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☆ Welcome to the Dollar War: a Global Fight Over America's Economic Dominance
▼ + stars: | 2023-07-16 | by ( Phil Rosen | ) www.businessinsider.com time to read: +17 min

The US even reminded everyone just how influential the buck is when it effectively froze Russia out of the global financial system with sanctions last year. Becoming the issuer of the global reserve currency is about trust. The US has controlled the global reserve currency for 102 years — giving it a special status in the world economy. Still, given that the country controlling the global reserve currency holds that status of an average of 94 years, history seems to indicate it's high time for a successor. Why shouldn't the financial world resemble something closer to the mosaic of cultures, politics, and nations that exists today?

Persons: Chenzi Xu, there's, Xu, —, Ron Temple, Gregory Brew, Eurasia's Brew, dollarizing, Stephen Jen, Jen, we've, Stanford's Xu, Luiz Inácio Lula da Silva, Josh Lipsky, " Lipsky, It's, Alexander Wise, Jan Loeys, Loeys, dollarization, Wise, Lazard's Temple, isn't, Phil Rosen Organizations: Stanford, Federal, European Central Bank, People's Bank of China, Lazard, Publishing, Getty Images, International Monetary Fund, Bank of International Settlements, Eurasia Group, Sandman's, Eurizon, IMF, Atlantic Council, JPMorgan Locations: Russia, Israel, France, China, America, Saudi Arabia, Brazil, India, Pakistan, Bolivia, Iraq, South Africa, Beijing

☆ Russia is egging Southeast Asian countries to ditch the dollar to get around Western sanctions — and it shows just how desperately it wants to save its flagging economy
▼ + stars: | 2023-07-14 | by ( Huileng Tan | ) www.businessinsider.com time to read: +4 min

Russia's foreign minister urged Southeast Asian countries to trade with Russia using local currencies. urged Southeast Asian countries to trade with Russia using local currencies. Even President Vladimir Putin championed the use of local currencies for trade in recent weeks. Russia's trade with Southeast Asia fell 4.4% in 2022 amid sweeping sanctions against Moscow. Russia's trade with the Association of Southeast Asian Nations — a 10-country intergovernmental bloc — fell by 4.4% in 2022 from a year ago.

Persons: Vladimir Putin, it's, Sergey Lavrov, Jeffrey Sonnenfeld, Steven Tian, Phil Rosen, Lavrov, Kompas Organizations: Moscow, Service, Association of Southeast, Yale, Russia, Bank of International Locations: Russia, Southeast Asia, Wall, Silicon, Moscow, Indonesia, Nations, Ukraine, Russian, Indonesian, Europe

☆ The dollar won't be threatened by a multipolar geopolitical order, think tank expert says
▼ + stars: | 2023-07-14 | by ( Filip De Mott | ) www.businessinsider.com time to read: +3 min

Geopolitics won't diminish the dominance of the US dollar, the Atlantic Council's Carla Norrlöf wrote. Though sanctions have discouraged dollar reserves, they also may prompt them to grow. Meanwhile, talk of a rising multi-polar world order are confusing and imprecise. But, what often gets overlooked is that the conditions that prompted these sanctions can also induce a diversification into dollars, Norrlöf wrote. Even if these efforts were enough to crash the dollar's unipolar hold on trade, Norrlöf further points out that there is very little consensus on what would actually follow.

Persons: Carla Norrlöf, Norrlöf's, —, Norrlöf Organizations: Service, Atlantic Council, Project Syndicate Locations: Wall, Silicon, Russia, China, Ukraine

☆ Dedollarization of global FX reserves? Not so fast, Allianz says
▼ + stars: | 2023-07-13 | by ( Joseph Wilkins | ) www.businessinsider.com time to read: +3 min

Recent moves led by China and Russia to challenge the dollar's global dominance has attracted much attention. But Allianz says the greenback's supremacy faces no serious threat, saying "any significant switch will take a long time to evolve". Dollar assets' unmatched liquidity and the private sector's heavy reliance on the greenback will support it over the longer term, according to the German financial services giant. But the greenback's status as the world's reserve currency faces no real threat for the foreseeable future, according to Allianz. The dollar still makes up almost 60% of all global reserves – while China's yuan accounts for just 3%, according to the International Monetary Fund.

