From my reading and YouTubing it would seem that the question on the mind's of the Russians and others who resent the dollar's hegemony as a reserve currency is this:
How destabilizing would it be to accept payment in another currency for our oil (Saudis), gas (Russia), or other heavily traded good?
The Chinese stopped accumulating Treasuries a year ago but along with the Japanese still own a bundle, and would like for the purchasing power of those securities not to fall while they're buying up real assets (land, capaital goods) in places like Africa.
My entirely subjective estimate is that if the Russians started asking for gold or Euros for their gas that the dollar would swoon but not collapse. As Yves pointed out the other day, that would technically speaking increase the desirability of our export goods, while dosing those of us stateside with some cost push inflation on our imported goods (oil, i.e., gasoline for most of us and other goods).
Meanwhile the Chinese are letting their yuan swoon a bit within a wider trading band, indicating that they are still in the race to the bottom as far as currency devaluation goes. The Russians are reported to be fighting the decline of the ruble by raising gas prices.
I keep hearing about the currency reset, how the feds will split off an international ("scheiss") dollar that will be about a third less valuable than the current dollar. I really don't know how you do this except through forex market interventions to debase the dollar by flooding the market with them. Could happen by dint of others' interventions as well. But as I say, not everyone abroad wants to see the dollar collapse.
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