US Dollar Status as Global Reserve Currency Slides

Chinese Renminbi struggles forward in slow micro-steps.

If the US dollar loses its hegemony as a global reserve currency, it would be a sea change globally, and specifically for the US economy. Today, we got the next installment in that saga, via the IMF’s quarterly COFER data on foreign exchange reserves.

Total global foreign exchange reserves in all currencies ticked up 1.1% from the first quarter, to $11.7 trillion. US-dollar-denominated exchange reserves rose only 0.7% to $6.79 trillion, and their share of total global foreign exchange reserves fell to 61.63%, down from 61.86% in the prior quarter. And this has been going on for years in baby steps:

The US dollar’s share of global reserve currency declines when central banks other than the Fed proportionately reduce their dollar-denominated assets and add assets denominated in other currencies.

Compared to the mega-moves in the 1970s, the recent moves have been muted. Nevertheless, the current share of USD-denominated foreign exchange reserves of 61.63% is the lowest since the year-end in 2013. The bump in 2014, 2015, and 2016 has now been unwound:

These US-dollar-denominated exchange reserves are US Treasury securities, US corporate bonds, and other financial assets that central banks other than the Fed are holding in their foreign exchange reserves. The Fed’s own holdings of Treasury securities and Mortgage-Backed Securities are not included in “foreign exchange reserves.”

However, the Fed’s holdings of foreign-currency denominated assets are included in the other currencies. Unlike some other central banks, the Fed holds just a smidgen in foreign currency assets – currently $20.6 billion worth, compared to, for example, China’s $3.1 trillion in foreign exchange reserves.

Euro fails to dethrone dollar.

The euro has been replacing in phases the national currencies of EU member states, starting with five currencies, which included the Deutsche mark, a major reserve currency at its time, but way below the dollar. A huge amount of optimism was attached to the euro when it arrived. The predecessor currency assets converted into euro assets, but central banks then piled on additional euro assets. During the early phases, the dollar’s share dropped from 71.5% in 2001 to 66.5% in 2002.

Today, if the 19 member states in the Eurozone were one country, it would be the largest economy in the world. Combining these European currencies into one currency gave rise to the hope in the early days of ending the dollar hegemony. The goal was for the euro to achieve parity with the dollar. These hopes were brutally derailed by the euro sovereign debt crisis, and the euro got stuck at a share of around 20% — 20.3% in the second quarter 2019.

The Chinese renminbi grows but barely registers.

Since its inclusion in the IMF’s currency basket – the Special Drawing Rights (SDR) – in October 2016, the Chinese renminbi has been officially a global reserve currency. But the patience of folks who’re hoping that the renminbi would quickly knock the dollar off its perch continues to be severely tested: In the second quarter, the share of the renminbi ticked up a smidgen to a record but tiny share of 1.97%.

In the overall scheme of things

The chart below shows the dollar’s slowly declining but still hegemonic share of foreign exchange reserves, the euro’s essentially flat share, and the other reserve currencies’ comparatively tiny share. The renminbi (RMB) is the short red line near the very bottom:

To shed some light on the tangle of currencies at the bottom of the chart above, it’s useful to look at them without the US dollar and the euro overshadowing the neighborhood:

Three observations:

  • The yen’s share rose from around 3.5% in 2015 to 5.4% currently, blowing past the pound sterling (GBP).
  • The renminbi’s share rose from 1.07% in 2016 to 1.97% currently. While still a tiny share for the currency of the second largest economy in the world, it has nearly doubled in three years, surpassing the Australian dollar and the Canadian dollar.
  • The share of “other currencies” plunged in 2016, with the arrival of the renminbi. Before the renminbi was an official reserve currency, it was already held as a reserve currency, but the IMF listed it among “other currencies.” Those two were split in 2016.

Not every central bank discloses to the IMF how its foreign exchange reserves are “allocated” among currencies. But the disclosures are growing. In 2014, only 59% of the foreign exchange reserves had been “allocated” to specific currencies. By Q2 2019, allocated reserves reached 94% of total reserves.

Reserve currency and trade deficits.

The US has the largest trade deficit in the world. And it has the dominant reserve currency. So there has been the theory that the US, in order to have “the” global reserve currency, “must have” a large trade deficit with the rest of the world. But this “must have” is disproven by the euro, the second largest reserve currency, and the yen, the third largest reserve currency: their economies have large trade surpluses with the rest of the world.

The relationship is the other way around: The US dollar being the largest reserve currency (and the largest international funding currency) permits the US to easily fund its trade deficits. The reserve currency status of the dollar has enabled policies by the US government and actions by Corporate America that ultimately have led to the huge trade deficits that took off three decades ago and have continued to balloon.

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  99 comments for “US Dollar Status as Global Reserve Currency Slides

  1. RepubAnon says:

    One wonders whether a BitCoin-type reserve currency would be possible. With adequate security, it would seem a neutral solution – where no one country could so easily use its leverage as the Reserve Currency to gin advantages.

    • Wolf Richter says:


      But wait… there are now over 2,300 different cryptocurrencies, and new ones are being added every day. In a few years, there will be 10,000 cryptocurrencies. Why limit yourself to just one? Why not just create millions of cryptocurrencies to be held by central banks as foreign exchange reserves? Imagine what my charts above would look like with millions of cryptocurrencies on them. It would be nirvana!

      • NamotoSAatoshi says:


        2300 crypto’s and 99.99% are mirror copy’s of the mother bitcoin, meaning that once bitcoin can be cracked by poor child in India, then the entire crypto universe comes down.

        I for long have wanted to see various crypto’s use various algos, but there has always been a guided hand keeping all these ‘clones’ corralled, the only one that is slightly different is MONERO, and that is said to have known NSA fingerprints, and questionable security because of the picks used in selecting the elliptic-curves.

        I think crypto is brilliant idea, but it needs to come from the real anarchist community, or some trusted party that’s not GOV, and not INTEL, and NOT army, …

        Today some +90% of bitcoin and clones is harvested by the Chinese, they own the mining, and they sell the mining hardware, much of the crypto is held by BABA&co in names like ant, Jack Ma just got appointed chairman of Tech for CP ( communist party ) making him second most powerful person in China, but also in control of most of the NSA crypto, then again most already understand that the origins of the original bitcoin 1997 white-paper came from BIS, and published by NSA.
        It would be quite cute indeed on the big picture if BITCOIN is adopted, yet owned by Chinese, yet engineered by BIS ( who work closely with China since 1940’s ).
        This would answer the rhetorical question here of Wolf, how doe China become reserve??
        Well if crypto did become reserve, then China would hold +90%.
        The funny thing is China would HOLD monopoly, but the NSA-BIS would hold the leash, so then you question what is real ownership?

