The US dollar is dealing with some of the same challenges that the British pound faced in the early 1900s, before it went into decline, Goldman Sachs said in a research note released on Thursday. The Wall Street bank warns that the greenback could lose its global dominance.
The move by Washington and its allies to freeze much of the Russian Central Bank’s foreign currency reserves has raised concerns that countries could start moving away from the dollar. Analysts explained the risk as due to worries about the power the dollar grants the US.
The challenges that Goldman Sachs named include the fact that the US has a relatively small share of global trade compared to the dominance of its currency in global payments. Another issue is that the country has a deteriorating “net foreign asset position,” with rising foreign debts. In addition, the nation faces geopolitical problems, such as the conflict in Ukraine.
The Goldman Sachs economists also said the nation’s large debts due to the fact that it is a big importer of goods could be a particular problem.
The British pound, which was once the world’s reserve currency, was displaced by the US dollar in the middle of the 20th century. International investors were more reluctant to hold pounds after Britain amassed huge debts in World War II, the bank’s analysts noted. “If a reserve currency issuers’ debt is allowed to grow relative to GDP, eventually foreigners may grow reluctant to hold more of it,” they wrote.
Anonymous
13 comments:
That's a fact.
Overtime, the other countries will wise up, and as a result will not hold any or very little of the USD.
Many countries are already starting to navigate away from the US Sanctions.
More and more are going to follow suit.
Very soon, there will be overwhelming debts that the US has to foot out. How is it going to pay others?
The USA is a parasite sucking out the blood and sweat of the whole world, selling resources and producing goods for them, in exchange for their fiat currency printed from thin air that will become worthless very soon.
It is not a fair exchange. It is cannibalism.
The Americans are destroying the foundations they created to keep them as the world's number one hegemon.
First they destroyed the dollar by sanctioning Russia, one of the biggest producer and exporter of oil. Now Russia is insisting on payment by roubles for oil and gas and everything. Countries are abandoning the use of the US$.
Then they destroyed the trust in the SWIFT international banking system by seizing the funds of depositors in American and western banks. Without the trust and confidence, the international banking system will collapse. Countries are pulling out their deposits in American banks.
Now they are destroying the confidence to use Boeing aircraft by showing how they could crash the aircraft. Flying Boeing aircraft is a high risk, your lives are at the mercy of the evil Americans.
Very soon no one would dare to fly in Boeing aircraft and no one would want to buy Boeing aircraft.
These pillars of American hegemony have been pulled down by the Americans themselves, the evil Empire that cannot be trusted.
The Americans are so desperate that they are showing their hands in everything and using them in very irresponsible reckless ways to hurt other countries and peopl.
Well done America. The mad Samson is bringing down the whole house of the American Empire.
When MH370 disappeared, there was much speculation about who and what was on board. True or not, there was this talk that many Chinese involved in high tech projects were among the passengers on board. Coincidence and conspiracy theory? Think about that?
The USA dug a big hole thinking the Russians and Chinese will be buried in it. That has backfired badly and the only country falling into the big hole will be the perpetrator itself.
There will be others who will be dragged into the hole with them. The EU for one will suffer fragmentation. Now we are beginning to see one EU country falling out and agreeing to pay Russia in Rubles. Why would a country want to buy gas and oil at multiple times more expensive than what they can get from the Russians, even by having to pay in Rubles? More European countries will follow when the pain gets too intense to bear.
The whole idea of starting the conflict in Ukraine, by promising Ukraine NATO membership, is all about the USA wanting to sell oil and gas to the Europeans. That is why they sanctioned Nord Stream 2 right from the beginning, and the only hurdle was Angela Merkel, who had nurtured the friendly Russian/Germany relationship for years, only to be totally destroyed in months by Olaf Stolz.
