The U.S economy without the reserve currency status for the US dollar is pretty much the UK Because the UK once had that status. the pound was the world's money and it lost that status about 100 years ago to the US dollar. And now you see the UK. It's still there.

Everything is fine, people are not dying, everything is not burning up. but it's a whole different country versus the Empire we saw a hundred years ago. Now the question is, will the US dollar lose its dominance And in this video, let's first answer a few questions. Well, that actually things happen to promote this or is it absolute horseshit? Well, I think there are a few things worth mentioning that are concerning as far as the US dollar goes.

number one. The French President went to China for a few days a visit and he was very cozy with President XI and he also talked about reducing the French dependence on the US in general. And of course, the Chinese Media made shish kebabs from this statement. And it's not completely unbased because you have to understand that the Chinese and French always had a good relationship, much like Germany used to be a good friend of Russia post World War II at least in the utilitarian sense of the world.

Of course, that friendship is now gone given what just happened. but Germany was to Russia what France is to China. The French and Chinese always got along. They do great business together.

A lot of French companies are trading with Chinese companies. A lot of business goes on between France and China. they always had a good understanding. So in that sense, it's not shocking that there was coziness between President XI and Macron.

Now the one thing that happened over the past few weeks is that we did see it for the first time. A liquid natural gas deal between a Chinese company and a French company are actually being carried out in Chinese Yuan not in US Dollars. That's the first time that happened in history. So you you have to consider that.

You also have to consider the fact now Brazil and China also sign an agreement in which they will trade between themselves and their own currencies that has never happened before. Saudi Arabia Just a few months ago came out and said we're considering creating oil in anything besides the US dollar. For the first time in 50 years, they've said it. You can't ignore it.

The Brics countries Brazil Russia, India, China and South Africa is now basically working on some sort of a combined commodity based currency to potentially challenge the US dollar as a world Reserve currency. So there's a lot of moves being made that are concerning to the US dollar. You cannot ignore it and just say yo! Nobody is trying anything. No, this is definitely moves going on.

So the question is, is this actually the beginning of the end of the US dollar? That's the you know, the billion dollar or the trillion dollar question. And look, in our lifetime, the US dollar. was always the world Reserve currency and now it is being challenged for the first time. I Think in what in 100 years and we have to acknowledge that we cannot ignore that there is a challenge going on.

And there's no doubt in my mind that these sanctions the U.S imposed on Russia and everybody who work with Russia as a result of the war in Ukraine has accelerated this process amplify this process because it created a lot of fear. People saw the Us being very aggressive using and kind of weaponizing its currency and that caused a lot of countries to freak the out and that accelerated the process of the US dollar being challenged no doubt. But let's look at the relative day before we ask the real question, which is would it be possible given what I just said to actually replace the US dollar? So the reality today, I'm just going to give you some numbers. right now: sixty percent of the global reserves are in US dollar now, in second place, the Euro is at 20 percent, and in fifth place is the Yuan with 2.7 So the difference right now between D1 and US dollar is 2.7 versus 60.

So there's still a significant difference between a D1 and the US dollar. Now, the US dollar used to be 70 about 20 years ago, so it's down about 10 in 20 years, but it's still by far three times biggest and bigger sorry than the second place and more than 20 times bigger than the Yuan now. Ninety percent of all currency transactions are carried out in US dollars as of today, and 95 of global oil trade is done in US Dollars. Well as it stands based on these stats and we don't need anything more than that and U.S right now.

and the US dollar is number one and there's no clear second place forming based on the data we just seen. But it doesn't mean it cannot happen. It already happened. There were multiple, you know, Reserve currencies in existence.

The latest ones was the British pound and it did lose its you know status. I'm sure the British never imagined losing their sales, but they did it so it can't happen. So what is it possible to replace the US dollar? I Think. First of all, it's way easier said than done and I'll show you why and it's not new.

For those of you who kind of a little bit older like me, Um, you know. I was born in 1981 and even as a kid I Remember about 30 something years ago people were always talking about the downfall of the US dollar. so the US dollar was always kind of in this discussion. Oh, when will they lose their sub currency? It's been three decades.

it hasn't happened yet, but it is possible. You know we talked about it. It is possible. But for that to happen, we need a few conditions to actually fall into place.

