this post was submitted on 24 Jul 2023
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"Countries" - Russia, China, India
Yes they're worried about weaponization of the dollar, and they should be, but they aren't going to succeed long term trying to avoid it.
Russia is just straight fucked at this point. It's economy hasn't been great for ages, and this war is just going to leave them living as an amputee afterwards. It's the same size as a Canada economically at this point...
China is on the edge of a major economic decline. In the last couple of years the last of their population boom just entered the workforce, and now there are significantly more people aging out of the workforce than joining it (and it will be that way for at least 20 years even if they managed to turn their birth rates around today. The results of their one-child policy coming home to roost. They're trying to strike while their iron is hot right now. This is all on top of the fact that their large population is becoming less and less relevant economically due to technology.
India is simply too far behind, it's barely 1.5x the GDP of Canada at only 3 trillion, despite having 35 times the population.
https://www.bloomberg.com/news/articles/2023-07-17/india-indonesia-plan-local-currency-trade-fast-payments-links https://ca.sports.yahoo.com/news/india-ties-uae-settle-trade-114534898.html https://archive.is/K279M https://www.al-monitor.com/originals/2022/07/iran-says-us-dollar-officially-ditched-trade-ally-russia https://www.reuters.com/world/americas/what-brazil-argentinas-currency-union-really-means-2023-01-23/ https://en.mercopress.com/2023/07/04/argentina-insists-on-local-currency-agreements-within-mercosur https://www.tbsnews.net/bangladesh/bangladesh-diversifies-trade-currency-transactions-begin-rupee-663326
Indonesia, UAE, Argentina, Brazil, Iran, Bangladesh, Sri Lanka, etc. While these countries are not actively 100% ditching the dollar right now the simple fact that they are starting to use alternatives speaks of a trend. And we still need to wait for the BRICS to release their plans on their currency, after which the process will accelerate more. It is not only 3 countries, and it is, in my opinion, not so important how much economic power they have, but rather that the strength of the dollar lies in its universal use.
People have been saying this for over a decade. It hasn't happened. Heck, Gordon Chang's entire career is based off writing a "China is about to collapse" book every couple years. If anything, their economic position has continued to strengthen.
2023 is literally the first year that China's population is expected to actually decrease. While this won't immediately collapse the economy or similar it's very difficult to continue economic growth while they're projected to be losing around 600 million people over the next 80 years. The industries they're known for all require cheap labour, which is not something that happens in a tight labour market.
They're going to have to focus on transitioning into higher value industries, but the level of education simply isn't there to do this successfully. Only 8% of working age Chinese people have a bachelors degree, and less than 1% have a Masters or Doctorate. As of 2023, more than 50% of working age Americans have a college degree, and 12% have a masters or better.
https://www.macrotrends.net/countries/CHN/china/population