Looking eastward
Posted: July 16th, 2021, 8:07 am
With Biden in effect having given the UK the middle finger, to favour jumping into bed with Germany, Ireland, (EU), I've been looking around at alternatives to the US$ and Russia pricks ears. Forward dividend yield of 7.5%, Price to Book of around 1.2, single digit PE.
Given the perceived Russian political risks the UK might be well placed to form a UK/Russian accounting/law/financials alliance with Russia. If so, then the dominance of the US$ on the American TINA assumption ('there is no alternative') might see the range of similar potential alternatives having one more commonly agreed as a accepted alternative. Presently there are a range of currency baskets or agreements, such as China/Russian acceptance of each others currencies as primaries and other baskets of currencies such as Arabian multiple-currencies. Not that far off seeing potential agreement of the merging of those being more broadly accepted as being a acceptable primary reserve 'currency'.
American dominance is fundamentally a consequence of breaking its promise to act responsibly, where others accepted the USD becoming the primary reserve currency instead of gold based on such promise. But where instead the USD printing presses facilitated paying for the likes of a large military capability. In the absence of unlimited print/spend (if no longer considered as being the commonly accepted primary reserve currency) then that likely would see a large scale flight out of USD's. Perhaps declines similar to what the UK endured when it lost the Pound being a primary reserve currency in the earlier 20th century or during the 1970's (high interest rates/inflation, considerably lower valuations ...etc.).
Given the perceived Russian political risks the UK might be well placed to form a UK/Russian accounting/law/financials alliance with Russia. If so, then the dominance of the US$ on the American TINA assumption ('there is no alternative') might see the range of similar potential alternatives having one more commonly agreed as a accepted alternative. Presently there are a range of currency baskets or agreements, such as China/Russian acceptance of each others currencies as primaries and other baskets of currencies such as Arabian multiple-currencies. Not that far off seeing potential agreement of the merging of those being more broadly accepted as being a acceptable primary reserve 'currency'.
American dominance is fundamentally a consequence of breaking its promise to act responsibly, where others accepted the USD becoming the primary reserve currency instead of gold based on such promise. But where instead the USD printing presses facilitated paying for the likes of a large military capability. In the absence of unlimited print/spend (if no longer considered as being the commonly accepted primary reserve currency) then that likely would see a large scale flight out of USD's. Perhaps declines similar to what the UK endured when it lost the Pound being a primary reserve currency in the earlier 20th century or during the 1970's (high interest rates/inflation, considerably lower valuations ...etc.).