        Sort of like all of US holding US-Dollars what are we really holding? Nothing

        • Neil says:

          Is this what’s happening ? Wow not shocked ?

        • Any number of crypto’s are feasible if they adopt transaction only currency. It’s just a matter of getting from point A to B. The idea of money (as a store of value) gets tossed. Crypto has the possibility to translate any goods and service into any other goods or service. A reserve currency facilitates the ability to run deficits, connect the dots and you see USG is in big trouble. Then calculate how the decline in new spending puts pressure on servicing debt on old spending, and then cut taxes, so you have no revenue to pay the interest.

        • robt says:

          If fiat currency is historically ultimately an inevitable fraud, cryptocurrencies are the potential fraud of frauds. They can’t even claim that the excessive input cost of electricity gives them value; that electricity is gone forever.
          The other problem is that cryptos are just a derivative of ‘money’, they are not money, except in limited acceptance. It is necessary to convert to, say, dollars then (hopefully) acquire the dollars by paying further transaction costs. I say hopefully because historical experience tells us that actual redemption can take days or weeks or … never.
          The defense of Bitcoin itself is, scarcity, that it is limited to 21 million circulation. But in fact when it is divided into its maximum granularity, there are 2.1 quadrillion satoshis in 21 million bitcoins, i.e. 100 million to the bitcoin. If a satoshi is worth one cent, then one bitcoin would be worth 1 million dollars, just like John said!
          As for the anarchist community (meaning i.e. the exchanges?) having control, first I can’t imagine them honoring any redemption if they didn’t feel like it, secondly what would they offer in redemption, and thirdly can anyone even identify the address of any of these exchanges, who aren’t even anarchists?
          For just one example, as of June 2019, the CURRENT given mailing address for Coinbase, one of the largest, is 548 Market st, SF. 548 Market St is the old World Class Mail store, with brown paper covering the windows, as it has since 2016. Actually, according to World Class, the mail drop was relocated to Beaverton, Oregon as of June 3, 2016. Maybe they still take mail in SF and reship it to Oregon, and offer to reship it or open and scan it and send it to the boxholder electronically. Other than that there’s no address for Coinbase. You can chat with Ada, the automated web bot, or you can phone them, wherever they are. The reviews regarding phone service are not good, mostly about redemptions. Depositing funds seems to be instantaneous after you offer every form of identification you possess along with a photo, withdrawing is often not so easy (!).
          If some form of exchanges are necessary to implement transaction of cryptos as a reserve currency, what are the odds of finding one you can have confidence in?
          As a transaction vehicle, just use a credit card, it’s 100 times faster and you even get points. And at least you have an address for them. Pay on time, and it’s ‘free’, except for the costs that the retailer (thus ultimately you) must bear.
          And the dollar will be around for some time to come, however debased it may become.

        • RagnarD says:

          The fact that so many are clones essentially eliminates crypto’s as a store of value. Thus the problem of the chain being hacked is not the main issue. The ISSUE is that it is infinitely replicable.

          As a transaction / currency medium, I don’t have a problem with crypto.

          But the idea of putting crypto in the same class as precious metals (store of value) is ludicrous

        • Zantetsu says:

          Bitcoin is a joke. It is limited to 7 transactions per second. You can’t even run a small town on that volume. The Lightning network is a joke. It requires an untenable degree of chain-watching to prevent fraud by every single client in existence.

          Some cryptocurrency will come along that could actually be effectively used as a global currency, but Bitcoin is not it.

      • polecat says:

        Wolf, regarding the possible plethora of cryptos in chart form ..
        I think you’ve just described a Jackson Pollock painting !

        • Erle says:

          Good one on evaluating JP as an “artist”.
          There was a late 50s or early 60s James Garner movie with Chill Wills that sent up the junk modern art rackets.

        • Gandalf says:

          “The Art of Love”

        • Pinto says:


          Had a good laugh! That is why I read wolfstreet!

          The only way I don’t feel lonely in this world wondering where I parked my spacecraft.

          I know some “modern artists” rackets with OPM, they say Michel Angelo was also criticized at the time.

          Present day we look at Michel Angelo art and we can see some kind of beauty.

          500years from now they will say 21th is the second dark age of mankind.

          Kind regards Erle

      • roddy6667 says:

        OMG, the Chart Porn!

      • Shizz says:

        I’m detecting a bit of sarcasm in Wolf’s comment… LOL!

      • kevin says:

        Bitcoin, and her plethora of crypto cousins, will NOT be valid nor secure currencies with its current design flaws.

        There is now a Zoo of new ICOs and forked versions and re-forked versions (“forked” sounds like another applicable word for the process too :) branching out like the Cambrian explosion of crypto-species, all of which are still subject to the same underlying and fundamental design flaws that was originally built into its DNA.

        Admittedly, blockchain and the Distributed Ledger was an innovative concept with some practical utility (e.g. in logistics and limited auditing applications), but it cannot ever function as a national (or international) currency.

        Those who bother to read the technical white papers will understand that the prototcols of the distributed ledger is full of exploitable loopholes.

        Despite being a tech guy, I have NEVER touched this obvious exercise in stupidity called Bitcoin, because 5 years ago, I had already realized (and warned all my friends) that with the advent of quantum computing, this BTC is likely to go the way of the Dodo bird.

        Chinese RMB is a sham, EU is in shambles, Pounds is risky now with Brexit looming.

        Stick to USD. It is and will be the only worthwhile world reserve currency for the foreseeable future, with the full backing of the world’s most powerful and technologically advanced military.
        No other country even comes close to US global dominance now.

        WS, please refrain from all these silly Peter Schiffesque USD collapse fear-porn, you are doing your readers a gross dis-service, instead of actually educating people.

        • Wolf Richter says:


          Where are you seeing in this article any “USD collapse fear-porn?” And my comment on cryptos dripped with sarcasm.

          However, what the article does show is how the mix of reserve currencies has changed over time, how the dollar’s share has declined in recent years, and how its share has moved going back decades, how the euro has failed to reach “parity” with the dollar, despite hopes 20 years ago that it would, how the RMB is struggling to gain traction, and how the yen’s share — surprising many — is rising.

