Teach  EcoKnowmics

There are theoretically several alternatives, including the Euro (they tried and failed) and the Rubble (certainly not after Russia’s War). But perhaps the most realistic alternative is the Chinese Yuan.

To explain, no currency would replace the U.S. Dollar altogether. But it is conceivable that if certain currencies were used for trade, the importance, and thus the value of the U.S. Dollar would decrease. This because, the value of currencies such as the U.S. Dollar is determined by the simple balance of supply and demand, and that the demand for the U.S. Dollar would decrease.

Geo-politics have motivated the move to replace the U.S. Dollars as many of America’s rival want to diminish our importance on the world stage, and they believe that they can do so by replacing the U.S. Dollar with another currency. But more realistically, trade would be the entry point that would give an inlet to diminishing the importance of the U.S. Dollar. This is why the Chinese Yuan is the most serious rival to the U.S. Dollar; because many countries purchase Chinese goods in large amounts, many countries would accept to trade in that currency. Hence, the strength of the Chinese Yuan is that it could be used for international or bilateral trade.

JP Morgan Chase commented that “China’s Yuan could end the US Dollar…. As it would) provide a viable alternative to the greenback.”

We already know about the BRICS: Brazil, Russia, India, China, South Africa, and now, Argentina, Egypt, Ethiopia and Iran. This alliance of countries is attempting to “lessen the (U.S.) hegemony (and revalorize) the global South.” Through this BRICS which has promoted local currencies as alternatives to the U.S. Dollar, China would have the perfect entry point to challenge our currency as it has found like-minded countries “to (help it) assume a greater role in the global economy over time.” “Statistics verifying (the Yuan’s) prevalence in the bloc’s unilateral settlements” are already eye-opening. “China's yuan now accounts for a record 7% of foreign trading,” “75% of (Russia’s) trade with China and 25% of its transactions with other countries” are in Yuans, and the share of “foreign reserves held (in the U.S. Dollars) by central banks around the world has declined to a record low  58%.”

We are entering A Brave New World Indeed!