alt Hacker NewsDe-dollarization: Is the US dollar losing its dominance? (2025)
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It's not losing it so much as that it is being destroyed on purpose.
China is intentionally undermining the dollar in order to try to make the Yuan the world currency[1,2,3]. My current hypothesis is that the growth in the _price_ of the US Stock market (eg S&P 500) is actually devaluation of the dollar. Compared to real money (Gold) the S&P500 is down over the past 10 years. [4]
1 - https://www.reddit.com/r/economy/comments/1o2s6qp/yuan_has_s...
2 - https://www.economist.com/china/2025/09/10/china-is-ditching... ( https://archive.is/aNRmm )
3 - https://www.amazon.com/dp/B006JAM3UU/ "Currency Wars" by James Rickards (2011)
[4] - https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart
Related is the PM of Canada’s speech at Davos today. I don’t think that I have heard such a blunt assessment of the past and future from a politician, ever.
This may be a historically significant speech.
I strongly encourage interested folks to read Miran's "A User's Guide to Restructuring the Global Trading System" (I won't link directly since it auto-downloads a PDF).
Miran, and his thinking, clearly have this admin's ear and they're following many of the prescribed steps in his white paper. To the T frankly.
So if you're surprised by the USD devaluing by 10% last year or the immense pressure to drop the fed rate to under 2% by next year, well the reasoning and strategy is all laid out very clearly in the above whitepaper.
No confusion necessary! They explain every (terrifying) bit of their plan in that paper.
What is left out, and why I say it is terrifying, is that the whitepaper is academic and basically leaves uncovered any of the _political_ ramifications of these economic changes. And of course, those political ramifications can be immense.
Just last week, I was accused on HN of "not knowing what I'm talking about" when sharing data showing, and my interpretation of, a declining US dollar globally.
It is so obvious in the context of globalization: countries seeking power will chip away at fiscal dominance of others with a thousand cuts. Why wouldn't they? Especially after years of getting bullied.
So many people are so dependent on this reality that I think it's going to happen long before any Americans accept it has happened.
For those who are not bothering to read this,the article essentially states that de-dollarization is happening in pockets (e.g., reserves down to ~58-60%, Treasuries foreign ownership at 30%), but the dollar's core dominance persists.
What would replace it? I guess the options are Yuan, Gold, Oil or maybe BRICS in the future, none of which are safe, stable, and liquid.
It's no secret that our current US administration is envious of China. So in no small part they probably want to model the US Dollar after the Renminbi. Drop the value internationally to incentivize American exports, and manipulate the hell out of it. (Hence why they have dropped inflation as a political issue - some in the administration are essentially rooting for inflation to get much, much worse).
It should go without saying that this would be shortsighted - China made it work because they were able to take advantage of a strong international market denominated in USD. The US cannot destroy our own common market and currency and expect to take advantage of it.
Furthermore, we know what a de-dollarized world looks like - imperialism. If you need to secure oil/mineral/food for your economy but you need expensive foreign currencies to acquire it, it suddenly becomes much more economically appealing to take the resources.
Interesting related read: https://www.chathamhouse.org/2025/04/us-dollars-role-interna...
And if you feel like something long (pdf): https://www.atlanticcouncil.org/wp-content/uploads/2025/05/A...
The international value of the dollar as a reserve and trade currency is inherently tied to the behavior of the US Government and the Federal Reserve.
The behavior of the US Government has been very unusual lately, and the independence of the Federal Reserve is actively being challenged.
So draw from that whatever conclusions you wish.
If the goal is to make US goods attractive to other countries and to decrease our trade deficit (not saying I agree with this goal), either the dollar has to become fundamentally weaker or the goods have to become more valuable. The latter feels more difficult than the former at this point. However, the side effects of a weaker dollar may not be worth weakening it.
Blackrock released a document you can download that outlines their 2026 outlook. A key point there was: "We go underweight long-term US Treasuries." A sign of bearishness on USD due to fiscal policy.
https://www.blackrock.com/corporate/insights/blackrock-inves...
Interesting the wikipedia article of the Mar-a-Lago Accord has been deleted https://en.wikipedia.org/wiki/Mar-a-Lago_Accord
Last archival I've found https://web.archive.org/web/20251110042359/https://en.wikipe...
The dollar has lost 13% vs the South African Rand in the past year. Thats an interesting metric for me given how South Africa has decoupled from the US in favor of China and Russia, with a strong anti-Israel stance. And also taking into consideration how the country is still struggling with crime, corruption and uncertainty.
It’s doing to be interesting to see how this plays out as the producers and makers of the world unite, and the EU turns away from the US.
The world is rich and getting richer. The quality of life outside of the US is rising.
The gold :: oil ratio tells quite a tale
https://www.macrotrends.net/1380/gold-to-oil-ratio-historica...
I have been interested in this topic for a while now, and have run different scenarios. What is everyone's thought on Chinese Yuan or Euro as the reserve currency?
Is the US dollar losing its dominance? The answer is both A) yes and B) it doesn't matter.
Yes, US dollar is losing a bit of power and influence. This is likely to continue.
Making inferences about the US global dominance based on this fact is misguided. US global dominance is as strong as ever and, if anything, getting stronger. US has very successfully managed to move the game a level above currency, to direct governance via financial, legal, political and military means. It has made any meaningful competitors either entirely irrelevant (e.g. Russia), pretty well aligned (e.g. India) or pretty well contained (e.g. China) It's blue skies ahead.
Gold front-runs monetary policy, meaning central banks and people use it as a hedge against currency devaluation or other uncertainty (e.g. the U.S. Federal Reserve being taken over by the executive)
Now look at the gold chart over this past year. Yeah, people are uneasy and we're likely to see a lot of printing.
Also JPM in April 2025...
