• invalidusernamelol [he/him]
    ·
    edit-2
    5 months ago

    Pulling out so much bond investment at a loss is kinda spooky. The Chinese have much more reliable Intel about what the US government is planning than just about anyone else, and a massive move like that means their confidence doesn't even extend out 5 years before a conflict big enough that the Fed would wipe out any global trust in the USD.

      • invalidusernamelol [he/him]
        ·
        5 months ago

        The idea that they're forming an alternative USD market also makes sense. A majority of the world holds debt in USD and if they control enough of the supply through their own banks, it's harder for the US to force a nations hand by forcing them to trade when they can go to China for the same USD loan on better terms.

        It also gives them the option of loaning out USD and requesting payment in another currency (either theirs or the domestic currency of the loan holder)

        • ☆ Yσɠƚԋσʂ ☆@lemmygrad.ml
          hexagon
          ·
          5 months ago

          Absolutely, and I think this is why a BRICS currency is inevitable long term. Countries outside US control can't continue using the dollar because US uses it as a weapon.

          • invalidusernamelol [he/him]
            ·
            edit-2
            5 months ago

            Definitely, it's ironic that dollarization basically starts with massive adoption of the dollar.

            This is like the nation state version of Microsoft's the E's

            Embrace the dollar

            Extend it's usage in global trade through your own financial instruments

            Extinguish the original dollar

    • GaveUp [she/her]
      ·
      5 months ago

      and a massive move like that means their confidence doesn't even extend out 5 years before a conflict big enough that the Fed would wipe out any global trust in the USD.

      Probably just the Ukraine war right? A complete and total seizure of Russian USD assets

      • invalidusernamelol [he/him]
        ·
        5 months ago

        That's definitely the start, seeing it with Afghanistan and Russia made it clear that it could happen, then the decision to finally pull out of Western banks was likely decided because they see the escalation of tensions with them actually leading to something.