Persons: Ludovic Subran, It's Organizations: Allianz, Service, International Monetary Fund Locations: China, Russia, Wall, Silicon, Argentina, Beijing

☆ A top economist warns the US dollar will 'no longer be the dominant world currency' as trade in Chinese yuan rises
▼ + stars: | 2023-07-12 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

"We've got other things happening outside of the dollar world," Paul Greunwald said, per Reuters. The US dollar "will continue to be a leading world currency," Greunwald said, per Reuters. However, "it will no longer be the dominant world currency," he added. "We've got other things happening outside of the dollar world," said Greunwald, citing a growing volume of trade that's being done in the Chinese yuan as an example, per Reuters. Nobel laureate and economist Paul Krugman wrote in an op-ed for the New York Times on Friday that the greenback's dominance won't last forever — "because nothing does."

Persons: We've, Paul Greunwald, chimed, Paul Gruenwald, Greunwald, Nobel, Paul Krugman, Krugman Organizations: Russia, Service, P Global, Reuters, Bank of International, New York Times Locations: Wall, Silicon, London, Russia

☆ Countries are so spooked by de-dollarization and the Western sanctions against Russia, they are increasingly moving gold assets back home for safekeeping
▼ + stars: | 2023-07-10 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

41% of surveyed central banks and sovereign funds expect to increase gold holdings in the next three years. 2 out of 5 cited concerns about their central bank assets being frozen — such as in the case of Russia. Central banks snapped up a record 1,136 metric tons of gold in 2022. But central banks appear to be less willing to keep their physical gold assets in storage overseas, with just under 70% of respondents now keeping the reserves at home. The US dollar has been the world's reserve currency since the Second World War, playing a crucial role in the world's trade and financial system.

Persons: Invesco, we've Organizations: Service, Russia, Gold, West Locations: Russia, Central, Wall, Silicon, Ukraine, London

Several countries, including Venezuela, Argentina and Sudan have been saddled with skyrocketing costs for decades. In advanced economies overall, inflation averaged 2.4% since the 1990s – the earliest aggregate data the IMF has available. In 2022, Venezuelan inflation was still 310%, the highest in the world that year. “Because everything will be more expensive tomorrow, people spend their money as they receive it, increasing the inflation,” Anselmi told CNN. Using US currency for transactions is common in Venezuela, as people don’t trust the volatile local currency, according to Guevara.

Persons: Z, Bolivar, bolivars, Andrés Guevara, bolivar, ”, “, Nelson Sánchez, Sanchez, Emiliano Anselmi, Luis Robayo, ” Anselmi, Guevara, Gaby Oraa, Anselmi Organizations: CNN, Bureau of Labor Statistics, International Monetary Fund, IMF, Federal Reserve, European Union, Pensioners, Andrés Bello Catholic University, Getty, U.S Locations: United States, Venezuela, Argentina, Sudan, Ukraine, United Kingdom, US, Caracas, Buenos Aires, AFP, Venezuelan

☆ It's not just China —India's now pushing a de-dollarization narrative by touting the use of the rupee for trade
▼ + stars: | 2023-07-07 | by ( Huileng Tan | ) www.businessinsider.com time to read: +4 min

India's pushing to internationalize the Indian rupee, according to a report from its central bank. The US dollar has been the world's reserve currency since the Second World War, playing a crucial role in the world's trade and financial system. In its Wednesday report, the RBI working group encouraged the opening of rupee-denominated accounts for non-residents in India and overseas. While the macro geopolitical environment is spurring countries to seek alternative currencies to trade with, there's long been uneasiness over the dollar's outsized dominance in global trade and finance. Just 0.01% of India's trade in goods was settled in the rupee last year, Bloomberg reported on Friday citing people familiar with the matter.

Persons: —, It's, India's, Narendra Modi's Organizations: Service, Reserve Bank of India, Bank of International, Bloomberg Locations: China, Russia, India, Moscow

☆ Opinion | Wonking Out: De-Dollarization Debunked
▼ + stars: | 2023-07-07 | by ( Paul Krugman | ) www.nytimes.com time to read: +1 min

Most of us rarely engage in barter; we sell stuff for dollars, then use those dollars to buy other stuff. Similarly, a large share of international transactions, especially in financial markets, involves payments in dollars rather than in local currencies. How much does this special role matter? I’ve tried elsewhere to debunk some of the myths about the centrality of dollar dominance to U.S. power. In general, one’s belief in the crucial importance of the dollar’s international role tends to be inversely proportional to how much you actually know about the subject.

