US media CNBC reported on December 14th local time, the US Treasury Secretary Nouchine said, "let me be clear: We are not weaponry US dollars. "People use the US dollar as the reserve currency of the world, and the dollar is quite strong. "The US dollar is strong because the US economy and people want to have the security of the US dollar and the US dollar. Therefore, we attach great importance to sanctions - in fact, I have personally signed every sanction we have implemented. "
The analysis shows that the latest progress of the US Treasury Secretary on the US dollar debate is inconsistent and consistent with the phenomenon presented by the US dollar. The paradox is that in the past few decades, an important tool for the operation of the US economy is the US dollar. With the special position of the US dollar as the global reserve currency, the US economy has gained almost a lot of valuable material wealth. For example, the Fed's tightness of different cycles has almost brought the US market to an advantage over money.
On the other hand, the US economy has initiated financial restrictions on some global markets by virtue of the US dollar. For example, the restrictions on Iran's oil economy in the past few months have been aimed at reducing Iran's crude oil exports and even Iran's crude oil exports to 0. Not only that, CNBC reports, according to the US Treasury Department, 6300 specially designated individuals and more than 20 countries have been restricted by the US dollar.
It is worth noting that the foreign media reported that "we have the right to impose restrictions on those who use the US dollar". For a long time, if we are not careful, people will consider using other currencies. "This further illustrates that the US dollar has been very concerned about the decline in the use of the US dollar in the process of implementing financial restrictions on some economies. However, such a vision did happen.
Although the US dollar is still the global reserve currency, the dollar's share of global foreign exchange reserves dropped from 73% in 2001 to 62% at the end of 2018, according to IMF data. Moreover, more and more monetary authorities in the world are starting to go to the dollarization process in their own way. The observer group of BWC observed that at present, China, Russia, Germany, France, Italy, the United Kingdom, Japan, Indonesia, Malaysia, Thailand, Iran, Angola, Venezuela, Iraq, Kuwait, Nigeria, Pakistan, Kazakhstan, Belarus, Belarus, Belarus, Kazakhstan, Belarus, Qatar, United Arab Emirates, Vietnam, Hungary, China, South Africa, Greece, West China, Ireland, Portugal, Sweden and other 35 countries have begun to dollarization in one or more ways.
For example, to say no to the oil dollar, some oil countries are developing oil money other than the US dollar. A wide range of currency swap agreements were signed between different monetary authorities and traded directly in local currencies. Increase non US dollar currency reserves; Abandon the anchor dollar; Increase the layout of physical gold reserves to hedge against US dollar risk; Substantial reduction of US dollar debt and other core assets; Developing sovereign encryption currencies to bypass the US dollar dominated SWIFT payment system and so on.
Let's take the oil country of Iran as an example. A few months ago, Iran formally announced that the renminbi and the euro should be listed as the main foreign exchange currencies to replace the US dollar status. According to Russian media reports a few weeks ago, France, Germany and the United Kingdom to establish more trade in Iran's crude oil support trade tool INSTEX, has completed the first transaction. That is to say, while Iran's economy is going to dollarization, many European countries are also related to the dollarization activities. It is noteworthy that 80% of the energy imports in Europe were settled in US dollars, and Jean Claude Juncker, the former chairman of the European Commission, called this phenomenon "ridiculous" in 2018.
In addition, the governor of the Bank of England Mark Carney said a few weeks ago that I think we may eventually have reserve currencies other than US dollars. The evolution of the global financial system is lagging behind the global economy, and the concentration of financial assets in developed economies is asymmetric. The share of emerging market economies in global activities is now 60%, but its share in global financial assets is lagging behind about 1/3. At present, half of international trade is denominated in US dollars, but with the change of economy and trade, the disconnection between reality and finance may decrease, and other reserve currencies may appear in this process. First of all, I predict that these will be the existing currencies, such as the renminbi. Crude oil futures offered a new choice around the US dollar.
Not only that, the Nikkei Asia review reported a few weeks ago that Asia should transfer large quantities of oil trade to the renminbi and yen, and better use yuan and yen to trade oil. The Russian satellite news agency recently reported that the annual forecast report released by the famous European bank analysts predicted that Asia might create a new reserve currency, and the new currency will begin to squeeze the US dollar out of regional trade. Russia, OPEC and non OPEC oil exporters will join in the transition to new currencies. This could make the United States lose the capital inflow needed to finance trade deficits and budget deficits. Analysts believe that this is also a large amount of capital or will flow out of the United States a major expectation.
It is worth mentioning that China and Japan, as the top two overseas holders of US debt, have also substantially reduced US debt. In September, for example, Japan issued a sharp sell-off of US $28 billion 900 million in US debt in September this year, and currently has about US $1 trillion and 140 billion debt. Japan has suddenly become the biggest short seller of US debt.
Between last June and September this year, China (mainland) reduced its US debt by about 91 billion 100 million US dollars. This amount has exceeded the sum of $84 billion 900 million in the US debt currently held by Germany.
As for China's total sales of nearly 100 billion US dollars, Dario, founder and billionaire of the world's largest hedge fund bridge, recently predicted that China would not reduce the possibility of a larger and larger US Treasury debt reduction. I think or become a reality.
According to Russian media reports, according to observers, China is likely to sell up to US $700 billion of US Treasury bonds. If the market has become accustomed to the reduction of US Treasury bonds, it will cause turmoil in the US debt market in the short term if a large number of overseas holders of major US debt are sold.
This may explain further, as mentioned earlier by the US Treasury Secretary Nouchine, "if we are not careful, people will consider using other currencies." This view. (end)