馃捀 TOWARD DELEVERAGE OF THE US DOLLAR 馃捀
Copyright: Joel Padilla 2023
The US dollar has lost this strength. The rise of China, inflation, high government debt and geopolitical tensions that the war in Ukraine has accelerated have changed the paradigm. Perhaps, the "American Pax" is over and the lack of trust in fiat money has forced to look for alternatives in the long term.
The BRICS have agreed to trade in yuan, China and France has adopted yuan for their gas trade and Saudi Arabia and Iran have entered the Shanghai Cooperation Agreement. The world is annoyed with the US (there are big reasons). In fact, the next big crash and world crisis might be caused by the deleverage of the us dollar as a world reserve currency. Of course, this scenario will be between 5 or 15 years, not now.
In the short and mid-term, the US is strong enough. The clash between China and the US has forced the western supply chain to move and "re-industrialize", something positive for the dollar. Besides, China do not expects being the new reserve coin right now because they have their foreign exchange market intervened and their bond / stock market is not yet developed enough to compete. China is strong, but needs to build more trust.
Meanwhile, the international concert must be prepared for a future based on multi-policy and the balance of power. Nations need new partners and monetary supports, because "it is dangerous to be an enemy of the United States, but often it is fatal to be its friend" (Henrry Kissinger/Farah Diba).
The best analysis is yours!
The BRICS have agreed to trade in yuan, China and France has adopted yuan for their gas trade and Saudi Arabia and Iran have entered the Shanghai Cooperation Agreement. The world is annoyed with the US (there are big reasons). In fact, the next big crash and world crisis might be caused by the deleverage of the us dollar as a world reserve currency. Of course, this scenario will be between 5 or 15 years, not now.
In the short and mid-term, the US is strong enough. The clash between China and the US has forced the western supply chain to move and "re-industrialize", something positive for the dollar. Besides, China do not expects being the new reserve coin right now because they have their foreign exchange market intervened and their bond / stock market is not yet developed enough to compete. China is strong, but needs to build more trust.
Meanwhile, the international concert must be prepared for a future based on multi-policy and the balance of power. Nations need new partners and monetary supports, because "it is dangerous to be an enemy of the United States, but often it is fatal to be its friend" (Henrry Kissinger/Farah Diba).
The best analysis is yours!
Copyright: Joel Padilla 2023
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