Comment by pas
2 years ago
the dollar as the reserve currency already has a serious impact on the US (ie. the big upside is that it allows the US to borrow for very cheap, but the nasty downside is keeping the purchasing power of the USD artificially high, which is not great for the non-finance sectors of the US, not great for people who work in those sectors, and double-plus-not-great for US exports [which are not the dollar itself]), basically it's the "natural resource curse" again
that said, dedollarization is unlikely even in the mid-term https://www.noahpinion.blog/p/threats-to-the-dollar-are-just...
A weak dollar is good if you own a company that relies on exports. For the rest of us who are paid in dollars and need to buy imports, a weaker dollar hurts.
That is one opinion. We can already see China and Japan selling off their US bonds and the BRICS countries are working on solutions to get off the dollar with high priority.
> A weak dollar is good if you own a company that relies on exports.
It depends on your exports. If your exports have cheaper alternatives, then a weak dollar is good.
If your exports are high utility and have no cheaper alternative, then a strong dollar is better.
Have you read the article? :)
Maybe this one will be more interesting https://www.noahpinion.blog/p/brics-is-fake
They were long reads, but thank you. They generally cover history and speculation on BRICS, but we will need to see how it works out. I have seen their meetings and open statements about intent to diversify away from the dollar for trade as a high priority. The articles don't really explain what happens if/when they do figure out international payment systems that avoid dollars. Think of this: You have a trillion dollars you printed floating around the planet. It didn't cost you much to print them, but you did get goods and services for them. If that trillion is halved to $500B, what happens?
3 replies →