Starting April 1st, Iraq officially activates the TIR system (Transports Internationaux Routiers), a UN-backed global customs framework that links the country to international trade and transport routes.
Status of US Dollar as Global Reserve Currency: Central Banks Diversify into Other Currencies and Gold
The surge of the “nontraditional reserve currencies.”
The status of the US dollar as the dominant global reserve currency has helped the US fund its twin deficits, and thereby has enabled them: the huge fiscal deficit every year and the massive trade deficit every year. The reserve currency status comes from other central banks (not the Fed) having purchased trillions of USD-denominated assets such as Treasury securities, other government securities, corporate bonds, and even stocks.
The dollar status as the dominant reserve currency has been crucial for the US, and as that dominance declines ever so slowly, risks pile up ever so slowly.
The US dollar lost further ground as top global reserve currency in 2024, according to the IMF’s COFER data released today. Total holdings of USD-denominated securities by other central banks (not the Fed) fell by $59 billion to $6.63 trillion at the end of 2024, from $6.69 trillion at the end of 2023.
And the dollar’s share declined to 57.8% of total allocated exchange reserves at the end of 2024, the lowest since 1994, down by 7.3 percentage points in 10 years, as central banks have been diversifying their holdings for years to assets denominated in currencies other than the dollar, and into gold.
The dollar had already experienced a huge loss of global confidence before: Its share plunged from 85% in 1977 to a share of 46% in 1991, after inflation had exploded in the US in the 1970s and early 1980s. But by the 1990s, as inflation had been brought down and mostly stayed down, central banks loaded up on USD-assets again, and the dollar regained share as a reserve currency until the euro became a full-fledged currency.
USD-denominated foreign exchange reserves include US Treasury securities, US agency securities, US MBS, US corporate bonds, US stocks, and other USD-denominated assets held by central banks other than the Fed.
The major reserve currencies.
Central banks holdings of foreign exchange reserves denominated in all currencies, including in USD, edged up in 2024 to $12.36 trillion (from $12.35 trillion at the end of 2023).
Excluded from the total are any central bank’s assets denominated in its own currency, such as the Fed’s holdings of Treasury securities and MBS, the ECB’s holdings of euro-denominated bonds, and the Bank of Japan’s holdings of yen-denominated assets.
The USD is not losing share to the euro. The euro has been the #2 global reserve currency, with holdings at $2.27 trillion at the end of 2024. Its share has been around 20% for years, with a low of 19.1% in 2016 and a high of 21.3% in 2020. In Q4, the euro’s share was 19.8% (blue in the chart below).
So over the years, the USD has not lost share to the euro; it lost share to other reserve currencies, including “nontraditional reserve currencies,” as the IMF calls them. The colorful tangle at the bottom of the chart represents the largest of these other reserve currencies. More on those in a moment.
The surge of the “nontraditional reserve currencies.”
Some of these other reserve currencies have been gaining share at the expense of the dollar, especially the currencies in the basket of the “nontraditional reserve currencies,” that the IMF combines into “All others,” whose combined share has been surging since 2020 (red in the chart below).
But the Chinese renminbi has lost share. China is the second largest economy in the world, but its currency, the renminbi, plays only a small role as a reserve currency. And it has lost ground against the USD and other currencies since 2022. Central banks have not been enamored with RMB-denominated assets due to China’s capital controls, the RMB’s convertibility issues, and other complexities (yellow line).
Note the surge of the nontraditional reserve currencies combined in the “all other currencies” group (red).
Japanese yen, 5.8% (YEN, purple).
British pound, 4.7% (GBP, light blue).
“All other currencies,” 4.6% (red).
Canadian dollar, 2.8% (dotted green).
Chinese renminbi, 2.2% (yellow).
Australian dollar, 2.1% (black dotted).
Swiss franc, 0.2% (black).
The other diversification: gold.
Gold bullion is not a “foreign exchange reserve” asset of central banks and is not included in the data above. Gold is a “reserve asset” not involving foreign exchange
After four decades of unloading their gold holdings, central banks started re-adding gold about 20 years ago.
The top four holders have not changed their gold holdings in at least 20 years (based on IMF data released by the World Gold Council):
Member: Did any of your bond contacts receive their money yet Mark? Starting to lose hope.
MZ: How do I say this without getting anybody into trouble? I will have to think about this…..but I have great hope.
Member: what does your gut say Mark?
MZ: My gut has been notoriously wrong….but based on overwhelming news from bond contacts that they expect full payments this week…..I am looking somewhere around April 8th. So early next week makes sense to me….But remember I have been wrong in the past.
Iraq's domestic debt is expected to rise to 81 trillion dinars in 2024.
The Central Bank of Iraq announced on Monday an increase in domestic debt, while also noting a decline in foreign reserves for 2024.
The bank stated in its report on monetary and financial indicators in Iraq, which was reviewed by the Iraq Observer, that "the Central Bank's net foreign reserves for 2024 amounted to 130.81 trillion dinars,
a decrease of 10.18% compared to the same period in 2023, when they amounted to 145.64 trillion dinars."
