Reply to Does anyone else believe the impending financial crash will be bigger than 2008-2009?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]My concerns is BRICS and loss of reserve currency status.[/quote]

That ship has sailed -- it was a forgone conclusion when the USA froze Russia's sovereign reserve of dollars back in February 2022. No sane nation will hold a "reserve" that can be frozen at any time at the whim of whomever is in the White House.[/quote]

Pretty easily actually- don't send hundreds of thousands of troops to invade another country, and your money won't be frozen. Funny how simple it is![/quote]

Iraq War, anyone? Libya? Syria?

It's easy to spout off flippant remarks like that, but no sovereign nation will hold a "reserve" that can be frozen when *your* nation's actions (be they invading another country or something else) can serve as the predicate for another nation (i.e., the USA) freezing your access to your reserve funds. Of course, it's just egregiously funny that the USA has gone around invading other nations for decades.

In any case, ultimately it only hurt the USA that we did that. Now the de-dollarization of the world is inevitable and the U.S. dollar will inevitably lose its status as the world's reserve currency in the coming years.

What will that mean for us? A much weaker dollar and much higher prices for anything we import (which is almost everything). There may be some silver linings, such as increased domestic manufacturing and reduction in government spending that comes along with loss of a money printer that prints the global reserve currency, but it will be a bumpy ride.[/quote]

Huh didn't know we had any Administration/Russian assets posting here, good to know.  If this was the case, why didn't the dollar weaken significantly in 2022?  Why only now?[/quote]

Whatever -- that's all you Russophobes ever say. Anyone raising logical points you can't counter is just slandered as a Russian asset. I'm an American -- I just know how stupid it was for the USA to freeze Russian assets in 2022 and what it means for the dollar. In all the years of the Cold War against our mortal enemy the Soviet Union, the USA never froze Soviet dollar reserves. It was stupidity of the first order to have done so with Russia's assets in 2022.

Stick your head in the sand if you will; the market doesn't care. The dollar is going down in value and due to the rise of BRICS (accelerated both by destroying the dollar's status as reserve currency as we did in 2022 and now by the short-sighted tariffs against India and others for buying Russian oil) a new economic era is dawning.

People should consider how inflated the U.S. stock market and other U.S.-linked assets are (including real estate) and how that is likely to change due to the relative decline of the USA and the rise of BRICS. [/quote]

Okay not a Russian asset, whatever.  Same question- [b]if the turning point for the USD as reserve currency was 2022, why did it take 3 years for the dollar to weaken? [/b]Why did the weakening just happen to correlate almost to the day with the huge new tariffs in April 2025?

https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/eurofxref-graph-usd.en.html

I do agree with you that BRICS and others are going to move on from the US as their biggest market and reserve currency, etc.  But solely because of political instability here.[/quote]

Because the decades long history of the U.S. dollar as the world's reserve currency was not going to change overnight. It's all based on how much dollar reserves other nations want to hold, and they couldn't "dump their dollars" all at once. BRICS (which comprises the majority of the world's population) is slowly but surely weaning themselves off of U.S. dollar reserves; China has been buying huge quantities of gold, for example.

The recent sanctions against India -- ironically also tied to the U.S. involvement in the Ukraine-Russia conflict -- seems to have pushed India over the edge and into the arms of BRICS as well.

Probably makes sense to increase your portfolio holdings of foreign stocks and other stores of value, such as gold, bitcoin, and other commodities. [/quote]

[b]It's weird because I agree with your conclusions but the reasons seem made up.[/b]  The issues with China and others slowly moving away from the US have been happening for a while now and have been accelerated by tariffs, etc.  I see no reason why freezing Russian cash had a significant impact.  So yes, I agree that this is all very bad for the US and will make us more subject to interest rate volatility, weaker economy, etc.  But some sort of magical link to freezing Russian cash?  No idea what evidence you have of that, other than RT broadcasts.[/quote]

I didn't make it up - I've read it in numerous places; it's been widely discussed since 2022 when the U.S. took this step. For example, here's an article from 2024: https://www.forbes.com/sites/bobhaber/2024/08/21/americas-currency-crisis-declining-global-confidence-in-the-dollar/

"The U.S. response to Russia's invasion of Ukraine, particularly the freezing of Russian assets, has amplified global concerns about the risks of over-reliance on the U.S. dollar. For many nations, this action underscored the immense power the U.S. holds over the international financial system. In response, the BRICS+ group—comprising Brazil, Russia, India, China, South Africa, Iran, and others—has become a formidable force, rapidly accelerating efforts to reduce their dependency on the dollar."

There are other reasons, as I mentioned -- including decades long U.S. deficit spending (under both Republicans and Democrats) that seemingly has no end, as well an nations aggrieved by tariffs (in particular, India, which we've just slapped tariffs on again due to the Ukraine-Russia conflict) -- but without a doubt the weaponization of the U.S. dollar makes it incompatible with being a world "reserve" currency in the eyes of many.

For example, for years now we've been hearing from the U.S. military and government about the impending threat of China etc. If you were in China's shoes, would you want your "reserves" to be held in U.S. dollars, where they could be frozen if you did something (invade Tibet? invade Taiwan?) that the U.S. didn't like?

We can't have it both ways -- and we won't be able to. 
[/quote]

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