Whoever replaces the US dollar has to have the largest economy Right now. the US is a 23 trillion dollars GDP China which is being talked about as a potential air Is it 18 trillion dollars? Now out of those 18 trillion dollars, you have to understand that one third of it about six or so is based on the real estate market in China And a lot has been said about the real estate market China being a glorified bubble glorified Ponzi scheme. There's a lot of questions about the validity of the Chinese data because one third of it comes from Market that's essentially um, a glorified a greater full Theory And then the rest of the number is also very, very dodgy. There's a big question about the validity of those 18 trillion dollars because if you compare tax income, you know, um, should be very close 23 to 18 trillion GDP.

But U.S collects five trillion dollars in tax in a year. You want to guess how much China collects China collects 200 billion in a year. So if the economy is that close, you should have seen that kind of aggregate tax Collision parity. but it's not even close.

That's so when I look at tax collisions and I see 200 billion versus 5 trillion I understand, stand that this GDP comparison is really out of place. And the other thing is China is falling deep into a demographic spiral If you guys want, I'll make a separate video explaining that China is basically aging, aging very fast. They don't have a solution like the United States in which they can open the border and have multiple young people come in through the door. nobody's banging on the door to get into.

China China is basically losing its Workforce to an aging population. It's probably the worst of its kind. and I think it's beyond the point of no return for China I Think that's their biggest problem, not the Us and not not any of this geopolitical stuff. And even if you like take all the Brics countries and you combine their all economies and aggregate, they're They're pretty much on par with the US With 24 trillion dollars, they collecting tax one trillion dollars a year.

the US collects five billion dollars of tax a year. So the US is still effectively five times bigger than the entire Brics Union together, whatever that's worth. So there's no size match here for Reserve currency yet. Now the other thing you need is stability.

and Trust for that, you have to have a fixed foreign exchange rate. All of these other currencies and the Brics countries are very unstable. You have to have very loose currency controls, which means it's easy to trade the currency. The Yuan is very tightly controlled by the Chinese government.

You have to the rule of law and democracy for you know, a judicial system which you can appeal if you have a problem in Russian China. The judicial system is pretty much. you know it's just a rubber stamp of the government. Plus Russia isn't War Right now, Taiwan is starting to form some sort of a war situation with Taiwan.

Not a lot of stability there, not a lot of trust. Also enforceability wise, the US has the largest navy, the largest military, the richest military. It can enforce its policies sometimes unfairly, but it is what it is. None of these other countries in the position.

you just see. You know what's happening with Ukraine right now Putin has trouble with Ukraine how can he enforce Global policy? Um, now in my opinion, you know the Saudis have been, you know, flirting with replacing U.S dollar for years. But their entire economy is built on the US Dollar on U.S equipment on U.S technology. The US is helping Saudi transition away from oil their entire next 10 years is based on the U.S helping them do that.

There's a terrific relationship between the Saudis and the U.S it's a complete symbiotic relationship. The U.S needs Saudi but just as much as Saudis need to use the even though they don't like each other, they need each other. The Saudis absolutely need the US, the US, News the Saudis. the oil is important, but also the military support.

the ability of the U.S to provide technology to help Saudis transition from oil to a services-based economy. All of this, there's too much um combination going on between Saudis and the U.S for them to overdo this move. they keep flirting with that. You know to kind of head to the U.S they're not.

They're in kind of. they don't own us so to speak right? And I Look, Macron's going to China is I think it's Putin 2.0 Remember when he went to Putin and he came back with the Neville Chamberlain moment where he was waving that little paper saying oh, putting promise me is not going to invade Ukraine it's very similar. I Think he went over that to try and fix things with Ukraine and he's trying to distract himself or distance himself from the his own riots back home. because of the there's a retirement age, he's trying to create some extraction.

Get away from that look. French and Chinese are close on, but French in the US are closer strategically. Historically this, you know, French and the US are always been analyzed. There always will be.

um. France always sees itself as a bit bigger power globally than they are, and that's why Macron does stuff like that. And at the end of the day, the EU needs the U.S support. NATO They don't have the money, They don't have the geography.

they don't. They have really unfriendly neighbors, unlike the US. So a lot of the US. resources can go towards Europe.

Which absolutely, There's no sense for this to go beyond the headline in the Chinese newspaper. So the end result here? Um, yes. the dollar might lose influence. Yes, other currencies might rise.

But at the end of the day, the US dollar is not going to lose its dominance. And it's not going to lose the world's Reserve currency status anytime in our lifetime, at the very least. And you know, beyond that, who knows. see the next video.