The idea that a basket of foreign currencies or "BRIC+" will replace the dollar is absolutely not going to happen. If the dollar goes down it takes the entire world with it. Nobody is insulated from the risk of a dedollarization.
Have you heard of the Portuguese real? Or the Spanish real? Maybe the Dutch guilder? They were all global reserve currencies in the past.
If you haven’t heard of them, don’t worry, someday, people will ask “Do you know the United States dollar?”
So, whoever has significant wealth will do exactly this and take out loans to purchase productive assets and then, later on, pay back much less because the dollar lost value in the mean time.
This works out as long as the interest rate is lower then the actual annual loss in purchasing power.
So what we’ll end up with is a post-WW2 supply chain but in a world where every currency dynamically floats, even the dollar. It’ll be a decade of price shocks, trade wars, and likely conflict as everyone vies to define the next era of economic power, until a smattering of core currencies (likely the Yuan, Euro, and Dollar) emerge on top for each respective region.
That’s my armchair theorycrafting, anyway.
Russia is a non starter, and China is unlikely to make the political change necessary to be a reserve currency.
out of curiosity, why do you believe that?
Unless they're paying Russia for energy, they're buying oil and LNG in dollars.
Africa's GDP is tiny and will not a serious contender for any sort of reserve currency status for many decades. I can't imagine a wave of automation will do anything positive for most of Africa.
Sibling comment mentions Europe needs the US for energy; Canada has known fossil gas reserves of ~200 years and LNG export capabilities, and Europe is scheduled to end Russian fossil gas consumption in 2027 [2]. The world is deploying 1GW of solar every 15 hours; like the rest of the world, everyone will arrive at energy independence/sovereignty eventually through cheap renewables (solar primarily, but also wind) and battery storage (LFP and sodium most likely, as of this comment) exported by China to the world. China is also selling inexpensive EVs to as many global consumers as they can find (while internal sales of battery electric and hybrids is already at ~50% this year). This leads me to believe the future of US oil and gas is an internal petrostate similar to Russia, not an energy exporter of relevance far into the future.
[1] https://www.sas.upenn.edu/~jesusfv/Slides_London.pdf
[2] https://news.ycombinator.com/item?id=43506589
(not investing advice)
It's hard to take your point of view seriously after that honestly.
https://direct.mit.edu/opmi/article/doi/10.1162/opmi_a_00160...
https://www.psychologytoday.com/us/blog/the-digital-self/202...
From the piece (which I agree with):
> As someone that has sold a bunch of LLM enabled software over the past 6 months, I don’t really buy the AI capex turning into huge productivity gains. Everything to date are just chatbots with RAG and API calls. None of them are going to do my laundry or file my taxes.
Low-value-add marketing copy, for example, being automated changes... what? Now LLM-generated copy is the new minimal-cost baseline, and everyone adapts to the new normal.
The real killer feature will be autonomous business planning, but we're a long way from there.
They also need to import phones, dishwashers, and cars. But how many cars do you really use? How many phones?
Africa's population growth is projected to drive steady demand for consumer products, while the West and parts of Asia are expected to see a decline. They have abundant natural resources, and they’re likely to become the cheapest labor force after countries like Vietnam and Thailand see rising wages and living standards.
We’re already seeing this in China, where wage growth is pushing some manufacturing to neighboring, lower cost countries.
Demand is ultimately limited by the number of people. You can produce as many goods as you want using AI powered factories but without demand, they’ll just end up in the garbage.
NATO funding, drug R&D and subsidized pricing, even sovereign wealth funds are invested in the USA. Their only energy option outside of the USA is Russia.
Postwar Europe as we know it does not exist without the USA.
Not sure I’d agree. Eurozone debt to gdp is around 90 while us is above 120
Specific countries are in trouble (France and Greece mainly) but overall position is somewhat respectable
No it'll be renminbi, with the euro, if they are lucky as a distant second place.
China is an exporting and manufacturing powerhouse. Something that is only accelerating. Don't get me wrong, china has a whole bunch of issues. but currently political instability kneecaping economic growth is not one of them.
Also China knows that unemployment means the end of their control. So they will do anything and everything to keep people gainfully employed. the USA less so, and we'll see if that works out for them.
Russia has a tiny economy based on war and oil.
Also Switzerland is easy to bully, as can be seen by the current US tariff regime.
That is kind of a first step. You know, actually being able to convert from one currency to another.
This has happened before. GFC 2008 comes to mind.