USA debt

 People are getting increasingly concerned about the debt in the USA. This stands at over $40 trillion. Rates are rising in many countries and the US $ is no longer being seen as the safe haven it once was.

New reserve currency?

Since after WW2 and the Breton Woods meeting, the US dollar has been the reserve currency in the world. Oil is priced in US dollars.

However, the world is changing. The US dollar is no longer considered such a safe haven. Arguably, the USA is on the way down and China is on the way up.

Maybe the Chinese Yuan will become the currency everyone will trust and trade in?

The USA or China?

If I was a 3rd world country looking at the USA or China, which would I lean towards?  

The USA is in grave danger of failing on the world stage and it would not surprise me if the US dollar was overtaken as the world's reserve currency.

There is a lot wrong with China, but at the moment few would look to the USA as a beacon of freedom and democracy sadly. The USA is no longer able to hold the moral ground. I find this sad as every American I have known has been kind and generous. Individually every person from the USA I have known has been really nice.

See https://en.wikipedia.org/wiki/Reserve_currency .

Trump upside - NOT amateur radio

In my view tariffs are a bad thing.  

What President Trump is trying to do against Canada wins him no friends. The USA is hardly seen as a role model any more by the third world, who will increasingly be attracted to China. Sadly, the Trump administration comes across as power hungry and greedy. These are not values that many in the world see as good.

Although I understand what President Trump is trying to achieve, this reminds me of King Canute trying to control the tides!!

It may encourage USA firms to make parts, e.g. for cars, in the USA, but I struggle to see how they can make them inexpensively, stoking inflation in the USA. Far Eastern manufacturing will always be less expensive unless they use robots thereby reducing US jobs.

One upside is the dollar is now far weaker against the UK pound, making oil (for us) less expensive.

See https://www.bbc.co.uk/news/live/cly412xwz44t .

US Dollar to Russian Ruble - NOT amateur radio

At one point earlier in the month it looked like the Ruble was collapsing against the US Dollar. I am not sure if it is the Trump effect, but it has recovered a lot since then. Maybe the stories of the collapse were premature?

See Dollar to Ruble .

BRICS - NOT amateur radio

Whilst not at all agreeing with the wars in Ukraine and the Middle East, I can understand why many countries want to move away from the once mighty US dollar. 

It is my view that the 21st century will see a realignment of world power in which the USA will be far less important.

Perverse? - NOT amateur radio

On the day a vaccine for Covid-19 was approved for UK rollout, the value of the UK pound against the major currencies such as the euro, yen and US dollar has fallen! OK I appreciate a BREXIT deal has still to be done, but I was expecting the pound to have a good day.

UK Pound against US Dollar - NOT amateur radio

About 18 months ago "experts" were talking about the UK Pound being worth about 1 US Dollar. At the moment the UK Pound buys about $1.38.

Moral? Don't always believe the "experts"! They guess too.

UK Pound against the Euro? I was wrong last year!

UK Pound against the US Dollar - NOT amateur radio

At the moment the USA seems to have a joke in charge who is even losing the respect of his own party. Personally, I give him 6 months, maybe 12, before his time will be up.

I fail to see how this billionaire is able to be the voice of ordinary US citizens. "Make America great again" is a fine tag line, but making it happen requires the gravitas of office and serious behaviour, not silly tweets.

Meanwhile, the US dollar continues to weaken against the UK Pound.

UK Pound - NOT amateur radio

The UK pound seems to be gaining ground against most major currencies including the euro and the US dollar. BREXIT talks are at an early stage, but talk of a UK pound "melt-down" seems premature.

See http://www.bbc.co.uk/news/business/market_data/currency/default.stm

Euro - NOT amateur radio

For some time, I have predicted that the value of the Euro will fall. It has not happened yet.

When the UK signs Article 50 to formally start exiting the EU I expect the uncertainty may reduce the value of the UK Pound against several currencies, including the Euro. I suspect this will be a blip and by the end of 2017 the Euro will be well down against the UK Pound and US Dollar.

Not being a monetary expert, I could be totally wrong, but to me the EU is like a pressure cooker. The pressure (for change) is increasing and at some point this will hit crisis point.

I voted to "remain" in the UK referendum but I fail to see how the Euro (or the whole EU) can last without big changes. To me, the pressure for change is growing ever stronger. The German economy has most to lose.

UK Pound to Euro exchange rate - NOT amateur radio

It is my view that the Euro will lose value this year so the UK Pound will buy more Euros. Of course, I could be entirely wrong! The reasons for thinking this are:

• Greek debt is still a big issue and there will be fewer nations able to bail them out.
• Several nations are disillusioned with the Euro project and are worried by totally free movement within the EU.
• Several nations are in favour of tariff-free borders to trade but are nervous of ever closer integration.
• I think the UK will show the world it can succeed outside of the EU.

No, several things point to an improved exchange rate. As for the US Dollar and the Japanese Yen exchange rates, I am less clear.

By the way, in last year's EU referendum I voted to "remain" in the EU. I believe the EU faces a difficult year ahead and this year will be "crunch time".