        • kevin says:

          Ok sorry Wolf, if I misread your title as being collapse fear-porn.
          I’ve heard too many tiresome folks harangue on and on about the imminent of USD collapse.

          Those who consume the fear-porn cornflakes of Peter Shiff & gang every morning have been regretting it for the past 12 years and counting…. ouch.

          On the contrary, I see USD stronger than ever relative to the other basket of currencies.

          Your 3rd chart is more representative of the ground reality.

          USD is dominant by a huge margin and in fact, I’d say to readers who are observant enough, that this is probably a good time to get a bit more USD during its small dip.

          Oh…one more thing…my take is that US will win the trade war with China, for reasons that are too long to go into here.

          Just screenshot this and then come back say 5 years later and review the USD versus RMB to see if I’m right. Cheers

      • Mean Chicken says:

        “It would be nirvana!”

        Assuming total confusion is the goal (as it appears), you may be onto something.

      • cas127 says:


        Snark aside, the RepubAnon raises a valid issue – namely, given the ZIRP-abuse that Western governments have employed in order to obscure their grotesquely incompetent response to the rise of Chinese production…how long until somebody develops a global crypto-type currency that displaces the fiat toilet paper Western governments have used to survive for the last 5+ decades?

        Global savers have already endured the beginning stages of Western Dark Age economics – and almost all the fundamentals point to yields simply getting worse (ie, the “Rescue/Turnaround Plan” of huge incurred debts was always massive fiat fraud – note the spiking “media” coverage of the “viability” of negative interest rates…)

        Savers aren’t going to sit on their *ss for endless decades of this.

    • NamotoSAatoshi says:

      People really need to step back and let this sink-in, when talking of ‘bitcoin’.

      1.) SEC-P266K1 the algo used for the keys of bitcoin was developed by the NSA. SecP256k1 is an elliptic-curve, a very particular curve that was engineered by the NSA and nobody really knows its propertys, like how many master keys it might contain.

      2.) The encryption of the public-addresses used in bitcoin, and its every ten-minute block algo is SHA-256, another NSA creation, again this hashing ALGO is an unknown.

      If you know your history, then you know that every ALGO every released by NSA since the 1950’s ( think DES ), has had a NSA backdoor, they don’t take their stuff public, unless they hold back-door keys.

      Now jump ahead some 15 years ago an NSA gate-keeper name Satoshi dumps the code in public, using the same white-paper that the NSA had released earlier in 1997 called “A new digital currency”.

      Now for all those on the band-wagon, this is not going to end well, as its only a matter of time before kids in India are cracking the Sec256kp1 curve, and Sha256. Now that poor-mans quantum computers are becoming real, this stuff is going to be quite common. This is ok, because once the public can crack these NSA algo’s, then the NSA will come out with 512 bit algo’s, as they always have a solution in the waiting to a current crisis.

      But here’s the deal, the NSA left a trojan-horse, and much of the world has entered, but at the end of the day, if you don’t hold it, you don’t own.

      • Zantetsu says:

        The real problem with bitcoin is that proof-of-work is untenable for a currency, it is too costly and results in very low transaction volumes, too low for practical use.

        Your tinfoil hat stuff about the NSA and kids in India cracking these sophisticated algorithms only clouds the issue.

      • Jack says:

        I find your comment tasteless and based on a mind that watches and believe too much crap that Hollywood pukes through their production on the majority of mindless people!

        If the NSA have the keys to bit-shit why would a court order be handed down to Craig Wright to hand over the keys to his stash ( stolen or not bit- crap) ?!

        Wouldn’t the court be able to order an intelligence agency to submit to the law of the land?

        Or do you think they’re above the law?

        Please respect Wolf Street readership and take you comments to movi-land of someone who bask in conspiracy theories.

        • NJGeezer says:

          Dear Jack,

          You asked, “Or do you think they’re above the law?”
          Really? NSA, CIA, FBI.
          Unquestionably the most law-abiding institutions in the world.

    • medial axis says:

      Yes, the future of currencies is digital and I expect we’ll end up with a digital world reserve currency along the lines you suggest. As for security, bitcoin’s never been hacked[1] and because it’s an open system that anyone can join (to mine bitcoin or run a node or just inspect) it’s been open to attack for 10 years. That’s 10 years of hardening. 10 years of making it more robust. No other crypto comes near.

      Secondary layers, such as the Lightning Network (LN), have been build on top of it (bitcoin’s not aware of them). They gain the same security as bitcoin while adding speed[2] or whatever it is they want.

      Anyone (including central or world banks) who wants can build their own secondary layer on top of bitcoin or, if they wish, they can build their own system from the ground up – but why would you?

      [1] There was a bug in the code found in 2010 (which led to overflow) that was quickly fixed. Not sure if that’s counted as a hack.

      [2] Bitcoin updates its ledger about ever 10 mins. It’s slow but that buys robustness, you cannot have both on a decentralised system, it’s an engineering trade off. Also, the LN can do near unlimited txs with each at the speed near that of email.

      • Petunia says:

        I don’t know how you can say Bitcoin has never been hacked with all the thefts that have been reported. I stopped counting years ago.

        • medial axis says:

          I suggest those reports are about exchanges being hacked for their private keys and those keys then being used to move the bitcoin to the hacker’s bitcoin address. It’s much like some online vendor being hacked for the credit/debit card details it stores and using the info to move money out of customer bank accounts to the hacker’s bank account. It’s no more bitcoin’s fault the exchange has poor security than it is the dollar’s fault the vendor has poor security. The dollar’s not been hacked and neither has bitcoin.

      • Zantetsu says:

        The lightning network is a joke. It places untenable demands on clients to watch the block chain constantly to ensure that the close transactions have not been issued. They only work as long as people are willing to ignore security of their funds, which early adopters appear to be willing to do, but this will not work in the long term.

        Also you have to sequester funds with everyone you ever want to transact with. That is also untenable. And if you want to try to take advantage of their pay-peter-through-mary feature, you have even more transactions to watch for on the chain.

        It’s terrible. It will not hold up. Only those desperately wanting Bitcoin to hold or grow in value will continue to use it.

    • c1ue says:

      Cryptocurrencies are a solution without a problem.
      The primary benefit of a fiat currency is that a nation is able to “borrow” from all of its current currency holders by issuing more fiat.
      How then would any such nation (which is all of the present ones) be willing to allow the existence of a store of value which said nation cannot directly tap?
      Only countries that are recipients of capital flight (i.e. US) would be willing to ignore the above structural problem of cryptocurrency.

