🌍 2023 marks the beginning of the end of dollar reserve dominance

“it could be that the US dollar coming out of 2023 starts to trade more like a risk asset and less like a risk-free asset. ... maybe this year marks the beginning of the end of the US dollar as the kind of global de facto reserve currency based on some of these big trades”

“I take the exact opposite of your contrarian belief. I believe American exceptionalism continues to soar, as Russia, China, Saudi Arabia, ... are going to stab each other in the back before they change the world or move the currency.”

“would love to get off of the dollar ... But I don't think they're anywhere close to be able to do that yet.”

“But the other part of it is, like, does it reinforce or does it decay US dollar hegemony? And I think it actually reinforces it. And the reason is just very practically speaking, when you look at how dependent other people, other countries are on the US dollar in times of stress, they actually become more dependent.”

“When Dalio's points of view, with lots of kind of empirical wisdom behind it, I think, indicate that the US is on a path, and the way we spend, and the way we behave, and the way markets are reacting, I think, indicates that a lot of what has happened historically is happening now in the US.”

“the more we kind of as the US think we want to de-globalize and reduce our trade relationships with other nations, the more, you know, we're out of the way in allowing China to do that. I think it's worth observing that the Chinese economy will grow, the depth of the relationships will grow, potentially the strength and importance of their currency will continue to mount as they build these really deep infrastructure and investment tie-ins around the world.”

“Nothing. This whole thing is a huge nothing burger. This is the third deal that China has done. The other two countries are Pakistan and Brazil.”

“I think de-dollarization hasn't happened yet, but I think it's a risk, and I think there's a bunch of reasons why the risk is growing.”

“I do think there's a group of catastrophists who maybe are hoping this happens or it's a great Twitter fodder.”

“The more I think about it, the more I think it's probably not a coincidence that you're seeing all these concerns about de-dollarization at the same time they're cracking down on crypto.”

“We are the reserve currency of the world. It's not changing anytime soon. It's not even close.”

“So you're going to look to diversify. You're going to look to put your money in gold. You're going to look to put your money in other currencies.”

“The share of Yuan transactions briefly rose above 3% in 2022 That was the peak and it's now off 26%, down to about 2.2%. So actually the share of Yuan transactions has actually been shrinking in the last year.”

“And fundamentally, I don't think that there's as safe a haven as there has been historically. And as a result, I think a lot of these governments and a lot of the business leaders in these countries are very much open to doing transactions in multiple currencies. And that's the beginning of the end.”

“I disagree. I think there will be, will remain the global reserve for our lifetime.”

“The BRICS countries are about to introduce an alternative currency that's based on gold.”

“That means as we're trying to sell more Treasuries, foreign governments are buying fewer of them, which means that the US currency as a reserve is no longer the place that everyone wants to plow their money as much as it used to be. It is in decline.”

“Do you all of a sudden double down on the euro? Do you double down on the yuan, which is basically a proxy for doubling down on the US dollar? What are you supposed to do? And I never get a good answer because on a relative basis, the US will still continue to do well.”

“If Brics adds Venezuela, Algeria and Kazakhstan, as they may do as soon as next year, they'll control 90% of all oil and gas traded globally. ... The other big thing that I think Brics is doing is they have this five to ten-year goal of allowing Brics members to settle trades in local currencies. ... The goal here is not to create a new reserve currency. It's simply to create a way to bypass the dollar complex. They're trying to break the petrodollar monopoly.”

“I think the fact pattern in that organization is pretty poor. ... That bank has not disbursed a single dollar in 23 years. They tried to create a joint program to lay undersea fiber amongst these countries, hasn't even started. ... I think the problem is that the actual amount of legislative coordination that these countries has been able to exhibit has been literally zero. ... And if you look at Swift in July, the Swift volumes on US dollars was the largest ever.”

“What I think is most important is the signal that's being given, which is that there is a desire by a larger percentage of global GDP than is represented by the G7 to de-dollarize. And so while these intentions may be difficult to translate into policy in the near term, that signal says a lot about the influence and perhaps the policy of the US in addressing and dealing with a lot of these countries and global economic actors.”

“But they should make their own euro. If they feel so strongly that they're a great voting bloc, make a euro. And then they could all put into it. And you can see what happens when a bunch of dictators and a long tail of failed states now share a common currency. It's not going to work.”