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Once upon a time, many scalpers didn't work much in their lives, so what were they doing? How to survive? Speculation in foreign exchange, among which speculating in the US dollar is the most profitable, why? Because the U.S. dollar is a universal currency, the value of the U.S. dollar has long exceeded its face value, and the difference in exchange rates can be used to buy and sell to make a lot of money.
In the first few years of reform and opening up, many foreign-funded enterprises entered China, and many people went to work in foreign countries.
It's hard to see someone holding a stack of dollars to stop passers-by and ask if they need it, why?
Because the dollar is becoming less and less valuable, holding the dollar in your hand is likely to lead to bankruptcy. When the dollar is popular, U.S. stocks and U.S. bonds are fragrant, and when the dollar is finished, U.S. bonds and U.S. stocks have become rats crossing the street.
Some even predict that the dollar will not last for 15 years, that is, after 15 years, the dollar will depreciate significantly and will no longer be a common currency.
After World War II, oil was put to full use, replacing coal as a major fuel. Previously, warships of various countries used boilers as power units, and the boilers needed to use coal.
Since the improvement of petroleum refining technology, gasoline and diesel have become the main power sources.
Coal is used only in power plants and cold regions, and the rise in the status of oil has led to a very extensive trade in oil, and if each country uses different currencies for use trade, it is inconvenient to determine the value of the currency according to the level of economic development of the country, and to convert the currency, and then to be able to complete the trade.
It is possible that because of the extension of time, competitors will win orders, so many countries want to find a common currency, and at this time the dollar is taken seriously.
Because the U.S. economy was very developed at that time, the political situation in the U.S. was relatively stable, and the U.S. dollar would not easily change its currency, so the U.S. dollar became a relatively stable currency, and the security of using the U.S. dollar was improved.
After the status of the dollar has been improved, the United States has made a lot of money by using the exchange rate difference when converting the dollar, the economy of the United States has become more developed, the politics has become more stable, and the status of the dollar has formed a virtuous circle, so which place uses the dollar the most?
In addition to the United States, there are oil-rich regions, such as the Middle East.
How high is the status of the dollar? In order to buy oil and other important materials quickly and in large quantities, some countries reserve a large amount of dollars, which is called foreign exchange reserves, but the large use of dollars also has a disadvantage, that is, once the United States and a certain country turn their faces, the country cannot use dollars.
That is to say, if the country is not allowed to exchange dollars for local currency in the United States, then the country may not be able to buy the goods it wants to buy or sell the goods and not get back the payment, which is economic sanctions. The United States has long understood this, and if it does not deal with any country, it will use this method.
Iran, Venezuela, North Korea, China, and Russia have all been sanctioned by the United States. Some countries have been sanctioned by the United States for a long time, such as Iran, some countries have been sanctioned by the United States for a short period of time, such as China, and some countries have been sanctioned by the United States on a large scale, such as Russia.
The reasons for the United States to sanction other countries are varied.
For example, the so-called human rights problems in other countries are groundless in most cases. The American principle is that those who follow us prosper and those who oppose us perish.
Israel always listens to the United States, so no matter what wrong things Israel does, the United States does not sanction it.
Russia criticizes the actions of the United States at every turn, so Russia is always under US sanctions. Later, Russia had to sell a large number of dollars, US bonds and US stocks, increase the amount of reserves in other currencies, and change the structure of foreign exchange. These actions of Russia are really prescient.
Since the emergence of the Russia-Ukraine conflict, the United States has struck at Russia, which is not only unable to use the dollar, but also has become very difficult to export goods.
If at that time Russia had stored a lot of dollars, then Russia would have lost a lot, because all the dollars turned into waste paper.
China was also prescient. In 2018, the United States launched an economic and trade war against China, China and the United States have the risk of economic decoupling, China began to sell a large number of U.S. bonds, before China held the world's largest U.S. bonds, and now holds almost half of the original reserve level, the United States is very dissatisfied with China's approach, but there is nothing to do.
Because the United States does not stop the economic and trade war, China has to take measures for its own interests. While storing U.S. bonds can earn interest differentials, storing U.S. bonds can lead to a complete collapse of its own economy, and China must do so.
In addition, China is also changing its foreign exchange structure, increasing its reserves in other currencies such as the euro and the pound.
Of course, sometimes many European countries follow the United States and will follow the United States to deal with China, so storing European currency is not an insurance method, and the safest way is to improve the status of the renminbi and promote the use of the renminbi in foreign regions.