      • d says:

        Cryptocurrencies are a solution without a problem.


        Intheri current fraudlent format. They are a bad solution, for the serious problem, of state abuse, of the fiat currency system.

        greece is still in the EUR and the EU even though this hurts its citicens financially, as the citicens of greece finally have a currency, the greek government can no devalue to nothing at their whim. They are not going to give that up without a serious fight.

        Which is why the EU is having a pink fit over Libra. As Libra would be a fully convertible international currency, within the EU, which the EU would have no control over, that their banks would not even be able to generate transaction/conversion fees/spread’s, from.

        Currency union without fiscal union is an insanity.

        An insanity the EUR can not long term survive.

        Which is why the EU is still grinding slowly towards Fiscal union. The 2008 event severely handicapped its pace in this combined with the “More European Integration” response from brussels to the 08 event (Which gave rise to much of the EU and Euro scepticisim we still see today) it is stuck at the incomplete banking union and EU bonds.

        Mainly as the Club Med banks are not willing to resolve their NPL Mountains at their true Values. Whilst the norther banks and central banks are not willing to use their shareholders and taxpayers funds to resolve the issues at the ridiculous values placed on the NPL mountains by Club Med. Which is also why the $ US faces and will face, no real threat for at least the next decade, to is supremacy as teh Global reserve note.

        Libra is such a concern to the Eu as Facebook is big enough to make it happen, size and trust are the two main elements of a global reserve currency. Which is why CHF is not a threat to the $ US, as the Swiss Economy is simply not big enough.

  2. mike says:

    A monetary system based on a currency with imaginary value, which has value just because the gullible still believe in it: that is what we already have! We do not need a BitCoin-type reserve currency based on imaginary value which would prevent creation of more “value” with imaginary-value currency: how would the US government pay for anything?

    I wonder who has the most easily sunk economy: Germany is export dependent, like Japan, and the rest of the EU is in dire financial straits. Their banks are almost as bad as US banks run by banksters, and I understand, linked to them. Their collapse may cause a collapse of the banksters here.

    China has entities with crazy debt, albeit not the hundreds of trillions in derivatives (potential) debts of the US banksters. However, before any public collapse, they will be quietly taken over by their government. Any Chinese investors that object too loudly at the loss of their life savings may find themselves in reeducation camps, i.e., prisons. (Of course, that is if the pressure does not get so great that the communists lose power.)

    The US, with federal liabilities of over $124 trillion and gigantic other liabilities if you count state and local governments, will definitely not be able to meet its obligations, particularly if we cannot print or electronically create dollars to pay foreigners. It is a race to see who will collapse first, so let’s encourage China to win. The Chinese communists will be good sports.

    I am just glad that the US has significant resources and produces enough food that a collapse will not be that final. I am also hoping that we will treat the banksters the same way as the French treated their corrupt crooks during their revolution.

  3. Joe says:

    My faith in crytocurrencies is the same as the coins that I collect in video games, absolutely worthless.
    Will not get suckered into the if it isn’t solid, it doesn’t exist.
    An extended power failure, EM pulse or hacking…
    They say it is impossible but anything on a computer can be hacked or manipulated if you know how.

    • Craig says:

      Joe crypto certainly can be hacked(it’s called 51% attack) but any computer information stored on optical media (CD/DVD/Blu-Ray) or even tape is safe from an EM pulse.

      Taking out any kind of information that is backed up in multiple locations takes global EMPs.

      The power grid will probably go down and leave it trapped before it’s lost.

      • Joe says:

        The servers or origin of the crytos mining site would making their data totally open to a permanent shutdown should an EMP as their data is totally in a digital form.
        Trying to retrieve it on your computer would be effected then as well.

    • D Hata says:

      Google recently released a paper detailing their new 56-qubit quantum computer. And they are adding more qubits all the time. Quantum computers can and always will be able to break any “silicon computing” encryption. This means logically that if we continue down the road of crypto, anyone who has quantum computing capability – realistically, only mega-corporations perhaps aligned with state power – will be in effective control of the whole scheme, giving them the ability to monitor all transactions, remove anyone’s credits at will, etc. Crypto currency is a trap. Interesting to note that within a day or two of publishing the paper, Google took it down, once people started putting 2 and 2 together.

      • c1ue says:

        The quantum computers will have to get to 1000 or more bits before that is possible.
        And even once they do that, there is the enormous (and possibly insoluble) problem of figuring out how to test algorithms which have a surface area of 2exp1000 – which makes a million monkeys on typewriters for a million years look like basic arithmetic.

    • Vespa P200E says:

      Cryptos are WORTHLESS when there is no power and not tangible. It’s what CBs, globalists and politicians want for the sake of easy to float with few keystrokes and complete CONTROL.

      One can say it was all prophesied in the Book of Revelation about needing some kind of “mark” to buy and sell as for security and full control has to submit to some kind of biometric.

      As for me keep on stacking gold and silver coins, the real reserve, and may I dare to say global currency of choice for 5,000+ years.

  4. ZeroBrain says:

    Kyle Bass had two interesting recent interviews on China. His thesis is that they desperately need dollars to purchase the raw inputs to their economy, but these dollars are increasingly difficult to procure as their balance of trade falls due to the post-2015 rebound in energy prices, massive increase in energy use (+45% in 4 years), and now tariffs cutting into the surplus. Meanwhile, no one wants their RMB – so the dollars are a must-have and thus Kyle expects them to devalue further. Presumably this devaluation would further reduce its desirability as a reserve currency.

    This all comes with the asterisk that he’s changed his mind on the widowmaker trade after years of being wrong.

  5. James Levy says:

    The simple fact which is endlessly avoided in the MSM is that for the dollar to remain the world reserve currency, either the US has to run massive trade deficits or it has to invest massively overseas. There is no other way for huge amounts of dollars and dollar-denominated assets to circulate as widely as they do so they can be held in reserve by other nations and foreign institutions. The real question is, who benefits from this system, and how widely is that benefit distributed in American society? I think that the answer is complex and confusing, so it is basically ignored.