JP Morgan see gold prices crossing $4,000/oz by Q2 2026
Having dollars was useful to trade with US. But the trade has been reduced by tariffs.
Also. Any attack to the independence of the federal reserve damages whee vale of the dollar
The US century is already over. It's just that a lot of US citizens don't see that. De-dollarization will happen when one is a traitor to it's allies
I would imagine U.S. foreign policy, particularly the prolific use of sanctions contributes to this wane as well. There was some discussion about this a while ago - effectively as the U.S. continues to rely on a strategy of imposing sanctions against foreign adversaries, those adversaries increasingly reorient their economy towards non-U.S. economies such as Russia or China. The more the U.S. utilizes sanctions, the less effective they become.
Is World in immediate trouble? I see three posts discussing collapse of US currency and market on homepage, and this site actively avoids anything political.
My understanding is that the standard of living in Britain dropped about 75% when Britain lost the reserve status of the Pound Sterling.
I expect it to be worse here in the US.
I wasn't expecting us to try to speedrun it, though. I thought we had a decade or two left, now I think it'll happen before the end of the year.
This was written in July 01, 2025, and lot has happened since then. Is there any update to this report?
The USD's status as a reserve currency is directly linked to it's trade deficit with the rest of the world. Because all other entities (individuals, corporations, organizations) want to keep their wealth in USD, there's a strong incentive to sell (goods, services, infrastructure) to the US and obtain USD in return. Conversely, there's a strong disincentive to buy from the US because goods have to be paid for with USD, which means parting with the very currency one is trying to accrue.
One of the most effective ways to ease the trade deficit is to reduce USD's status as a reserve currency.
As they say about bankruptcy. First it happens slowly then quickly.
I suspect were about to see that pivot
The dollar is a weapon, and when the US can print as much as it likes, the odds are always stacked in favour of the US.
Trouble will really come when the US tries to get out of its ridiculous debt trap. What will they do, wave a wand and their debt goes away?
The former IMF chief Kenneth Rogoff has been talking about this and appeared on NYT Ezra Klein's podcast that I highly recommend[0]. He also talks about China and the role of the dollar at the end with Dwarkesh Patel[1]. A lot of the discussion I see here is adressed by him.
[0] - https://www.youtube.com/watch?v=pT2cohNt6a4 [1] - https://www.youtube.com/watch?v=P2b4TjQa4gk
No idea how those things work but surprised the $/€ exchange rate stabilized.
Patently. The current situation in the USA doesn't inspire confidence.
It's a small relief to have emerging markets holding dollars. Hopefully their economies will continue to grow and that could be a long term benefit to offset the slow de-dollarization across the rest of the world. It would be in US interest to invest into those emerging markets.
The US has had an economic wind at its back for a long time, but there’s perfect storm of debt, trade, inflation and de-dollarization brewing.
Contrary to what everyone thinks - Dollar losing its reserve currency _canbe_ a good thing.
Title needs to be updated when the 1 July 2025 date. For a moment I thought JPM put it out in sort of a response to criminal charges against Jerome Powell, fed chair. It’s probably unprecedented? Wild times.
How do people hold yuan? I was surprised at the lack of ETFs in this space. There's of course a lot of Chinese equity ETFs. There used to be a pure currency ETF but it was liquidated a couple years back. CBON seems like a good way to get exposure via bonds, but its AUM is quite low.
The issue is that there isn't a great alternative.
The euro is difficult to manage because of the diffuse control, pound an even smaller economy, RMB just not global enough (and tough argument to see that happening), gold/bitcoin/whatever not the same inherent stability.
Indeed the dollar weakening, but nothing really to take it's place.
The ultimate check and balance was always supposed to be the US consumer. It seems any major disruption to purchasing power will result in a backlash large enough to undo any policy and administration.
I’d still bet that any sudden movements in this direction will be checked
The event has been in motion with every action from the administration just cementing it more. Forget about the dollar’s dominance, at this point I am not forked that he will usher in ww3, or at the very least a war between Europe as the US seems very likely
Honest question: isn't it just a matter of time before US dollar loses its dominance, given that US has been losing its manufacturing business? I mean, can people really keep investing in the US market if they need less and less stuff produced by the US?
Do i need to stop investing in msci world? what else would i invest in?
India pays one 1.4 GW nuclear power plant in yuan and they start talking about global de-dollarization as if people can't think in proportions anymore?
Curious how HN is using this information to plan your investing approach. Does the typical approach, broad market globally diversified still hold assuming dedollarization?
Betteridge's Law strikes again. As of Q2 2025 (roughly the time that TFA was published) there is more dollar-denominated debt than ever before [0]. And its value relative to other currencies (as of this month), while subject to cyclical fluctuations, is on par for the post-Covid cycles and higher than pre-2020 levels [1].
[0] https://fred.stlouisfed.org/series/FDHBFIN [1] https://fred.stlouisfed.org/series/DTWEXBGS
When is everyone going to dump their US bonds? Will Groenland be the redline, finally?
Interesting how gold hit a record high today of $4700+/oz.
If Something Cannot Go on Forever, It Will Stop
With the pace of news these days, especially economic news, I think this deserves a (2025) in the title.
As a big nitpick, I found the y axis in that chart ranging between 40%...90% to be horribly misleading.
I remember studying pre-WWI history, and particularly how carefully Bismarck arranged German foreign policy like he was the diplomatic equivalent of Bobby Fischer. Everything was situated perfectly and Germany was totally content.
Then along came the absolute moron Wilhelm, and he managed to Leroy Jenkins Germany's beautifully arranged relationships into an aggressive, tactless nightmare where all Germany's allies were turned into enemies, and everything turned out exactly like you'd expect.
As the saying goes, history doesn't repeat but it often rhymes.