Carney Calls for Replacement of Dollar … (Death of the Dollar–14) with Link to Full Story

avatar


The current regime is dysfunctional and beset by various deficiencies.

Financial Times –
"Carney calls for global monetary system to replace US$" 

(Right-click title to see original story)
(Image source)

– Flash Points –

1 – The world cannot continue to rely on the US dollar.
2 – The all-powerful dollar is problematic for the global economy.
3 – The IMF could establish a multipolar global monetary system.

– Synopsis –

At this year’s Jackson Hole Economic Symposium, Bank of England governor Mark Carney stated that the world can no longer rely on the US dollar as the reserve currency.  

Lack of Balance

The global economy has changed radically since 1971, which marked the end of the Bretton Woods system. Nevertheless, the US dollar remains the global reserve currency.

A major part of the problem is that, while US trade accounts for only 10% of global trade, much of the other 90% of global trade is conducted in US dollars. A similar imbalance is reflected in the percentages of financial transactions.   (Image source)

Dysfunctional, Deficient ... and Disturbing 

Under the current system, other countries essentially must hold US dollars. Consequently, they are subject to the undue influence of any fluctuations in the US dollar.   

As Carney notes, the current regime is “dysfunctional”  and beset by various “deficiencies.”  As an alternative, he suggested that the current scheme be replaced by one based on a basket of global currencies. That could be achieved by creating an international digital currency.

– Insight from Outside –

The current US$-centric monetary system, in which other countries are compelled to rely on the US dollar, puts those countries at a clear and severe disadvantage.    

As Valéry Giscard d'Estaing said back in the 1960s, the fact that the US dollar is used as the world’s global reserve currency gives the US an “exorbitant privilege.”  The corollary is that all other nations are “exorbitantly underprivileged.”  Such a deficient system cannot be maintained much longer.   (Image source)

Lack of Trust

Moreover, on a recent Keiser Report, writer Dominic Frisby acknowledged that the current US$-based system is problematic. He also declared that he does “not trust Mark Carney.”  He added that “Bitcoin is the way,”  and that we need to “keep the government out of our monetary system.”

Indeed, it’s high time for a decentralized monetary system.


Posted via Steemleo | A Decentralized Community for Investors



0
0
0.000
9 comments
avatar

Hi @majes.tytyty

I think that this approach to getting the dollar out of the play is not complex at all.

However, the countries among themselves are the ones that really must agree in order for that to happen.

Meanwhile, we must push the cryptocurrencies to replace the dollar.

but then another problem is also born that I have raised, I have always said that cryptos and the dollar are Siamese.

And for the following reason, every time you want to trade a crypto the price or value is set in dollars.

See my point ..

0
0
0.000
avatar

Good points. Getting rid of the dollar might not be "complex," but since the dollar is so pervasive, it will take time ... plenty of time.

But some countries are already abandoning the dollar. And that process will accelerate.

As for cryptos, I believe there are plenty of exchanges around the world where people can exchange cryptos for their own currencies, not only the USD. It will be become increasingly easy for us to exchange cryptos into fiat currencies, and we'll probably still use fiat currencies for many transactions.

But to be sure, one thing that has happened over the past decade is that cryptos have appreciated greatly, relative to fiat money. And that will continue. Within a year or 2, it's very possible that 1 Bitcoin will be worth $100,000 or more. Probably more.

0
0
0.000
avatar

And for the following reason, every time you want to trade a crypto the price or value is set in dollars.

It is as simple as a frame of reference. It does not mean that it is imperative or dominant. Although to a large extent it is.

To put it in perspective:
Everyone in the whole world knows and says that we are in the year 2020. This is counted from the birth of Christ, who is the exalted figure of Christianity.
However all other religions must assume that we are in 2020 AD.

It is only a reference point.

0
0
0.000
avatar

There was the day when an ounce of gold cost usd 20.67. Today that same ounce of gold costs USD 1500.

Then we could declare that this is a great asset, but the real fact is that it has been the American dollar that has been devalued.

This process has not taken just over 70 years. It has been a devaluation of 7500%.

With the applicability of the MMT and the constantly increasing internal indebtedness, the evolution of debt bonds, 2020 is emerging as the year of economic collapse.

So in many ways Bitcoin has come to replace not only the American dollar, but the traditional gold.

The day that the implementation of a universal currency will be necessary will arrive. And it does not mean that nations lose their monetary identity, it is not so. It's about survival.

Then it will be bitcoin that represents the first option.

0
0
0.000
avatar

True, bitcoin will surge in price. But I believe gold will also retain a strong position.

And you're correct about the relative valuations. It's not so much that gold or cryptos are rising in price – the fact is that fiat currencies are plummeting in price. That alone is enough to send precious metals prices and crypto prices to the moon.

0
0
0.000
avatar

I wonder what will happen when we only use crypto?
How will prices be established?
How will we know which currency is stronger when the comparison parameters no longer involve Fiat?

0
0
0.000
avatar

I assume the old "supply and demand" function will take care of most of the price-setting.

Whatever happens, it'll be a lot better than the manipulative systems that set the price for fiat currencies and precious metals.

0
0
0.000
avatar

At least it will take time to corrupt this new system.
Humans are experts in corruption. We literally corrupt the incorruptible.

Is collusion possible in BTC? Once I read that a large percentage of the entire BTC in circulation is deposited in about 1K accounts.
This could be enough to give a substantial turn to any market.

0
0
0.000
avatar

Sure, collusion is possible, but BTC can never be subject to the outright and blatant control and manipulation that fiat currencies are subject to.

Fiat currencies are centralized, BTC is decentralized. That difference alone should make people flee from fiat money.

0
0
0.000