Post by Xxsuperheroxx on May 24, 2023 5:58:37 GMT -6
What does De-dollarization mean?
De-dollarization is the movement to reduce other countries' reliance on the dollar
De-dollarisation refers to reducing the dollar's dominance of global markets. It is a process of substituting the US dollar as the currency used for trading oil and/or other commodities, buying US dollars for the forex reserves, bilateral trade agreements, and dollar-denominated assets. The dominant role of the dollar in the global economy provides the US a disproportionate amount of influence over other economies1. The US has for long used imposition of sanctions as a tool to achieve foreign policy goals. Argentina has recently announced that it will pay in yuan for Chinese imports instead of the US dollar
en.wikipedia.org/wiki/History_of_the_United_States_dollar
The history of the United States dollar began with moves by the Founding Fathers of the United States of America to establish a national currency based on the Spanish silver dollar, which had been in use in the North American colonies of the Kingdom of Great Britain for over 100 years prior to the United States Declaration of Independence. The new Congress's Coinage Act of 1792 established the United States dollar as the country's standard unit of money, creating the United States Mint tasked with producing and circulating coinage. Initially defined under a bimetallic standard in terms of a fixed quantity of silver or gold, it formally adopted the gold standard in 1900, and finally eliminated all links to gold in 1971.
A gold-standard 1928 one-dollar bill. It is identified as a "United States Note" rather than a Federal Reserve note and by the words "Will Pay to the Bearer on Demand", which do not appear on today's currency. This clause became obsolete in 1933 but remained on new notes for 30 years thereafter. Meaning the Uniter States had to have gold in it's reserve to cover the "Note".
The Gold Reserve Act 1933, in order to fight severe deflation, Congress and President Roosevelt implemented a series of Acts of Congress and Executive Orders which suspended the gold standard except for foreign exchange, revoked gold as universal legal tender for debts, and banned private ownership of significant amounts of gold coin.
The New Deal. The Act was drafted in large part by officials appointed by the Hoover administration. The bill provided for the Treasury Department to initiate reserve requirements and a federal bailout to large failing institutions. It also removed the United States from the Gold Standard. All banks had to undergo a federal inspection to deem if they were stable enough to re-open. Within a week 1/3 of the banks re-opened in the United States and faith was, in large part, restored in the banking system.
In 1971, President Richard Nixon unilaterally ordered the cancellation of the direct convertibility of the United States dollar to gold. This act was known as the Nixon Shock.
United States Notes
A United States Note, also known as a Legal Tender Note, was a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their day, a name inherited from the Demand Notes that they replaced in 1862.
While issuance of United States Notes ended in January 1971, existing United States Notes are still valid currency in the United States today, though rarely seen in circulation.
Both United States Notes and Federal Reserve Notes are parts of the national currency of the United States, and both have been legal tender since the gold recall of 1933. Both have been used in circulation as money in the same way. However, the issuing authority for them came from different statutes. United States Notes were created as fiat currency, in that the government has never categorically guaranteed to redeem them for precious metal - even though at times, such as after the specie resumption of 1879, federal officials were authorized to do so if requested.
The difference between a United States Note and a Federal Reserve Note is that a United States Note represented a "bill of credit" and was inserted by the Treasury directly into circulation free of interest. Federal Reserve Notes are backed by debt purchased by the Federal Reserve, and thus generate seigniorage for the Federal Reserve System, which serves as a lending intermediary between the Treasury and the public.
Federal Reserve Notes
Congress continued to issue paper money after the Civil War, the most important of which was the Federal Reserve Note that was authorized by the Federal Reserve Act of 1913. Since the discontinuation of all other types of notes (Gold Certificates in 1933, Silver Certificates in 1963, and United States Notes in 1971), US dollar notes have since been issued exclusively as Federal Reserve Notes.
Fiat standard
Today, like the currency of most nations, the dollar is fiat money, unbacked by any physical asset. A holder of a federal reserve note has no right to demand an asset such as gold or silver from the government in exchange for a note. Consequently, some proponents of the intrinsic theory of value believe that the near-zero marginal cost of production of the current fiat dollar detracts from its attractiveness as a medium of exchange and store of value because a fiat currency without a marginal cost of production is easier to debase via overproduction and the subsequent inflation of the money supply.