He added, "The reason for the decline in foreign reserves is the rise in domestic public debt, which is needed to cover the real deficit in the state's general budget."
The report indicated that "Iraq's domestic public debt increased by 17.70% to reach 83.05 trillion dinars in 2024, compared to 70.56 trillion dinars in 2023." link
MarkZ Disclaimer: Please consider everything on this call as my opinion. People who take notes do not catch everything and its best to watch the video so that you get everything in context. Be sure to consult a professional for any financial decisions
Member: Happy Monday and last day of March. A new month is upon us and brings a new hope.
Member: Happy Monday…..new start to a new week of waiting.
Member: Anyone think this is our week?
Member: I’m hoping this is going to be a great week!!
Member: Hope springs eternal…but boy am I tired.
Member: Did any of your bond contacts receive their money yet Mark? Starting to lose hope.
MZ: How do I say this without getting anybody into trouble? I will have to think about this…..but I have great hope.
Member: what does your gut say Mark?
MZ: My gut has been notoriously wrong….but based on overwhelming news from bond contacts that they expect full payments this week…..I am looking somewhere around April 8th. So early next week makes sense to me….But remember I have been wrong in the past.
Member: What does everyone think will happen April 2?
Member: Reciprocal tariffs start…..and lots of msm will lose their minds.
Member; I do not think Nesara will start like many of the rumors over the weekend say it will….
.but maybe after the audits of the Fed, The Treasury and Ft. Knox…we will see something happen for us.
Member: Time to pull the switch on all of this change!
Member: haha, I'm prepared for "liberation day" to be a big nothing burger so getting some libations stocked up!
Member: Why would Trump call April 2nd as "Liberation Day" ? Would that begin the external revenue service where we see DOGE dividend checks? RV happen simultaneously? ?
Member: Anyone know why Trump said Treasury Secretary Bessent is excited about April 2nd??
Member: the trade war is much bigger than anyone thinks. It’s going to cause the worlds markets to go down.
MZ: I think it’s brilliant. We know we need a correction- it is correcting…... We know the stock market is overpriced on stocks versus earnings. This is based on data from the last 94 years. (since 1929)
MZ: At the same time-what else is happening? Stocks are coming down to a more sane level and a historic rise in metals. For them to reset this……we need a stock market that is valued appropriately. We also need metals to go up to revalue the rate of gold held by the US (It is currently at about $42.00 an ounce) .......
MZ: So gold needs to go up and the market needs to go down. Prices need to deflate back to where they were in the 60’s and 70’s. Those things are happening right now. Gold this morning was $3,127…..we are watching happen what needs to happen. We are watching a reset….but instead of it happening all at one time …We are watching it in slow motion.
Member: Gold Surged up over 3150 this weekend. Rumor is that there was a very important meeting last week with the Chinese Elders and every Treasury department globally. After that meeting, Gold and Silver Surged up.
Member: Would it be possible that the President is going to announce we are back on the Gold Standard on 4/2?
MZ: “ US sets sights on $1.5 Trillion lithium find in McDermott Caldera’s record deposit” This is on the Oregan/ Nevada border and one of the largest lithium deposits found in the US…..……Suddenly many natural resources are being discovered all over the world. ….. Its like they are about to base our wealth on commodities….and go asset backed….everytime in history that fiat has crashed…commodities have always gotten a heck of a boost.
Member: I think we wont see the RV until the budget is balanced…The RV will remove all the foreign debt once the budget is balanced
MZ: That might makes sense. Doge is necessary. They need to fix what is wrong in our government.
Member: The bible says “Don’t put new wine in an old wineskin.”
Member: Maybe things are already being fixed behind the scenes???
Member: Hearing that Sudani will release the financial reform immediately after Eid. Eid al Fitr will be ending on Liberation Day. Is it possible we see the finish line late on the 2nd?
MZ: it is very possible we see it then. There was a lot of expectation for the weekend. It could be the second but no one knows the timing. Continue to make good decisions and be responsible.
MZ: We absolutely know the system will reset. History shows up that resets are cyclical. They do break and they do reset. We are way past due for a reset.
Member: TNT Posted that 1 and 5 and 10 lower Denomination were released
Member: Tomorrow marks the first day of a new quarter. Shabibi mentioned it starting on a quarter somewhere.
MZ: It would be easiest for them to start then.
Member: I heard a rumor all contracts in Iraq expire today!!!
MZ: I have not heard that from any of my sources. No one I know agrees with that.
Member: Florida governor this morning talking about eliminating property tax.....
Member: A person named Mel has said a 100T Zim note will be worth about $11 million.
MZ: The lowest I have heard is $11 Million per 1 100T note. I usually hear $30-$50 million. Noone will know for sure until we reach the finish line.
Member: "Luck favors the prepared, dahling" - Edna Mode, The Incredibles
Member: Thank you Mark, for doing your utmost best to keep us sane and hopeful thru all this craziness. you are Greatly Appreciated!
Member: Thank Mark and Mods….Everyone have a wonderful day and see you for coffee tomorrow morning.