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As the title of this video suggests, we are asking the question "is ASEAN ditching the dollar?" and if so what does that mean? I think it is just long tail economics, I will get into it here in a minute. I thought of making this video after reading a recent article from ASEANBriefing.com, that is aseanbriefing.com, the article is titled: Asian Finance Ministers and Central Banks consider dropping US Dollar, Euro and Yen, Indonesia calls for phasing out Visa and Mastercard. Quoting directly: "An official meeting of all ASEAN Finance Ministers and Central Bank Governors kicked off on Tuesday, March 28th in Indonesia. Top of the agenda are discussions to reduce dependence on the US Dollar, Euro, Yen and British Pound from Financial transactions and move to settlements in local currencies. The meeting discussed efforts to reduce dependence on major currencies through the local currency transaction (LCT) scheme. This is an extension of the previous Local Currency Settlement Scheme that has already begun to be implemented between ASEAN members." Quoting further: "He," and he being President Joko Widodo I believe of Indonesia, "He argued that Indonesia needed to shield itself from geopolitical disruption citing the sanctions targeting Russia's financial sector from the US, EU, and their allies over the conflict in Ukraine." So a lot going on here. What exactly does this mean? I did some videos on my personal channel, I'll go ahead and put some links up to those where I kind of get into what I think is going on here. One, yes there is a transition occurring. The world is changing with respect to the relative relationship between the currencies of the various jurisdictions. Now some have argued, I think it's a semantic argument that only the US Dollar is the world's reserve, everything else is like just sort of secondary to that. In point of fact, I think as a practical matter there are multiple reserve currencies already for example US Dollar, Euro comes to mind, to some extent the Yen, to some extent the Pound, but look the Chinese Yuan I don't think there's any way around it, is going to be on the rise and quite honestly the Russian Ruble I think will be interesting to watch over time because I don't know exactly what is going to happen with that. I don't think anybody quite understood the ramifications of what has happened in the last year and how that would impact the Ruble and quite frankly I think it has been an interesting thing to watch but interesting in the sense of the Chinese saying "may you live in interesting times" and interesting might not necessarily be a good thing. 

So the point I'm trying to make in this video is, is the sky falling with regard to the Dollar? On a certain level I think people should be concerned in a broad sense. At the same time I think there's much more of a lag associated with these things than is perhaps being credited especially among the folks who did see this coming a lot further ahead than many other folks out there, the vast majority of people for that matter sort of saw it. So my point being is I don't think overnight the Dollar is just going to disappear, I don't think that's going to happen. What does this mean, this ASEAN situation and again I am just kind of an amateur like Economist, I love following economics, geo-economics, geopolitics and things. I don't consider myself an expert by any stretch but this will have ramifications for the Thai business sector which I think is pertinent to this channel. Yeah these countries within ASEAN for example are going to start trying to settle trade in their local currencies where possible. That's probably one way of sort of mitigating against sort of risk that they feel with using the Dollar especially in the aftermath of some of the things that happened with respect to some sanctions that have occurred over the past year. Leaving that aside, does this create some massive vacuum wherein the dollar is just going to finish from the stage. I don't think so. I think if anything, what we are looking at is what can only be described conceptually as the long tail, what has been described as the long tail economics where you have a fat curve on one side and then this sort of long tail that emanates out from there. A perfect example of this occurred in the movie industry quite honestly. I know that seems dissimilar from issues pertaining to currency but yeah if you looked at the movie industry, go back to the year that Avengers Endgame came out for example. Avengers Endgame would be on the fat side, be in the fat curve. A lot of people went to see that movie, much of the general public went to see that movie in many countries but unlike the past, all movies were just in a fat curve because there were only a limited number of movies that were coming out. As a result of streaming services and even the democratization of the entertainment business through platforms such as YouTube, there resulted in this thing called a long tail where there became demand for more niche things out on this longer tail of the curve.

I think the same thing is kind of occurring locally within ASEAN where the Dollar will kind of act as the fat tail if you will, the fat curve and many of these so called reserve currencies will continue to act at least for the immediately foreseeable future as sort of the fat tail of the curve and then, for certain transactions where it can be accomplished for example inter-ASEAN currency transactions or trade transactions, yeah it will happen with local currencies and again these are kind of the niche occurrences that happen out on the longer tail of the economy. All of this is basically a result of the digitization of the world really, of the digitalization of economies and really the functions of Governments and businesses just out there in the world. Again a perfect example of this is YouTube. I mean 10 years ago what was YouTube used for? A lot of cat videos and things of this nature. These days it really is becoming very much a centre for long tail information distribution. This channel is a perfect example of the long tail in action. I mean who would have thought there would be any significant demand for information coming from a relatively small law firm in Southeast Asia but there is. There is a niche demand for that information and we like to think that we try to fill that demand. I think a similar and I am just talking conceptually here, I think a similar phenomenon is occurring with respect to this International currency transition that I think we are presently going through as sort of Eurasia recalibrates moving toward down here in Southeast Asia as well as up in Northeast Asia and then in like Central Eurasia and West Asia there is some hyper industrialization going on. There is really no other word for it and it is going to move fast.

We are seeing it down here in Thailand. I mean Thailand is just building up at a tremendous rate. You go down to the Eastern Economic Corridor and it is even orders of magnitude above that and Bangkok right now, I mean I don't know how many cranes you see in the sky, new buildings going up everywhere, it's really amazing to watch. Again, do I think this is bad, good for the dollar? It's a change and it's going to be a major transition and quite honestly, I think the US and frankly hopefully perhaps some cooler heads, may be some more capable heads as time goes by, are out there to react to this but I think the United States is innovative and dynamic enough to sort of roll with these changes if we stay ahead of it in real time.