In 1963, the words "PAYABLE TO THE BEARER ON DEMAND" were removed from all newly issued Federal Reserve notes. Then, in 1968, redemption of pre-1963 Federal Reserve notes for gold or silver officially ended. The Coinage Act of 1965 removed all silver from quarters and dimes, which were 90% silver prior to the act. However, there was a provision in the act allowing some coins to contain a 40% silver consistency, such as the Kennedy Half Dollar. Later, even this provision was removed, with the last circulating silver-content halves minted in 1969. All coins previously minted in silver for general circulation are now clad. During 1982, the composition of the cent was changed from copper to zinc with a thin copper coating. The content of the nickel has not changed since 1866 (except for 1942-1945 when silver and other metals were used to preserve nickel for war uses). Silver and gold coins are produced by the U.S. government, but only as non-circulating commemorative pieces or in sets for collectors.
All circulating notes, issued from 1861 to present, will be honored by the government at face value as legal tender. This means that the federal government will accept old notes as payments for debts owed to the federal government (taxes and fees), or exchange old notes for new ones, but will not redeem notes for gold or silver, even if the note states that it may be thus redeemed. Some bills may have a premium to collectors.
The only exception to this rule is the $10,000 gold certificate of Series 1900, a number of which were inadvertently released to the public because of a fire in 1935. This set is not considered to be "in circulation" and, in fact, is stolen property. However, the government canceled these banknotes and removed them from official records. Their value, relevant only to collectors, is approximately one thousand US dollars.
According to the Federal Reserve Bank of New York, there is $1.2 trillion in total US currency in worldwide circulation as of July 2013.
In 2022 we printed $267.1 billion dollars in 2021 we printed $319.7 billion, 2020 $216.1 billion, 2019 $173.7 billion.
De-dollarization is the movement to reduce other countries' reliance on the dollar
De-dollarisation refers to reducing the dollar's dominance of global markets. It is a process of substituting the US dollar as the currency used for trading oil and/or other commodities, buying US dollars for the forex reserves, bilateral trade agreements, and dollar-denominated assets. The dominant role of the dollar in the global economy provides the US a disproportionate amount of influence over other economies1. The US has for long used imposition of sanctions as a tool to achieve foreign policy goals. Argentina has recently announced that it will pay in yuan for Chinese imports instead of the US dollar
en.wikipedia.org/wiki/History_of_the_United_States_dollar
The history of the United States dollar began with moves by the Founding Fathers of the United States of America to establish a national currency based on the Spanish silver dollar, which had been in use in the North American colonies of the Kingdom of Great Britain for over 100 years prior to the United States Declaration of Independence. The new Congress's Coinage Act of 1792 established the United States dollar as the country's standard unit of money, creating the United States Mint tasked with producing and circulating coinage. Initially defined under a bimetallic standard in terms of a fixed quantity of silver or gold, it formally adopted the gold standard in 1900, and finally eliminated all links to gold in 1971.
A gold-standard 1928 one-dollar bill. It is identified as a "United States Note" rather than a Federal Reserve note and by the words "Will Pay to the Bearer on Demand", which do not appear on today's currency. This clause became obsolete in 1933 but remained on new notes for 30 years thereafter. Meaning the Uniter States had to have gold in it's reserve to cover the "Note".
The Gold Reserve Act 1933, in order to fight severe deflation, Congress and President Roosevelt implemented a series of Acts of Congress and Executive Orders which suspended the gold standard except for foreign exchange, revoked gold as universal legal tender for debts, and banned private ownership of significant amounts of gold coin.
The New Deal. The Act was drafted in large part by officials appointed by the Hoover administration. The bill provided for the Treasury Department to initiate reserve requirements and a federal bailout to large failing institutions. It also removed the United States from the Gold Standard. All banks had to undergo a federal inspection to deem if they were stable enough to re-open. Within a week 1/3 of the banks re-opened in the United States and faith was, in large part, restored in the banking system.
