been a
Significant shift in the global position of the United States dollar due to well-known economic and political events some experts go so far as to say that the days of its Global hegemony are slowly coming to an end there’s no way around it the country’s trillion dollar debt the Dollar’s
Diminishing share in global money supply and of course the fed’s policies are quoted as the main reasons for the United States dollar declining Value First a little bit of context let’s talk about what it takes for any currency to you gain the global Reserve status there’s
Actually no official process of achieving it it happens over time and as a result of wise economic political and financial decisions Global Reserve currency requires the issue in country to be perceived as both economically and socially secure and stable that’s all there is to
It there have been six Global Reserve currencies in history the very first country to enjoy such popularity was Portugal followed by Spain in the 15th century then currencies that were issued by the Netherlands and France dominated World Markets during the 17th and the 18th centuries the pound
Sterling that was issued by the British Empire was the longest lasting Global Reserve currency well until the end of the first world war as the United States economy grew and surpassed that of the Great Britain after World War II the United States dollar emerged as the next Global
Reserve currency and it essentially started it was the beginning of the new Global Financial system as of today the United States dollar has been the world’s primary years of currency for 70 plus years in the beginning under the Bretton Woods system the dollar was packed to gold and
Most other currencies were pegged to the dollar of course this type of an arrangement was extremely beneficial for the United States it served as the Catalyst for the US to gain its superpower status when the gold standard was removed it didn’t have any noticeable impact on the US dollar
At first in addition to that oil has been trading in US Dollars which has kept its value relatively stable but now that the UAE and Qatar are moving toward accepting Yuan instead of dollars for oil shipments it will have an impact on how yuan is perceived internationally and it will most
Definitely negatively impact the value of the US dollar over time now before we can continue a quick reminder to check out our sponsor expressvpn it is my recommended virtual private Network for secure online browsing claim your three full months of free service when you sign up using the
Link that I shared in the description below having your own currency as the global Reserve currency has so many benefits it has so many privileges it gives the United States government immense level of control over the financial system globally including sanctioning adversaries it allows the
Government to borrow in its own currency which is much cheaper since there is no need to consider foreign exchange rates American companies benefit from this system as well because it allows them to do business in dollars without having to pay the costs of converting into another currency
It is not a secret that the US dollar has been losing its value partially as the result of multiple foreign governments deciding to find safer more stable alternatives to it mostly due to political reasons as well as obvious signs that the United States economy is weakening in 2022
When the FED started to raise interest rates you may remember the Dollar’s value increased because investors saw the us as a safe economic space but since then in 2023 the value dropped because those hikes those interest rate hikes don’t seem to bring the results everyone was hoping to see
Now another important factor that would determine the future of the US dollar as the global Reserve currency is how and when the war in Ukraine ends depending on the outcome of course the value of
Euro may increase and if it does it will push the value of the US dollar further down the Dollar’s declining value is seen as an opportunity for China to convince foreign Banks to hold Chinese yuan in reserves while Yuan won’t get party with the US dollar anytime soon there are three main
Areas to watch here last year in 2022 China made a major step towards this by partnering up with five nations in the region Indonesia Malaysia Hong Kong Singapore and Chile the Yuan has already been traded directly between China and two other countries Australia and Japan so that means
That both countries do not need United States dollars to trade with China the second thing to consider is the increasingly comfortable partnership between China and Russia Chinese Yuan has effectively been established as a reserve currency in Russia Russia holds about 20 percent
Of its reserves denominated in Yuan so as China continues to develop its existing and potential relationships and Partnerships around the world its currency will continue to benefit from it for example we already know that China facilitated the UAE and Iran to restart their relationship
Just weeks ago so that’s an important step towards their goal the third reason that could help you on effectively become an alternative Global Reserve currency is euan China’s Central Bank digital currency it has the potential to challenge the dollar and of course it will so what we might
See as the US dollar continues to decline and the world becomes increasingly multi-polar Yuan has a real potential to be an appealing alternative to the United States dollar a couple of studies done by economists point to the fact that yuan’s current position is similar to the US Dollars
Position back in 1950s which means that it is in a position to only move up to gain value if this is correct we may just be a few decades before the Yuan gains party one last thing I
Would like to point out here is that in order for the Yuan to gain that status of an alternative to the US dollar one thing would have to happen we would have to see a more transparency more government transparency the lack of transparency may be the main drawback against the Yuan so as
You can see there is a lot standing in the way to displace the US dollar at this time as the global Reserve currency but the process has started and there is a variety of factors at play here
Do you believe that the US dollar may eventually give up some or all of its Reserve status comment below let me know I would love to hear from you thank you for watching the video If you learned
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