    • Jonathan Vause says:

      why is the answer confusing? if there are net financial inflows to the US, all Americans benefit if those assets are invested productively (in new capital assets that generate a return higher than the original investment, because the economy grows and there are more jobs and tax revenues to the government, etc), and if they are invested unproductively in asset price bubbles (ie stock and housing markets), then the winners are the previous holders of assets, and the losers are the foreign buyers who end up overpaying as well as all Americans who are affected from the fallout when bubble bursts (see: 2008). yes people do avoid talking about this, but it’s not complicated. the only question is to what extent is foreign capital invested productively, and I think it’s clear the answer is, mostly it isnt, because it’s money seeking a relatively safe haven, not money noticing a genuine investment opportunity

  6. NARmageddon says:

    The name “Foreign Exchange Reserves” is the common name, but it is such a confusing misnomer. It really means “Central bank reserve balances that are owned by foreign banks and governments”.

    To clarify: The US Fed holds USD-denominated reserves owned by domestic banks and the US Treasury. It also holds USD-denominated reserves owned by foreign banks and foreign governments. Central banks of other countries operate in the same manner.

    Additionally, some substantial amount of currency (“paper money”, dollar bills, euro bills, what have you) is in foreign hands. This is especially true for USD, and the amount of such foreign-held USD currency has increased rapidly, especially in the last 10 years. Part of the reason is all the unjust economic sanctions that the US Government imposes, starting with refusing many countries the ability to settle trades in USD, a settlement that always depends on said country being able to hold reserves at the NY Fed. As a result of the sanctions, many countries must settle their USD trades in alternative manners. The settlement often takes the form of transferring claims on parts of bales of USD $100 bills held in foreign vaults. Or outright transfer of stacks of dollar bills. The USG is also not beyond outright confiscation of foreign-owned reserve balances as has happened to Venezuela.

    Back to the main topic: One of the main reasons the rest of the world wants to get away from the USD as the main reserve (payment) currency is that they do not want their ability to trade to be controlled by the US government.

    • Wolf Richter says:


      It seems you’re throwing assets and liabilities all into one pot. For example, US paper dollars are a liability on the Fed’s balance sheet (“currency in circulation”). But if the Fed held paper euros (I doubt it), it would be an asset on the Fed’s balance sheet.

      The reserves from the banks that the Fed holds are liabilities on the Fed’s balance sheet (cash that it owes the banks). But they’re assets on the banks’ books.

      Foreign exchange reserves are assets, not liabilities, on the central bank balance sheets.

      • NARmageddon says:

        >>Foreign exchange reserves are assets, not liabilities, on the central bank balance sheets.

        Aha, I think I understand what the sticky point is. You think of the foreign exchange reserves of country X with respect to country Y as being held as an asset at the Central Bank of country X. I say they exist as a foreign-owned reserve balance at the Central Bank of country Y.

        In some philosophical sense you might be able to argue both ways. BUT, in practice, country Y will not let country X settle payments in currency X with third country Z without clearing it through the country Y central bank. Moreover, country Z would be foolish to accept any other arrangement, as it would exposing itself to possible fraud. Therefore I think it is more sensible to think of foreign reserves of X in Y as residing in foreign country Y(*).

        So I think we are probably in agreement.

        (*) Case in point, as relates to Gold reserves, Germany has been repatriating physical gold reserves from the US in recent years. If the gold already was in Germany, no repatriation (shipment) of gold would be necessary. Debt-based foreign exchange reserves should work the same way: The reserve balance is held in the country of issue for the specific foreign currency in question.

        • NARmageddon says:

          TYPO: (surrounded by underscores, as in _TYPO_)

          country Y will not let country X settle payments in currency _X_ with third country Z without clearing it through the country Y central bank.

          FIXED: (surrounded by asterisks , as in *FIXED*)

          country Y will not let country X settle payments in currency *Y* with third country Z without clearing it through the country Y central bank.

          This whole thing being logically somewhat complex, it did not help that I made a typo. Hopefully no more typos.

  7. Just Some Random Guy says:

    Last time I was in Europe I was paying about $1.25 for a Euro. I’m going to Europe next month, I should be paying $1.10.
    Dollar seems plenty to strong to me. But what do I know?

  8. bungee says:

    the new reserve is the same as the old reserve. Its gold.

    As for the article, im still not convinced the yen and the euro are proof positive. Maybe its emphasis on the world reserve currency that demands a trade deficit? If everytime you print money, some foreigner is willing to give you stuff so they can hoard your money…. Well what do you thinks gonna happen? Imblances thats what.
    The yen, even at #3 is still pretty minor and the euro is a unique currency in that it isnt tied to a nation and doesn’t have any employment mandate. So it can drag greece along without changing course politically. It seems impossible (to me at least) not to have a conflict between foreign and domestic monetary policy when the whole world saves in your debt. The rest of the world sends you stuff, you give that to your people to buy support. Why make your people pay those debts through work when you can print? The politics are too strong.
    When the dollar finally breaks the world won’t allow such a lopsided system to happen again.

    • Mickey says:

      I am throwing in a comment anywhere at random since as I read this few really understand cryptos. Perhaps nobody. And i certainly do not claim to.

      So much unknown. like in a global panic over fiat, how do you sell when fiats are crashing.

      That not dissimilar to holding paper gold. except there is no real asset backing cryptoi. Yes, perhaps digital gold, but thats still held by a third party.

      This is a great debate if we did not need to type all comments.

  9. DR DOOM says:

    Oil ….Oil ….Oil , denominated in treasuries is the key stone. Also there is this silly notion that a “basket” of currencies collectively could be a substitute for the de-throned King Dollar in the future. This would be a nightmare. A gold back fractional trade note for international settlements is the only stable workable alternative. I believe this is why the CB’s of the world are increasing their gold reserves. Domestically buying a quality repairable product will be in our future and landfills for waste will not fill up as quick. We will have to re-industrialize to some degree. We will be a better country for it ,including the environment. King Dollar could hang around longer if our government would quit using it as a weapon. George Kennedy described Luke in the movie Cool Hand Luke as a “natural born earth shaker”. It will take a natural born earth shaker President to guide our country thru this change. Donald J Trump is what change looks like. Change IS A BITCH.

  10. Augusto says:

    I wonder how much of the downward trend in USD usage relates to the fall in oil prices from 2014? With Oil exchanged or traded in USD’s, the fall in oil prices since 2014 and therefore subsequent reduction of USD’s needed to trade that commodity may explain some of this downward trend?

  11. MC01 says:

    Am I the only one who’s really really intrigued about the Japanese yen?

