Financial encyclopedia

There are two main reasons for "dollarization":

1. After the conflict between Russia and Ukraine, the United States used the hegemonic advantage of the US dollar to sanction Russia, such as freezing Russian assets in the United States and restricting Russia's use of US dollars for transactions. These measures are counter-productive.

Many countries are worried about relying too much on the US dollar and the risk of being sanctioned, and reducing the foreign exchange reserves of the US dollar. According to the information of the International Monetary Fund, the US dollar is the first in 2022.

In the fourth quarter, the share of global foreign exchange reserves dropped to 58.4%.

2. The United States "violently raised interest rates". In response to hyperinflation, the Federal Reserve began to raise interest rates rapidly last year, which led to the appreciation of the US dollar and the obvious strengthening of currencies in various countries, resulting in

Other currencies in the world are losing their value, and countries need to follow the US dollar to raise interest rates one after another, which will affect the stability of the overall market.

Other countries have started to advocate or even implemented it, and their trade can be settled in local currency instead of using the US dollar as the intermediate currency. China even completed the first order in RMB.

Settlement of imported liquefied natural gas (LNG) procurement transactions. Us treasury secretary yellen is worried that it may endanger the dominant position of the dollar.

Since the Hong Kong dollar is pegged to the US dollar, if it is "dollarized",

It is possible that the Hong Kong dollar will fall with the depreciation of the US dollar.

Not only are the international prices of Hong Kong dollar deposits and bonds falling, but the prices of houses, Hong Kong dollar MPF and insurance policies will be greatly reduced, and the stock market will fluctuate, while gold and gold will rise.

Although it is unlikely that the US dollar will be replaced, 84.3% of global cross-border trade is still conducted in US dollars, but it can still be prepared for a rainy day, and investment has intrinsic value and hedging function.

Gold may not be the only choice, but it must be a better choice.