In 1971, President Richard Nixon unilaterally ordered the cancellation of the direct convertibility of the United States dollar to gold. This act was known as the Nixon Shock.
United States Notes
A United States Note, also known as a Legal Tender Note, was a type of paper money that was issued from 1862 to 1971 in the U.S. Having been current for over 100 years, they were issued for longer than any other form of U.S. paper money. They were known popularly as "greenbacks" in their day, a name inherited from the Demand Notes that they replaced in 1862.
While issuance of United States Notes ended in January 1971, existing United States Notes are still valid currency in the United States today, though rarely seen in circulation.
Both United States Notes and Federal Reserve Notes are parts of the national currency of the United States, and both have been legal tender since the gold recall of 1933. Both have been used in circulation as money in the same way. However, the issuing authority for them came from different statutes. United States Notes were created as fiat currency, in that the government has never categorically guaranteed to redeem them for precious metal - even though at times, such as after the specie resumption of 1879, federal officials were authorized to do so if requested.
The difference between a United States Note and a Federal Reserve Note is that a United States Note represented a "bill of credit" and was inserted by the Treasury directly into circulation free of interest. Federal Reserve Notes are backed by debt purchased by the Federal Reserve, and thus generate seigniorage for the Federal Reserve System, which serves as a lending intermediary between the Treasury and the public.
Federal Reserve Notes
Congress continued to issue paper money after the Civil War, the most important of which was the Federal Reserve Note that was authorized by the Federal Reserve Act of 1913. Since the discontinuation of all other types of notes (Gold Certificates in 1933, Silver Certificates in 1963, and United States Notes in 1971), US dollar notes have since been issued exclusively as Federal Reserve Notes.
Fiat standard
Today, like the currency of most nations, the dollar is fiat money, unbacked by any physical asset. A holder of a federal reserve note has no right to demand an asset such as gold or silver from the government in exchange for a note. Consequently, some proponents of the intrinsic theory of value believe that the near-zero marginal cost of production of the current fiat dollar detracts from its attractiveness as a medium of exchange and store of value because a fiat currency without a marginal cost of production is easier to debase via overproduction and the subsequent inflation of the money supply.
In 1963, the words "PAYABLE TO THE BEARER ON DEMAND" were removed from all newly issued Federal Reserve notes. Then, in 1968, redemption of pre-1963 Federal Reserve notes for gold or silver officially ended. The Coinage Act of 1965 removed all silver from quarters and dimes, which were 90% silver prior to the act. However, there was a provision in the act allowing some coins to contain a 40% silver consistency, such as the Kennedy Half Dollar. Later, even this provision was removed, with the last circulating silver-content halves minted in 1969. All coins previously minted in silver for general circulation are now clad. During 1982, the composition of the cent was changed from copper to zinc with a thin copper coating. The content of the nickel has not changed since 1866 (except for 1942-1945 when silver and other metals were used to preserve nickel for war uses). Silver and gold coins are produced by the U.S. government, but only as non-circulating commemorative pieces or in sets for collectors.
All circulating notes, issued from 1861 to present, will be honored by the government at face value as legal tender. This means that the federal government will accept old notes as payments for debts owed to the federal government (taxes and fees), or exchange old notes for new ones, but will not redeem notes for gold or silver, even if the note states that it may be thus redeemed. Some bills may have a premium to collectors.
The only exception to this rule is the $10,000 gold certificate of Series 1900, a number of which were inadvertently released to the public because of a fire in 1935. This set is not considered to be "in circulation" and, in fact, is stolen property. However, the government canceled these banknotes and removed them from official records. Their value, relevant only to collectors, is approximately one thousand US dollars.
According to the Federal Reserve Bank of New York, there is $1.2 trillion in total US currency in worldwide circulation as of July 2013.
In 2022 we printed $267.1 billion dollars in 2021 we printed $319.7 billion, 2020 $216.1 billion, 2019 $173.7 billion.