    Who could be increasing his yen reserves at that pace (very fast as far as currency reserves go) and for what reason? After all the yen is in the same spot as the Swiss franc: the target of constant, albeit ultimately unsuccessful, devaluation attempts aimed at boosting exports. I remember the Bank of Japan already targeting 120 yen to the dollar before heading to the Uni, a lifetime ago. Very very weird.

    • d says:

      “Very very weird.”

      Yes and no

      NO = Volume Yen in circulation is rising, as is volume yen dom T notes, so yen rises as a percentage in trade partners reserves as it is still a haven currency.

      YES = BOJ has fought yen becoming a strong reserve currency since the late 80’s this rising yen % situation is very much what BOJ DOES NOT WANT to see.

      One would need to dig through the trade data and see who is increasing their trade Surplus with Japan also perhaps the Answer is there.

    • d says:

      “Very very weird.”

      Yes and no

      NO = Volume Yen in circulation is rising, as is volume yen dom T notes, so yen rises as a percentage in trade partners reserves as it is still a haven currency.

      YES = BOJ has fought yen becoming a strong reserve currency since the late 80’s this rising yen % situation is very much what BOJ DOES NOT WANT to see.

      One would need to dig through the trade data and see who is increasing their trade Surplus with Japan also, perhaps the Answer is there.

    • Petunia says:

      This is only my opinion, HK is dead as a money center. This leaves Japan, which is already an international money center, as the substitute for HK. Anybody holding HKD will be dumping/exchanging as much as possible into USD which right now are in short supply, or into the next best thing nobody is looking at yet, Yen.

      • MC01 says:

        If you look at the charts, you’ll see that this trend goes back to 2016: central banks the world over have started to accumulate yen in their digital vaults at an unusually fast pace.
        This has nothing to do with Hong Kong (whose demise as a financial center has been greatly exaggerated): this means somebody in charge of currency reserves think the yen is the least dirty shirt in the laundry bag. Baffling, I know, but perhaps this is due to the fact that the Bank of Japan has already run out of crazy monetary ideas since they were the first to implement them. In short the BOJ may be seen as having hit rock bottom while everybody else is busy digging to the center of the Earth. Let’s hope the Morlocks will get the whole lot of them.

  12. Tyson Bryan says:

    The net half life of all the currencies shown in the chart combined, is now only 10 years. This half life figure has been dropping steadily year to year for decades. A 10 year half life is a new record low. The “race to the bottom” is a driving accelerator of this decline. The figure is likely to hit 9 years by the end of 2020, maybe sooner.

  13. Joe says:

    The biggest factor for Reserve Status is trust.
    It doesn’t matter how much US dollars are created, if nobody wants to use them, then they are just printed paper with no value to the countries or companies opting out.

  14. Dave k. says:

    Our dollar will stay strong as long as people know Blackhawk helicopters, warships and hungry Marines back it.

  15. gustav says:

    Good for you Wolf for not buying into the “Triffen dilemma” nonsense. Germany and especially Japan also disprove the idea that you have to destroy a currency to be a successful exporter.

    • gustav says:

      *…doesn’t have to devalue against the importer currency, that is. Clearly all fiat currency are being overinflated against tangible things.

  16. Paulo says:

    Did the Pound Sterling recede from World Currency status because the UK was in decline, or did the UK decline because of the Pound Sterling fall? I suppose this could also be asked of Spain, Portugal, Holland, etc?

    The obvious connection is that all of the above reflect simple Colonial Imperialism, and as the article points out, a hegemonic mindset. As the US increasingly (and openly) fights against the rise of China, it seems pretty obvious this gentle trajectory is highly feared by some.

    The current debt levels and defecits, World unrest and open hostility and distrust towards the US by once allies, (for me), is more of an indicator of the future than this charted slow decline in the article. For instance, how will Afghanistan be wound down and when? Will US troops be hanging from skids while the Taliban marches forward? Will the support of MBS and Saudi Arabia blow up, literally? Will infrastructure week finally get started, and paid for how? As the US slides ever onward into that stagnant Class ridden society the recent university entrance scandal so aptly displays, as well as the wealth of the 1% vrs everyone else, what was once a vibrant land of anything possible (1950-1970?) seems to be a distant memory. The currency decline will mirror reality going forward, imho.

    The season is Fall. Yesterday, I mowed the lawns the last time in 2019 and my wife will start hauling leaves over to the garden where I will run them through the shredder. I reflect back on the rise of the Dollar after WW2 and where the Country is after almost 300 years and conclude it is in the same place we are, in Fall; composting, shredding, and hoping for good weather next spring. My only questions are, since all Countries are in such terrible economic over-reach (my country Canada, included), will this deline and eventual collapse be a contagion…an economic ebola spread by Globalism, and will we perceive wealth and stability in an entirely different way going forward? My other questions are more personal and much more direct. Got preps? Flexibility? A Plan B? This merry-go-round seems to be speeding up.

    • Tom Pfotzer says:

      Well-done, Paulo.

      The pace does seem to be quickening, and the nations / tradingBlocs are moving in concert…against one another. This truly is a race to the bottom, and just about all the players are all-in.

      A Plan B would be great to have. They also happen to take considerable time to implement. I still have significant work to do to perfect my situation, and I’m shedding non-essential activities till its done. The tenor of the dialogue, the severity/sudden-ness/rancor levels have clearly intensified.

      To MC01…I was also wondering about why CBs would be holding Yen. Japan’s exports are still declining…are there any sort of agreements among CBs that would dictate their allocation decisions?

    • Anon1970 says:

      “Did the Pound Sterling recede from World Currency status because the UK was in decline”

      Yes. Britain’s status as a world power was hit hard by economic losses caused by its participation in two world wars. Its large scale withdrawal from its former colonies and mandates started in 1947, when India and Pakistan were given their independence. Widespread food rationing in Britain during and after WWII only ended shortly before the Queen’s coronation in 1953.

      The US appears to be doomed to a similar fate. We don’t have food rationing in the US but millions of Americans are considered food insecure especially when their food stamp benefits run out before the end of the month. Having grown up in Canada and now living in the US (the reverse of your case), I sense that the economic gap between the two countries has narrowed if not closed entirely for the typical household. In the 1960’s, prices appeared to be much higher in Canada and wages lower than in the US.

      The US has paid a very heavy price for trying to be the world’s policeman. The estimated costs of the Iraq-Afghanistan wars are far greater than the the current amount of student loan defaults. Now that I am in my 70’s, I suspect that old age will get to me before a collapsing economy.

