Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Not to mention there are extreme trust issues all around the world.
So far, thankfully.
Not to mention there are extreme trust issues all around the world.
They have already trade internally with their own currencies swaps but plan to organize a new common currency backed by Gold, Nat resources and goods. USA GDP =$24 trillions (backed US$), EU GDP=$18.8 Trillions (backed Euro) BRICS GDP= $31.5 Trillions will back new currency. Since 2008 we printed enormous amount of dollars and the world had absorbed it for the trade. However, we had not equally increased production of new goods and services to cover those money, moreover we use US$ as weapon with sanctions on adversaries and everyone understands it. The planned new currency would not be Chinese but common for the BRICS Market and all of other countries who are in the line to join them (see my and others above post) and if it is backed by Gold and Natural Resources it will attract the rest of the world vs current system. Moreover, the return of US$$ currently kept by the world for trade will be chasing whatever goods and services we produce here and it will continue inflation here.Cant be a world currency if you wont give the international community access to your capital vehicles/markets. China unwilling to do that. Not to mention there are extreme trust issues all around the world.
They have already trade internally with their own currencies swaps but plan to organize a new common currency backed by Gold, Nat resources and goods. USA GDP =$24 trillions (backed US$), EU GDP=$18.8 Trillions (backed Euro) BRICS GDP= $31.5 Trillions will back new currency. Since 2008 we printed enormous amount of dollars and the world had absorbed it for the trade. However, we had not equally increased production of new goods and services to cover those money, moreover we use US$ as weapon with sanctions on adversaries and everyone understands it. The planned new currency would not be Chinese but common for the BRICS Market and all of other countries who are in the line to join them (see my and others above post) and if it is backed by Gold and Natural Resources it will attract the rest of the world vs current system. Moreover, the return of US$$ currently kept by the world for trade will be chasing whatever goods and services we produce here and it will continue inflation here.
Cant be a world currency if you wont give the international community access to your capital vehicles/markets. China unwilling to do that. Not to mention there are extreme trust issues all around the world.
By the way, on a wider point. We won't "solve" the BRIC issue a couple of months after it's officially announced. That will be a couple of years (or more) too late to have any influence. IF we solve it, we'll begin solving it now. Of course, we won't, so I see BRIC (or some permutation - change only the letters other than "C") as inevitable.
The Chinese think globally and strategically while much of USA business thinks locally and tactically. ("We'll deal with that when it comes up.") That won't w*rk any more. We're up against a different competitor (adversary.) I have no special insight, but I sense we are ignoring such things here in USA. IOW I've just told you more than I know so YMMV.
There are a couple of items with this.
First is China appears to be implementing a "have your cake (control) and eat it too" strategy where countries use the yuan for trade and then any surplus yuan can be exchanged via gold in a "free trade zone-like" special trading arrangement with the Shanghai International Gold Exchange. China keeps control of the yuan while still allowing other users a way to convert their extra yuan into anything else via a gold exchange.
The other shoe is that there doesn't need to be a single reserve currency to replace the USD in order to have the same effect. In the so called multi-polar world there can be many means of trade without using USD and in the end the net is the same: Less USDs needed for foreign trade. When fewer USDs are needed the market for US debt shrinks just as the US is planning on selling trillions more into a now smaller market.
There was a recent article that I found interesting that described China's Belt and Road Initiative (BRI) in extremely favorable terms where China was being extremely accommodating to the other countries... treating them as an equal and respecting their sovereignty. The article contrasted this to what was called the condescending, manipulative carrot-and-stick approach used by the essentially US controlled IMF, World Bank, etc.Thanks for this interesting perspective.
"The planned new currency would not be Chinese but common for the BRICS Market"
Are you suggesting that China would not be the "power" behind the new currency? Would they not be in a position to wield that power as the USA currently does with the dollar?
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This. We're just so occupied with fighting stupid culture wars to ever start thinking strategically.
Lastly it goes without saying that the rest of the world can see that the US has past it's peak and is in decline socially, politically, economically, and militarily. Meanwhile China's star is seen as rising and seems to be the horse of choice in which to hitch their wagon to.