Persons: moneys, I’ve, Elon Musk, “ weaponizing, Vladimir Putin Organizations: U.S, America, Federal Reserve Locations: America, Saudi

CARACAS, July 6 (Reuters) - Venezuela is planning to introduce new regulations on courier shipments of food, medicine and other products in an effort to raise more taxes, one government and two private sector sources said on Thursday. The government provides no official figures on the volume of such shipments, which arrive by boat and plane. But in a bid to raise tax revenue amid U.S. sanctions and a faltering oil industry, the government is preparing to regulate them, the sources said. Vice President Delcy Rodriguez and other officials met with business people in late June to discuss regulation, but no specific measures came out of the meeting, the two private sector sources said. This week several courier companies, who are generally local outfits, said on social media they would suspend shipments as they await official action.

Persons: Delcy Rodriguez, Mayela Armas, Vivian Sequera, Julia Symmes Cobb, Rosalba O'Brien Organizations: Retailers, Thomson Locations: CARACAS, Venezuela, United States

☆ A defiant Putin renewed calls for countries to trade with Russia using local currencies in his first international appearance after the failed Wagner mutiny
▼ + stars: | 2023-07-05 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

At a trade summit, Putin said 80% of the Russia-China trade is now transacted in the yuan and the ruble. The Russian currency was used in 40% of all export transactions with SCO countries, Putin added. Founded in 2001, SCO member countries include China, Russia, India, Pakistan, Kazakhstan, the Kyrgyz Republic, Tajikistan, Uzbekistan, and Iran. The tough restrictions against Russia spooked other countries so much that they are now lining up backup currencies for trade. Sanctioned countries like Russia and emerging nations like Argentina have recently started using the yuan for trade, primarily with China.

Persons: Vladimir Putin, Putin, —, Wagner, Xi Jinping, Xi Organizations: Service, Russia, Shanghai Cooperation Organization, SCO —, SCO, CGTN Locations: Russia, China, Ukraine, People's Republic of China, India, Pakistan, Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan, Iran, Argentina

☆ Partial de-dollarization is possible, but China won't dethrone the greenback even if it becomes the world's largest economy
▼ + stars: | 2023-06-17 | by ( Phil Rosen | ) www.businessinsider.com time to read: +3 min

JPMorgan strategists said dollar dominance isn't going away anytime soon, regardless of China's growth. Partial de-dollarization in possible as China's yuan becomes a bigger part of global commerce. De-dollarization can stem from sliding faith in the dollar, or developments that enhance the credibility of other currencies. "Historical experience thus suggests that if China were to overtake the US as the world's largest economy around 2030, dollar dominance may persist even into the second half of the 21st century." The bank maintained that China stands as the only competitor eager to supplant the role of the dollar and the US economy in the long-term.

Persons: —, reallocations, Stephen Jen, Eurizon Organizations: Service, JPMorgan, International Monetary Locations: Great Britain, China

☆ A top Russian banker says the dollar's dominance is ending — but China's yuan is gaining prominence
▼ + stars: | 2023-06-15 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

The CEO of Russia's VTB Bank said the US dollar's dominance is ending, but the yuan could be on the rise. His comments come as VTB, Russia's second-largest bank by assets, is discussing settling trade transactions using the yuan with countries outside China. The debate is fanned by fears that Washington is weaponizing the US dollar-denominated global financial system against Russia over the Ukraine war. VTB posted a loss of $7.7 billion in 2022 due to Western sanctions against Russia. But the bank expects to post record profits in 2023 after acquiring a rival Russian bank, Reuters reported in April.

Persons: —, Andrei Kostin, Kostin, Russia's, Washington, VTB Organizations: Russia's VTB Bank, Reuters, Service, US, Russia Locations: Reuters Beijing, China, Russian, Russia, Ukraine, Washington

☆ Treasury Secretary Janet Yellen says to expect a gradual decline in the dollar's share of global reserves, but greenback remains dominant
▼ + stars: | 2023-06-13 | by ( Filip De Mott | ) www.businessinsider.com time to read: +3 min

Treasury Secretary Janet Yellen said to expect a gradual decline in the dollar's share of global reserves. "I would say there is virtually no meaningful workaround for most countries for using the dollar as a reserve currency," Yellen replied. "We should expect over time a gradually increased share of other assets in reserve holdings of countries — a natural desire to diversify," she said. The US dollar's reserve status has seen gradual erosion for two decades, and it saw a steep decline in 2022 even though its strength in international trade remains unchallenged, Eurizon SLJ Asset Management said in April. But US lawmakers aren't helping the dollar's cause, Yellen suggested.

