> People would trust China for the same reason
I don't necessarily disagree, but can you explain why you think it is, that people keep trusting powerful states which keep giving plenty of reasons to not be trusted?
I don't necessarily disagree, but can you explain why you think it is, that people keep trusting powerful states which keep giving plenty of reasons to not be trusted?
But we're talking about what you can trust a government to do here. It matters even if you're indifferent to morality or politics. It's very much relevant to making money, too.
You can see that clearly now with how the EU completely messed up their negotiations with Trump regarding the tariffs.
If you are an investor and you are given the chance to invest in two companies, one of them located in a country that is not afraid of throwing it's weight around to get things done or defend it's interests and the other who might have a better record in terms of human rights but doesn't want to appear too aggressive, which one do you pick?
If the only thing you care about is ROI then the answer is easy. Is it right? Probably not but that is just the world we live in and the system that we are all part of.
Obviously this is a simplified example but you get the gist.
Personally I think that the problem with the USD is that it can be used as a weapon against other countries. Why would China risk being cut off from the global banking system like Russia was? It simply makes no sense.
Cutting Russia from SWIFT was major mistake.
It only reinforced what China and other countries already knew, that is, that it can be weaponized in an instant. That in turns means that we should see a decrease in the USD dominance and a shift away from the traditional big players like SWIFT in favor of other home grown systems like CIPS.