Now the Europeans are between a rock and a hard place regarding energy supplies and still trying to project a united front by even suggesting to cut off Russian oil and gas imports completely. I support and urge them to just do it and wait for winter to teach them a lesson they will never forget. How long can the Europeans tolerate a long term import of expensive oil and gas from the USA and elsewhere, even if those are available, and logistically possible, with no pipelines linking them to Europe? Who wants to construct them seeing what happened to NORD Stream 2?
But wait, maybe they can build a pipeline from Texas or whatever underground, across the Atlantic Ocean floor to Germany under Biden's Build Back Better plan. But wait again, isn't that plan already dead at birth, if I remember correctly. No money no talk! Aa a last resort, maybe the Europeans will have to pay for it, like Mexico paying for the wall. LOL
Anyone still has any delusion that the Americans are for peace and not warmongers?
The war in Ukraine is fully under the control of the Americans. Zelensky is fully under the control of the Americans, taking orders from the Americans. All the terms of his negotiation with the Russians are decided by the Americans.
Ukraine is now a satellite or puppet state of the Americans.
The Americans just told the Russians confidently that the war would not stop so fast. Because the Americans are calling the shot.
Poor Ukrainians still did not know what is happening. They are being taken to the slaughter house by the Americans. Whether they live or die, when they live or die, are all decided by the Americans.
Poor Ukrainians.
In the end, the price will be paid by the Europeans and Ukraine will be wrecked. USA will reap the benefit of high oil prices and the Europeans will pay for it through their noses. They have no choice.
Macron still wants to talk to Putin but is criticised by the USA. A split will come. Years ago they were talking about France doing a similar exit from the EU like the UK. It never happened because of USA threat. France is a crucial member of the EU. So, the USA is intent on prolonging the war, make the Europeans suffer and become totally dependent on USA help in energy, weapons and total control. Brussels has sold out the Europeans. The Neocons have succeeded.
Russian Energy Paid For in Renminbi is Heading to China
Coal cargoes will arrive this month, followed by crude oil in May
Russian coal and oil paid for in yuan is about to start flowing into China, Bloomberg reported on Thursday.
According to the media outlet, citing Chinese consultancy Fenwei Energy Information Service, several Chinese firms used local currency to buy Russian coal in March, and the first cargoes will arrive this month.
These will be the first commodity shipments paid for in yuan since the United States and Europe hit Moscow with unprecedented sanctions, cutting several Russian banks off from the international financial system.
Traders said that Russian crude sellers have also offered Chinese buyers the flexibility to pay in yuan. The first cargoes of the ESPO grade bought with Chinese currency will be delivered to independent refiners in May, people familiar with the purchases told Bloomberg.
According Fenwei, both steel-making and power-plant coal are being paid for in renminbi. These deals are traditionally made in dollars, but many Chinese buyers temporarily halted purchases after Washington and its allies cut off Russian lenders from SWIFT.
Data shows that Russia was China’s second-largest coal supplier last year. Nearly half of the imports from Russia are metallurgical coal.
Chinese buyers are interested in importing more Russian supplies. However, logistics and financing barriers could ultimately cap the flows, the China Coal Transport and Distribution Association said last month.
[ RT - You can share this story on social media ]
Now three EU countries are breaking ranks and agreeing to buy Russian oil and gas in Rubles.
The expectation is that Germany will follow soon as it has no choice. The Europeans have been completely fooled and betrayed by the USA to participate in their import boycott of Russian energy, not knowing that the USA itself is breaking it's own sanctions by buying even more oil over the last week from Russia, about 40% more. That of course is not in the MSM.
The USA and EU have no more cards to play in the sanctions game. Now talking about sanctioning coal imports from Russia, which at about US$4 billion is a drop in the ocean for Russia. They are basically scraping the bottom of the barrel now to find some irrelevant things to sanction. Anyway, that coal could easily move to China or India.
The US$ was already losing it's dominance before the Ukraine crisis. Now it is accelerating after those sanctions on the Russian Central Bank.
It is just logical thinking that countries will take steps to protect their reserves and find alternative avenues to survive instead of keeping all their eggs in one basket. The Russian experience is a useful lesson they have to learn.
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