There is much talk (actually their isn't in America, all hush hush for some reason) that the BRICS "currency" will topple the dollar from its world reserve currency status. There is just one big problem. There needs to be a LOT more BRICS currency flowing around for there to be enough liquidity for the world to switch over to using it.
The thing about the dollar is that it is everywhere. Everyone has some. Everyone is used to it. There is enough of it to make large transactions possible anywhere in the world.
But, that is just how things are right now. And everyone can see that things are changing.
Where are we really, in this changing of world powers.
How much change will it take to topple the dollar?
Will it ever be toppled?
Or, maybe the dollar just dies, and that's that.
Where are the BRICS at?
It is obvious that The US is abusing its currency to hurt other countries. And that other countries would like to get out from under it. And which country is not envious and would like to be in The US's position?
There is no other currency that has so much of it outside of its own borders to become a world currency. Not even the Euro. (if it survives all its turmoil that it is in)
Will the BRICS, with their basket of currencies work as a world currency?
Well, as they are going, almost all of the small countries will be on board with them. But, without Germany, France, UK or America, they really do not measure up, just not enough currency floating around.
China's Yuan is almost unheard of outside its border. And no one trusts China. They have done every underhanded con in the book. (they had to back it with gold to trade for Russian oil)
Russia's Rubble is far more trusted, but with all of NATO against them, and this "war" with U-crane, it will be very hard to get world acceptance.
Brazil, India and South Africa are not power houses of economics yet. (They could, they probably will be.)
So, all the BRICS currency is going to do in the near future is facilitate trade between themselves. And this will, over time, make it a reserve currency between member countries.
But, right now, they do not have enough currency, even inside their countries, to take on the world.
Where is the dollar at?
So many people have so many dollars, that it will take forever (and a day) to divest of them. The dollar is in no danger of losing reserve status for a while yet.
However, the dollar is dying, and if the Fed doesn't get to come out with the new dollar soon, the whole things is going to collapse.
It may be that the dollar hyperinflates into oblivion. However, many other currencies are in the same boat. They are going to hyperinflate too.
What is likely to happen… instead of all those countries holding bonds, selling them all at once to crash the dollar, they are instead going to try to cash in those bonds to pay for things that keep costing more. And so, The US bond market is going to crash as all that inflation comes rushing back to America. It is just that, there won't be anyone to threaten with those big aircraft carriers. (this tsunami will start in the east and then sweep through the Eurozone, and then crash into New York)
Anyway, this is all baked in the cake, and there is nothing we can really do about it. It will all be about what other avenues for money flight exists.
What about bitcoin?
Bitcoin is in a weird position in that it is about to achieve adoption around the world. Weird, huh? And this might be because everyone is looking for the exit door (from fiats all over the world)
Bitcoin is also in a weird position in that it is not tied to a country. And many, many countries are about to be engaged in border wars and civil wars.
NATO is going to break apart. And then, those countries may dig up their old grudges and do some border line redrawing. (there may even be some that just negotiate putting the border where it should have been. (groups of people that are one, but live on two sides of a line, really shouldn't be like that)
So, bitcoin, being above countries, being truly decentralized, may become the worlds' reserve currency simply because it is not tied to any country.
After that, it is just a matter of how big bitcoin gets. It needs to have enough liquidity to manage the flow of capital/commodities around the world. (You can say bye bye to gold as #1 market cap)
So, on our current path, bitcoin will be the worlds' reserve currency, unless all the (civil)wars are averted AND The US stops using its currency as a weapon and basically, everything goes back to normal (0.01% chance of this happening) So, it is just a matter of time.
What about gold? Don't forget about gold.
IMHO gold doesn't have a chance.
The problem with gold is that it needs to be exchanged. Or you need to have a place that everyone all over the world trusts with keeping their gold. There was Switzerland, but it has lots its trust, and is about to be embroiled in civil war. There was the New York Fed. And they have already started stealing gold, and, are connected with the dollar, so no one will trust them with their gold.
If no one place is safe for gold, then you need to transport it. And with wars popping up all over the place, transporting becomes very hazardous.
Sure we have all of these central banks, all over the world stocking up on gold, but what will that do? It is only good for making people feel safe using the fiat they mint. But, how does that get transferred outside their borders? How will that work if the country is at a real civil war?
Gold will be too valuable to move around the world, and thus gold will not be useful for being the reserve currency/money/commodity.
In the same vein, bitcoin will be extremely valuable because it can be sent across borders, even if those borders are on fire or de-militarized.
So the properties of gold that made it an ok money, will work against it in becoming the world reserves again.
You can hold it in your hand! Which also makes it impossible to send to China to buy an iPhone.
The only thing i can really say for sure is that everything is going to change.
Lines on the map are going to change all over the place.
Technology is going to change everything. Imagine someone inventing teleportation, but it is only good for small items that are not living matter. Then, all of a sudden, money made out of that material (maybe gold) can become currency that can be sent all over the world. Or maybe the inventors come up with an internet that works everywhere on earth. You like stick a rod in the ground, and an antenna up as high as you can, and you can communicate with the world. No wires, no under-sea cables, no satellites. This totally changes the one big problem with digital internet money.
The wars and rumors of wars is already baked in the cake. The only constant is change.
I believe bitcoin will probably take over as the worlds' reserve currency. But, i also believe this will not look like we expect it. It may be that everything is priced in bitcoin, but nothing is paid for in bitcoin. And that we have a EURO-coin (crypto) and a N.America-coin (crypto)… where each connected trading region has their own coin.
Things are going to get strange. So keep your head on a swivel and keep evaluating new technologies coming out.
The only thing for sure is that the old paradigm is dead.