      A few years ago, I re-read John Galsworthy’s book “A Man of Property”, which had been required reading when I was in high school. The one take away that really surprised me was how much inflation the UK has had since late Victorian times.

  17. Winston says:

    When the Euro goes away some time after Brexit and the collapse of the EU, whose currency will benefit? The US dollar or the RMB of the habitually lying totalitarian police state?

  18. unit472 says:

    A reserve currency must allow its holder to buy most anything, anywhere. With US dollars you can buy a skyscraper in New York ,shares of JP Morgan of a Malibu mansion. Its even preferred over local currencies abroad. One can do pretty much the same with Yen, Sterling or the Euro but the Renminbi struggles with the one party dictatorship of its issuer. Property is simply not secure in China. It can be confiscated and its possessor executed if he runs afoul of the state.

    The Euro can’t achieve the dollar’s status because the EU doesn’t have complete control over it member states. The dollar is backed by “the full faith and credit” of the United States. The EU can make it difficult and expensive to leave its currency union not impossible. It also has trouble even enforcing its own rules thus its value vis a vis the dollar is slowly eroding.

  19. HR01 says:


    This observer looks at this differently. The renminbi has no business being labeled as a reserve currency. China’s financial system is run by rank amateurs. Witness the ongoing gyrations in SHIBOR. Last week over the full five sessions, SHIBOR dropped 144 basis points. Yesterday they jacked it back up more than 138 basis points.

    So take away renminbi and the buck hasn’t moved much.

    Speaking of amateurs, the Fed appears to have one in charge at the NY branch. Short-term funding issues still persist. Effective Fed Funds printed at 1.90% yesterday and SOFR jumped 53 basis points to 2.35%.

  20. Nicko2 says:

    For the rest of the century, all real growth will be in Asia and Africa (and parts of MENA). Invest there, you can’t lose.

    • Mean Chicken says:

      I don’t disagree about Africa, where do environmentalists fit in?

    • Bobber says:

      You could get your head cut off at an investment meeting, when a rag tag militia storms the office.

      • Mean Chicken says:

        Colotoral damage, the fat cats will be isolated in their factory air conditioned factories behind their desks where they belong.

  21. RD Blakeslee says:

    “… the future of currencies is digital and I expect we’ll end up with a digital world reserve currency …” -medial axis

    There is also speculation that gold may become the world reserve currency. Banks hold a great deal of it:

    Basil III doubled the fiat price of gold held in bank reserves. A first step toward fiat parity and increased utility as a currency?

  22. Ishkabibble says:

    Fiat, printed-out-of-thin air USDs go hand in hand with PERPTUAL WARS. In other words, unlike a gold-backed currency, these “USD”, of literally infinite number, are ABSOLUTELY NECESSARY in order to “fund” the expenditure of hundreds of billions of “BORROWED” USDS, year after year after year, for the forever-wars and the military-security-industrial complex which manufactures its destined-to-soon-be-obsolete-and-must-be-replaced implements.

    Don’t believe little old me? Take it from an expert. George Kennan was an influential US VIP for many years. He said the following only four or five short years before the end of the Soviet Union.
    “Were the Soviet Union to sink tomorrow under the waters of the ocean, the American military-industrial establishment would have to go on, substantially unchanged, until some other adversary could be invented. Anything else would be an unacceptable shock to the American economy.”

    Read the last sentence of the Kennan quote about 10 times before you read on, because at the time he said it, Kennan meant EXACTLY what he said: and ever since the USSR’s collapse, Kennan’s prediction has been time and time again PROVEN to be absolutely true. What we average people have an ABSOLUTE DUTY to fully realize and fully appreciate is that what Kennan said is EVEN MORE TRUE TODAY than it was in Kennan’s time. After the USSR collapsed to “The Russian Federation”, the US had LITERALLY no other choice than to CONTINUE its rampage around the world or the US economy would then, and would now, suffer a severe “economic shock”.

    The US is going deeper and deeper and deeper in debt to fund what? Perpetual war. That’s right. The “treasury” needs to sell more and more bonds to more and more domestic “investors” in order to fund perpetual, ever-exanding WAR.

    The US economy is literally addicted to the military security industrial complex that has entwined itself into every aspect of the US economy.

    The people who depend upon that trillion-dollar expenditure year after year after year, forever, are not going to vote for any peaceniks. They’ll willingly risk nuclear war rather than lose their jobs.

    They need to hear someone tell them of a detailed, peace-based system in which they’ll still have a job. They want to make bullet trains rather than bullets, but they will not vote to lose their jobs. Until they hear that description, they will continue to vote for politicians who say that Russia, China, Iran, etc. etc. are enemies that require the maintenance of the Complex.

  23. Lisa_Hooker says:

    In the late 1980’s, shortly after being appointed chairman of the US FRB, Alan Greenspan’s television viewing was interrupted by a Doritos commercial. At it’s end Mr. Leno said “Eat all you want, we’ll make more!” Dumbfounded, Mr. Greenspan exclaimed “Eureka! That’s it!” The rest is history.

  24. RoundAbout says:

    With the rise of quantum computers, I’d stay away from all crypto currencies. Virtually all classical methods of computer security are going to be obsoleted. Also, if the electricity is down, your not going to be able to transact the crypto currency anyways — and your expecting a crisis right?

    • c1ue says:

      Quantum isn’t magic. There are still minimal requirements before quantum can even theoretically attempt decryption of modern systems.
      Among the major problems:
      1) You need at least 1000 qubits, likely more, to use quantum on modern computer systems. We’re at 53. And having more qubits isn’t just stringing “qubit blocks” together.
      2) Even if/when 1000+ qubit become available, you have to actually program and test decryption algorithms. With 2exp1000+ possible outcomes, this is a completely insoluble problem with anything known today. As I alluded to in an earlier comment – 2exp1000 makes the million monkeys on typewriters for a million years look like basic algebra.
      3) Not all of the systems are even theoretically vulnerable to quantum. Only the ones that rely on big prime numbers.
      4) Access. Unless 1000+ qubit computers become as common as the PC in 1995, or even 1985 – the culprit for any successful crack would be pretty obvious. There are a lot of reasons to think that 1000+ qubit computers, even if possible, just aren’t going to be very plentiful.