In recent years, the status of the renminbi has been continuously improved, and Saudi Arabia, Russia and Turkey all support the direct use of the renminbi for transactions with China, and these countries have more or less contradictions with the United States. The renminbi is now a popular currency, which is also related to the advancement of technology.
Since the widespread use of the Internet, digital currencies have come into play, and China has launched the digital yuan and vigorously promoted it abroad.
In recent years, the U.S. economy has been sluggish, and the U.S. has abused the position of the dollar to exercise its hegemony, resulting in many countries not liking the dollar and beginning to empty it.
With the support of the Belt and Road Initiative, Chinese products are spread all over the world, and Chinese companies have begun to invest abroad. China's position has improved, and China has become the world's second-largest economy.
China pays attention to the principle of mutual benefit and equal transactions, so the credit of the renminbi is relatively good, and in this context, when China launched the digital yuan bridging project, many countries such as Saudi Arabia participated.
The improvement of the status of the renminbi and the digital yuan has led to a further impact on the status of the US dollar. It can be said that the future of international trade will be a scenario of multi-currency common prosperity, rather than the dominance of the US dollar. Countries support each other's local currency transactions.
The economic security of the country was ensured, although it may have been troublesome, to restore it to its original state. If the United States does not change its wrong approach, then the dollar will be on an equal footing with other countries' currencies.
There is one more question that affects the future of the dollar. The elevation of the US dollar is related to the strong demand for oil, but the production and demand for oil will gradually decline, why?
The first is that the earth's oil reserves are limited, and now that oil has been mined for decades, there will not be too much oil that can be dug up.
Now that onshore oil production has been significantly reduced, Middle Eastern countries have begun to prepare for economic transformation, and the extraction of seabed oil is relatively difficult, the cost is relatively high, and the seabed oil reserves are not necessarily too much.
In addition, whether petroleum is converted into chemical raw materials, gasoline or diesel, when burning, it will cause the atmosphere to heat up, and a large amount of exhaust gas will be produced.
It will not only directly threaten people's health, but also destroy the structure of the atmosphere, and the harm is huge, so now solar energy, wind energy, and hydropower have received more attention, and the energy structure has undergone important changes.
These new energy sources are not very tied to the dollar, and when the dollar's status deteriorates, they are likely to be tied to other currencies, in which case the dollar is useless.
To sum up, there are three factors that have led to the decline of the dollar's status, namely, the right time, the right place, and the right people.
What the United States needs to do now is to make the life cycle of the dollar as long as possible, not to expect immortality, and to extend its life cycle, it is necessary to stop using the position of the dollar to promote US hegemony.
In particular, the United States wants to stop its economic and trade war against China. China's renminbi and China's economy are now the most serious impact on the position of the United States, on the one hand, China is promoting the internationalization of the renminbi to get rid of the threat of the dollar, and on the other hand, China's economy is booming, and electric cars are now sold all over the world.
In other words, oil's position has been hit by China's electric vehicles.
On the other hand, the number of nuclear power plants in China is increasing, there are already three nuclear power plants in Liaoning Province, China's wind power generation, solar energy, and power generation are also very developed, China's solar panels have been sold all over the world, and the use of solar energy in the world will be increasing.
China also has a well-developed hydropower industry and has the ability to help other countries build hydropower plants, so to speak, China has the ability to promote clean energy around the world.
The harder the U.S. hits China, the more baskets China needs to put its eggs in, the more it needs to take root around the world, and then the dollar will no longer be needed everywhere.
Does the U.S. recognize that the speed of China's progress depends on the degree of U.S. repression? The economic and trade war with China has been going on for five or six years, and the United States has not received any benefits, but has caused the price index to rise all the time, and the currency is depreciating.
The harm of raising interest rates all the time is very serious, which will lead to more countries selling US bonds, and US allies such as Japan, Britain and Canada have already begun to sell US bonds, and the United States has not yet understood?
U.S. debt has always been an important source of income for the United States, as have American chips, American Boeing planes, and American arms.
Now the only products that can generate income for the United States are arms, and no war will be fought for 100 years, and the war will always stop, stop, then the arms will not be sold, and there will be no income, and what will the United States rely on to make money at that time?
Now the Russia-Ukraine conflict has become a cash cow for the United States, but Russia and Ukraine are now very tired of fighting, and they have both released their willingness to negotiate, but the conditions for negotiation are contradictory. In other words, the Russia-Ukraine conflict will not be able to generate profits for American arms dealers for too long, and the United States must act now.
What do you think about the death blow to the dollar? Welcome to discuss in the comment area!
Information sources:
Finance Associated Press: "The end of the petrodollar deal" swiped the circle of friends! What is the truth?