The words we so often hear bandied about is that "they" hate us because we are powerful. Or "they" hate us for our freedoms.
Who is "they"? The entire world that is not America.
But, is it really true? Well, up until recently, not really.
Unfortunately, lately, we have really been abusing out power. Shutting off people from dollar trade. Stealing other country's money and gold. Bombing everything in the middle east, for made up reasons.
You hear things like China wants to be the big power in the world. To topple America. That China wants to control the world reserve currency. That is what "they" say.
But it really is just the same rhetoric as red team vs blue team. U.S.A. vs U.S.S.R. The reality is much different. Way different.
What does the World Reserve Currency mean?
Having the world reserve currency is actually really hard on the country who has it. It means all of your currency goes overseas to other countries. You need to make more and more of it to satisfy not just your demand, but the world's demand.
And, it really doesn't do anything for you… unless you are running a ponzi scheme. Like a debt based, fiat currency system.
If you have a debt based, fiat currency system, then you can print extra currency, and the inflation will be minimized as the currency leaves your country. So, it is free money for the printing entity. (until the chickens come home to roost) Basically, you can buy foreign made goods, and in turn, you give them some debt.
And when you have the world reserve currency and a debt based fiat currency system, then you can use this power to make other countries do your bidding. By bribing, extortion, or sanctions.
Lets say China could be the World Reserve Currency
Besides no one trusting China, especially where money is concerned, China has a lot of problems becoming the world reserve currency holders.
First, their economy is built on exporting their labor through cheap goods. It is not based on exporting debt and buying goods. So, they won't gain from the transactions. And it will be extremely hard to get the Yuan out of the country. (The US exports the dollar all over the place. Buying all the crap. So everyone has dollars) China exports goods. So, how would the Yuan get out? The answer is it doesn't. The flow is in the wrong direction.
Further, China has all kinds of controls on money, which they would have to get rid of so that the Yuan could flow over seas. Much more than just buying property in various high priced cities.
So, basically, China would have to completely change. They would have to do what America did. Send all of their manufacturing over seas. Become a service and banker economy. And they haven't even become a 1st world nation yet. So much of their people are still living in poverty. As in, skimming sewer/storm drains for oil to cook with.
China hasn't reached a point where they could support the world reserve currency. But they would still love to be the ones in charge.
The BRICS world currency?
Even though no other country really has the ability to make their currency the world reserve currency, there are a lot of nations that are upset with The US using the dollar to manipulate them.
And so, Brazil, Russia, India, China and South Africa are getting together to create a currency. But really, they are trying to work out the intricacies of having a basket of currencies be used for international settlements. Or, at least to trade in between themselves.
Will this BRICS-money become the world reserve currency? Will this topple The US's dominance? Will this create a multi-polar world?
Well, actually it really depends on who is allowed to print money.
Even if The US Fed is out of the picture, you still have the BIS (Bank of International Settlements) who really sets the policy for currencies around the world.
So, the BRICS need to ignore the Fed, and put their efforts on going around the BIS.
A NO-polar world
It is interesting, that while BRICS-currency is really having trouble taking off, bitcoin is starting to fly. During this cycle, or definitely the next, bitcoin will be worth more than most nation's GDP. It will be used by corporations to send money around the world. And once enough corporations are using, it, then everyone will be using it. And bitcoin will become the world's reserve currency.
There isn't much the BIS or the Fed can do to stop this. All it takes is for enough money to be invested in bitcoin, and then large players to see that bitcoin transactions are where its at.
Then we will move into a world where no country can print money and export it to the world. A world where, monetarily speaking, each country is equally capable of transacting in bitcoin. There is no one who can be a gate keeper. No one who can decide who is in, and who is out.
I would prefer a no-polar world, even if the Chinese goods at Wallymart costs twice as much.