Lastly it goes without saying that the rest of the world can see that the US has past it's peak and is in decline socially, politically, economically, and militarily. Meanwhile China's star is seen as rising and seems to be the horse of choice in which to hitch their wagon to.
This reminds of me what they said about Japan in the 80s, Asian tigers in the 90s.
Who are China's allies? Russia? N. Korea?
I think if you list the US's allies, the list will be longer.
I always scribed to what Buffet said about the US. We'll see what happens. I personally don't think it would be a bad thing to be a multi-polar world.
…most of the gold in the world is held in....NYC, which holds gold reserves from many countries, not just the US or Europe.
And there's a finite amount of gold. We got off the gold standard for specific reasons. Even so, most of the gold in the world is held in....NYC, which holds gold reserves from many countries, not just the US or Europe.
Really?! Why would any country keep reserves of anything in US? I mean, I’m not questioning it, I’m just surprised.
With the long history of US arbitrarily making decisions about other countries assets (gold or otherwise) and essentially cutting people off at a whim, you’d have to be insane to allow US to custody anything. I’m not being political here - this is not about reasons for doing so.
That’s why I believe digital assets are the future - whether we now think of them as valuable or not.
I don't disagree with you currently, but during WWII era, the "gold thing" was sorta a choice to "trust the Americans to store and return our gold" or "Give it to the Nazis - never to be returned."
Having admitted the issues around the US "today", who WOULD you trust to "store your assets" or accept their currency? China? Russia? India? Brazil?
It probably will come down to the lesser of two (or more) evils.
Most countries, which try to schedule return Gold from USA vaults are trying to do it asap. Also, it is not a news but many Central Banks are increasing purchases of Gold vs the past, when they bought mainly US$ for reserves.
Agree, that the Gold does not go up. We do have Gold Funds what supposedly should cover an investment by Gold, when requested and in reality they return an investment in Gold only on investment amount of over $1mil., the rest of investors (majority) will get only paper Gold - shares or US$ if needed to sell. This allows to keep the Gold price lower. Gold will not appeal to many people as it does not brings dividends or other way of income, however if a major currency will be backed by Gold, it will give the Gold a strong push.Yeah, I think it is wise to enhance a country's gold holdings for stability and also to be able to compete with other countries with large gold holdings. I'm surprised gold hasn't increased in price because of the increased holdings of sovereign countries. I don't keep track if the US has increased (or perhaps decreased) gold holdings. Heh, heh, get rid of some "worthless" green backs for gold - yeah, that makes sense to me.
YMMV
Agree, that the Gold does not go up. We do have Gold Funds what supposedly should cover an investment by Gold, when requested and in reality they return an investment in Gold only on investment amount of over $1mil., the rest of investors (majority) will get only paper Gold - shares or US$ if needed to sell. This allows to keep the Gold price lower. Gold will not appeal to many people as it does not brings dividends or other way of income, however if a major currency will be backed by Gold, it will give the Gold a strong push.
Gold Held by Countries by Investopedia
https://www.investopedia.com/ask/answers/040715/what-countries-have-largest-gold-reserves.asp
[Fun fact] The U.S. continues to safeguard gold belonging to other countries. The Federal Reserve Bank of New York is the custodian of gold owned by foreign governments, foreign central banks, and official international organizations.
Where Is the World's Largest Known Stockpile of Gold?
In the U.S. within a vault at the Federal Reserve Bank of New York. It is known to contain the largest amount of gold in the world.
Which Countries Have the Largest Gold Reserves in the World?
The holders of the largest gold reserves in the world are the U.S. (with 8,133.5 tons), Germany (with 3,359.1 tons), Italy (with 2,451.8 tons), France (with 2,436.5 tons), and Russia (with 2,301.6 tons).
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FYI, there is no limit on repatriating gold stored at the FRBNY. Ft. Knox stores all the U.S. gold reserves. The U.S. does not count gold owned by other countries as an asset.
This was an interesting article off Reuters a few days ago. Note the move by industry to India away from China – both countries have weak pollution laws which favors the bottom lines of corporations:
https://www.reuters.com/business/finance/countries-repatriating-gold-wake-sanctions-against-russia-study-2023-07-10/