Persons: Janet Yellen, —, Warren Davidson, Yellen, Vicente Gonzalez, aren't Organizations: Service, Financial Services Committee, Rep, US, Management Locations: Ohio, China, Texas, France

☆ China stretched its gold-buying spree into the 7th straight month in May, signaling more central bank de-dollarization
▼ + stars: | 2023-06-07 | by ( Filip De Mott | ) www.businessinsider.com time to read: +2 min

It's not alone in boosting its gold holdings, as central banks shed dollar reserves. The country's central bank purchased 16 tons of the reserve commodity last month, continuing a trend started in November. According to a WGC survey from May, half of central banks expect the dollar's share of reserves to continue sliding, accounting for 40-50% in the next five years. The same survey found that a quarter of central banks intend to add to their gold holdings over the next year. China ended May with $3.18 trillion in foreign currency reserves, compared with April's $3.20 trillion, data from the People's Bank of China showed.

Persons: It's, — Organizations: Service, Bloomberg, Gold, China, People's Bank of China Locations: China, Russia, Ukraine, Singapore

☆ De-dollarization signs are emerging as the greenback slides in currency reserves, JPMorgan says
▼ + stars: | 2023-06-06 | by ( Filip De Mott | ) www.businessinsider.com time to read: +3 min

Signs of de-dollarization are showing in FX and central bank reserves, JPMorgan said. "Some signs of de-dollarization are emerging; this trend is likely to persist but USD should maintain its large footprint for the foreseeable future." "Some signs of de-dollarization are emerging; this trend is likely to persist but USD should maintain its large footprint for the foreseeable future," they said. And the dollar's share of foreign exchange reserves has also dropped. "De-dollarization is evident in FX reserves where USD share has declined to a record as share in exports declined, but is still emerging in commodities," JPMorgan said.

Persons: —, invoicing, Goldman Sachs Organizations: JPMorgan, Service, West, Russia's Locations: Ukraine

☆ 3 reasons why even China doesn't want the yuan to replace the dollar as the world's reserve currency
▼ + stars: | 2023-05-29 | by ( Huileng Tan | ) www.businessinsider.com time to read: +8 min

The Chinese yuan is one of the top contenders challenging the USD's dominance as a reserve currency. However, Beijing may not be fully supportive of making the yuan the reserve currency of choice. Here's why even China isn't that keen on de-dollarizing the world economy and making the yuan the top reserve currency. So, the US will need to contend with ever larger amounts of deficit, in order to maintain its pre-eminent reserve currency position. Given the issues standing in Beijing's way, it's unlikely for the yuan to take over the greenback's position as the world's reserve currency of choice, said Green.

☆ The Dollar Is Still King in Europe, and It’s Swaying Interest Rates
▼ + stars: | 2023-05-28 | by ( Tom Fairless | ) www.wsj.com time to read: 1 min

The dollar has lost little of its global dominance despite some countries’ push to use other currencies. Photo: Kerem Uzel/Bloomberg NewsFRANKFURT—It’s not just Americans watching anxiously to see if the Federal Reserve raises rates or the U.S. slides into recession; so are Europeans, and indeed many other countries. That’s because for all the talk of deglobalization and de-dollarization, the dollar still reigns supreme, and financial and trade ties between the U.S. and key partners are as strong as ever. In Europe’s case, they’re even stronger.

☆ ANALYST VIEW Investors react to tentative US debt ceiling deal
▼ + stars: | 2023-05-28 | by ( ) www.reuters.com time to read: +3 min

Where there were the most distortions from the uncertainty was in the credit markets and in the Treasury bill market... And so, I think Treasury bond yields will stay high for a while that supply is absorbed. "As far as the dollar goes, I'm inclined to think that it could strengthen the dollar a little bit because it will weaken the argument for de-dollarization. But not by much just a little bit more, because the dollar has already strengthened in the last few weeks quite a bit." Or whether those matters are going also going to be resolved with a long-term deal.

