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With the advent of Trump (who is not liked internationally) and the renewal of the Reserve Currency coming up in 2020, will the world choose another reserve currency? The USA has held the reserve currency (the currency against which all other currencies are measured) for more than half a century. However the financial fiasco of 2008 has led to questioning of American financial responsibility. There is talk of China taking over.
In addition, South East Asia is now increasingly using the Chinese Rennmbi (RMB) to buy goods with China and the rest of South East Asia. They used to use the US Dollar.
Together with the new Silk Road (the bullet trains that China has built right across Europe to enable delivering her goods), it is not a distant possiblity that the Chinese currency will replace the American ccurrency.
Here is one of the many articles that are currently written about it.
http://carnegieendowment.org/2017/01/11 … -pub-67671
While the dollar may well hold on to its Reserve Currency status, the questions is: What will happen to the USA if it doesn't?
No, multinational corporations rule the world, so there is zero chance that the petro-dollar will be replaced in the near future.
I'm not sure I follow your reasoning. Multi-national corporations are not only American. Petro dollars are going out of fashion. The World Economi Forum has just put climate change as its main agenda beause their profits are now being damaged through climate change. So they are switching investments.
Also, some countries are now beginning to do without petrol at all, and the cost of energy will reach zero within the next decade. So countries running on petrol will become unprofitable because they will still be paying for gas while other countries aren't.
So what am I missing?
The petro-dollar does not go out of fashion until petrol goes out of fashion. I'd prefer that be sooner than later, but so long as they remain among the most profitable industries in the history of the world, and are allowed to exert their influence over governments the world over...
I have to read between the lines here. You're saying that the dollar won't lose the reserve currency because different countries are using it to buy petrol?
Firstly, the reserve currency has nothing to do with buying petrol. It is the currency that is selected to measure all other currencies in order to establish foreign exchange. And while petrol is an enormous industry, it is far from the the only thing that is bought and sold on this planet. Added to that an increasing number of countries are apprroaching a point where somewhere between half and all of their energy is derived from sustainable energy. Sustainable energy is now cheaper than petro energy (outside the USA).
The majority of items on the agenda at the World Economic Forum (currently at Davos) are about climate change, the damage floods, etc. are doing to business, and switching of portfolios into other more sustainable investments.
China is investing $360 billion in sustainable energy by 2020.
Even Saudi Arabia has seen the writing on the wall and is spending nearly $50 billion on renewable energy.
So while I understand what you are saying, I don't think that petrol is going to ensure that America keeps the dollar as the reserve currency. There may be other reasons, but I don't think that one qualifies.
If and when the economy of the U.S. and the world in general is "replaced " it will be a distant and slow metamorphosis , One must consider how much of the worlds economies , manufacturing , internal economics ,futures trading ,energies and international economic organizations are directly connected to the U.S. dollars huge U.S. consumerism , How much ALL international economics is directly connected to the incredible power of the dollar AND the Brexit and the E.U. is but one indicator of the power of the dollar and the weakness of other not only entire national but international economies as well .
Not that more economic isolation might not be a bad thing for the US dollar , In many peoples opinion , but the complexity of the worlds interwoven dependency on the dollar or whatever source of economic measure dictates that even the very idea of change is a distant and extremely complicated proposition .
China's very internal and wholly regional economy for instance , is far too dependent on manufacturing alone for it's "economic vibrancy" for one and Its prehistoric and paranoid political isolation for two , and its dependency on exported consumerism for three ,to be any threat to the power of the dollar , at least for decades to come.
The only threat to the U.S. dollar driven international economy will be from some possible international group of the fairly distant future . The E.U. was the only likely chance . Not likely to be repeated anytime soon.
If the currency status changes it will not because of who is president. The currency is used in other nation because it holds a stable value. Even if Trump went full Caligula that is unlikely to change.
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They want to propose this at the United Nations per the Drudge Report
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