  25. c1ue says:

    USD as a percent of reserves is one factor, but I wonder if USD global reserves as a percentage of World GDP might be a more interesting metric.
    Some background: the US debt has skyrocketed in the past decade plus – with well over $1 trillion per year added to the national debt.
    US national debt in 2007 was $9 trillion vs. $4.8 trillion in total global foreign exchange reserves (2008 data, couldn’t find 2007).
    Today, US national debt is $22 trillion vs. $11.7 in total global foreign exchange reserves.
    The $9 trillion in debt in 2007 was vs. $3 trillion held by foreign central banks – while the $22 trillion in debt in 2019 is vs. $7.2 trillion held by foreign banks.
    The ratios are similar between 2007 and 2019, but of course the absolute delta is enormously larger. World GDP was 57.86 trillion in 2007 vs. a projected $88 trillion in 2019; the USD reserves as a function of world GDP was 5.2% in 2007 vs. 8.2% in 2019; overall reserves were 8.3% of world GDP in 2007 and 13.3% in 2019.
    There has to be some limit to how much the rest of the world can hold in dollar reserves, as well as reserves period?

  26. Portlander says:

    I agree with commenter Kevin in one respect: the stronger dollar makes the comparison misleading. Show us a chart with constant-dollar adjustments and it may show a different story.

    The reason being: US dollar deficits help fund Euro and Asian growth, increasing their surpluses, which are recycled into dollar-denominated reserves, keeping the dollar strong. So, the US trade deficit helps fuel others’ surpluses and ability to store them as dollar reserves.

    It all starts with the US trade deficit, due to dollar reserve currency status, which can and probably will continue to be the driver of higher dollar holdings abroad in percentage/constant-dollar terms.

    But I agree with Wolf that Trump won’t win the Trade War, and we shouldn’t want him to. Like Smoot-Hawley in 1930, the trade war could just deepen the global recession probably now underway. This in turn will unleash even more global conflict.

    Arguably, US trade deficits have helped keep world peace over the last 30 years, but at the cost of growing division (lost jobs) within the US.

    • Wolf Richter says:


      Concerning: “the stronger dollar makes the comparison misleading. Show us a chart with constant-dollar adjustments and it may show a different story.”

      These are comparisons between currencies.

      Today, USD = 107 JPY; back in 1996, when I first went to Japan USD = 110 JPY. But there were fluctuations in between.

      Today, EUR = 1.09 USD, back where it was in 2003 and several times in between. But it has also seen a fair amount of fluctuations.

      So over the long term, the big three reserve currencies have been within a very stable band compared to each other.

      • Lisa_Hooker says:

        I’m old enough to remember when a dollar got 240 yen. Then again there was a time when a British pound cost 5 US dollars. Who is next?

  27. Seneca's cliff says:

    Just because there is no rising currency to take its place does not mean that the dollar can not fall from its pedestal as the Reserve Currency. We could be entering a time ( which has happened frequently in history) where global trade breaks down and no one currency is really trusted widely around the world. We are entering a time when it looks like the petro-dollar could be falling apart, the U.S. could be losing its effective military dominance and long held alliances are falling apart. I could see a time time in the not distant future where the RMB becomes the favored currency in most of Asia , the Dollar retains its dominance in North and South America and The Euro being the reserve in Europe, with Africa up for grabs.

  28. China being a major export nation probably doesn’t rate much in the way of offshore reserves? Declining US reserves vs expanding trade deficits? How do declining reserves impact US government spending? (ability to sell Treasuries) How do declining reserves affect availability of dollars for dollar based bond issuers outside the US? Is the blowback what we are seeing in Repo, and can other than US entities access the Repo market?

  29. LouisDeLaSmart says:

    It is interesting to notice that the cartel agreement of the Central banks “Washington gold agreement” to dispose of gold in a limited and controlled fashion was not renewed. It is a big deal as it was a way to keep FIAT currentcies artificaly inflated in respect to precious metals (I am sure there are other methods to do this as well I am unaware of). I think (just a superficial thought) the change in FIAT is negligable because there is a rush on gold as a parallel reserve currentcy.
    Sometimes “no change” means you are looking at the wrong place.

  30. medial axis says:

    People aren’t sat on their backsides waiting for quantum computing to take off before they set about finding algorithms that quantum computers cannot break or cannot solve in reasonable time. Which is just as well as not only crypto-currencies but the banks, governments, military etc rely on cryptography too and likely use similar algorithms, but you knew that didn’t you.

    If you’re interested in more, search for “Post-quantum cryptography”

    • Lisa_Hooker says:

      A “one time pad” is the only encryption that will always be secure. If it is totally random. Pads may be securely distributed by quantum communications systems.

      • c1ue says:

        That’s not true.
        For sufficiently large number of qubits plus functional software – both very far away if even possible – it is possible to try brute force solutions to find the plaintext output.
        Of course, there will be all sorts of collisions – but that’s the whole “a miracle occurs” part of any large scale quantum cryptography.

        • Lisa_Hooker says:

          Sure. And given a sufficiently large random data block a quantum computer can decrypt all the works in the Library of Congress from the single block. To what end?
          Perhaps the ability to create “evidence” of whatever they want?

  31. RagnarD says:

    If the USD is not backed by anything, and the Yen, Euro, RMB, etal.,
    hold USD dollars to back their currencies, this is all essentially a house of cards, no?

    And it puts the lie to the talk of a country removing their support of the USD, so long as the main support / backing of their currency is that very same USD.

    Thus, only if a currency is sufficiently backed by something independent of the USD (ie gold), can it be free from the USD.

  32. sierra7 says:

    One commenter replied that this (para) “….is not a complicated issue!”
    The average global citizen is light years away from the thinking represented by so many of the learned commenters!
    Most are deeply worried about the price of “bread”, shelter, personal safety, their childrens’ welfare…..etc.
    To those who practice the functions of our global economic systems it may not be “complicated”; to those who live the lives themselves it is complicated reduced to the simplicity of the daily terrors of having to navigate the system itself.
    The “dollar” will be dominant unless the “mailed fist” fails or the internal economic/political/social system here in the US completely fails.

  33. Kasadour says:

    America is in decline morally, spiritually, politically and economically . . .

    • RagnarD says:

      Do you consider any countries to be ascending in the above categories?

      • d says:

        Should he replace America with Humanity, he would have a truism of grave proportions.

        • RagnarD says:

          Perhaps. On a morality basis, I’ve heard that the post communist countries of Eastern Europe are supposedly doing pretty well.

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