☆ Why China and Japan are praying the US won’t default
▼ + stars: | 2023-05-25 | by ( Laura He | ) edition.cnn.com time to read: +8 min

China and Japan are the largest foreign investors in American government debt. China was the largest foreign creditor to the United States for more than a decade. The falling value of Treasuries would lead to a drop in Japan and China’s foreign reserves. “If the United States defaults on its debt, it will not only discredit the United States, but also bring real financial losses to China,” it said. Analysts say Beijing has shown little willingness to fully integrate with global financial markets.

☆ Bill Gates says an under-the-radar startup could be the biggest winner in AI. Check out its free app, and you'll see why.
▼ + stars: | 2023-05-24 | by ( Matt Turner | ) www.businessinsider.com time to read: +6 min

Bill Gates said the winner in AI will be the company that creates a personal digital agent. Gates added that it's 50-50 as to whether the AI winner behind the digital agent will come from Big Tech or the startup world. The startup was founded by LinkedIn cofounder Reid Hoffman, Deepmind cofounder Mustafa Suleyman, and Karén Simonyan, and describes itself as an "AI studio creating a personal AI for everyone." And Pi is still a ways away from what Bill Gates is imagining, a personal AI that can do your shopping and help read your emails. But Pi is the best conversational AI I've used so far, and everyone I've spoken to who has used it has been impressed.

Persons: Bill Gates, Pi, it's, Gates, I'd, I'm, I've, Reid Hoffman, Mustafa Suleyman, Karén, Matt Turner, we've, It's, there's, Spriha Srivistava, that's, Brad Davis, Brad, ChatGPT Organizations: Microsoft, Google, Big Tech, CNBC, LinkedIn, Pi Locations: San Francisco, Instagram

☆ Economists: US can weather ongoing crises, but recession remains on the table
▼ + stars: | 2023-05-22 | by ( Alicia Wallace | ) edition.cnn.com time to read: +3 min

In February, the majority of economists said a downturn could start in the first half of the year; now, that’s shifted to the third quarter or later. There was, however, greater consensus on inflation, the Federal Reserve’s rate-hiking counterattack, banking turmoil and debt ceiling uncertainty. “A majority of panelists believes breaching the debt ceiling will not bring on a global financial crisis unless an impasse persists for several weeks. Most respondents believe de-dollarization is not a threat over the foreseeable future.”More than half (55%) of surveyed economists believe the debt ceiling will be raised, 42% believe the debt ceiling will be suspended, while 3% believe the United States will default on its debts. The economists surveyed expect interest rates to remain elevated through the rest of the year, and nearly half expect that the Fed will start cutting rates in the first quarter of next year.

☆ Russia is seeking allies to shift trade away from the greenback and quicken the pace of de-dollarization, deputy prime minister says
▼ + stars: | 2023-05-22 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +2 min

Russia is seeking partners to quicken the pace of de-dollarization, Russia's deputy prime minister Alexey Overchuk said. The nation could create an independent financial system with Islamic countries. We are talking about processes of de-dollarization and the creation of an independent financial system," Overchuk said at an economic forum on Friday, per a report from Russian news agency Tass. Ties between Russia and Islamic countries also have a "positive future," Overchuk said, given Russia's alignment on issues like energy, food, and de-globalization. The shift away from the US dollar is already beginning to take place, Russia's foreign minister Sergey Lavrov said, though experts have argued de-dollarization fears are largely overblown.

☆ A new class of executives on Wall Street is gaining a ton of power
▼ + stars: | 2023-05-19 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +5 min

I still need questions for a future mailbag. As Wall Street grapples with how to deploy AI, the executives overseeing the tech are rising in prominence. Bianca mapped out the 12 executives leading AI strategy at Bank of America, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley, and Wells Fargo. Meet the 12 executives leading the AI strategy at the biggest US banks. The bank run on Silicon Valley Bank, which was helped along by social media, has bank executives reconsidering their online presence, Reuters reports.

☆ A bright spot in the economy is at risk as 30 million Americans face student loan payments for the first time since the pandemic
▼ + stars: | 2023-05-17 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

More than 43 million Americans together owe $1.6 trillion in student loans. That additional load could weigh on consumer spending, and eventually increase delinquencies on other payments like credit cards and personal loans, strategists said. "We view the resumption of student loan debt payments as an incremental headwind for borrowers and consumer finance companies," BofA said. This, in other words, means the odds of the hotly-anticipated recession are about to go up as consumers divert cash back to student loan payments. Do you have student loans?

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