'The end of world dollar hegemony is coming and hardly anyone in government is taking notice or even understands what this means. Since the Bretton Woods Conference in 1944, the dollar has been the only currency accepted throughout the world for settlement of international trade accounts among nations.'
'As USA gold reserves reached critically low levels, President Richard Nixon took the USA off the gold exchange standard, as the system of central bank redemption was called, in the fall of 1971. It did NOT devalue the dollar to gold, which it could have done, and promise to stop dollar expansion. Instead, the USA simply ended dollar redemption for gold, allowing the USA to create as many fiat dollars as the world market would accept.
It turned out that the world market would accept a lot of US fiat dollars. A major reason was that Saudi Arabia, the world’s largest oil producer, agreed to demand payment in dollars for its oil, thus creating worldwide demand for dollars.'
'This “petrodollar” arrangement is now breaking down, due to the ever-accelerating debasement of the dollar. The cause of the debasement is the unholy alliance of the Federal Reserve, the US central bank, and the US government. The Federal Reserve creates, out of thin air, all the dollars that the government needs to maintain its massive and ever-increasing spending deficit. The monetization of these deficits has led to a loss of dollar purchasing power at an accelerating rate.'
'All this mayhem could only be funded by worldwide acceptance of the fiat dollar. But much of the world has had enough. There are several organizations that are cooperating to develop an alternative to the dollar for the settlement of international trade. The BRICS (Brazil, Russia, India, China and South Africa), the Shanghai Cooperation Organisation (SCO), and the Eurasian Economic Union have formed a working group to develop a commodity based medium of exchange to replace the dollar as the premier means for the settlement of international trade.'
This is where the world is headed, because the USA cannot force sovereign nations to accept the dollar, especially if there is another and better choice. The USA has not lived up to its responsibility to protect the purchasing power of the dollar via controlling its supply. Lord Acton’s warning is as important today as ever—i.e., “Power tends to corrupt, and absolute power corrupts absolutely.”
P.S. The new SCO currency will likely supplant the dollar as the world’s premier reserve currency primarily because it will be backed to a large extent by commodities and it will not be under the control of one sovereign country but a number of sovereign countries, all dedicated to its monetary health in ensuring the free flow of international trade and payments. It will be a loss for the dollar, of course, and for the USA, but frankly, the world will benefit overall.
Link to article: https://mises.org/wire/world-dollar-hegemony-ending-and-may-be-good-thing- Anonymous
5 comments:
God works in his mysterious way. Many countries are still reluctant not to use the dollar. But it happens in such a way that the Americans have to hike the interest rate, push up the value of the dollar. So even Japan has no choice but not to use the dollar with the highly depreciated Yen.
Everything is working finely to push every country away from using the dollar. Now every country is hoping that BRICS would come up with a new currency quickly to save them from the dollar.
Nice. Very nice.
God works wonders!
The $US is coming down for sure. The higher it goes, the harder it falls.
Barter trade is an effective way to bu-pass the
Reliance on the USD.
WHY AND IS THE REASON
NOT TO DO SO??
'to by-pass....' and
'Why was and is.....'
to correct my above-comment.
My Sincere Apology
patriot
The reason is no country in the past have managed to do trade in oil in other than the US$. Saddam Hussein tried to do in Euro. Gaddafi tried too, and both paid the ultimate price. The USA has a military that will take down any attempts to change the status quo of the US$ hegemony, by hook or by crook as in Iraq, fabricating fake evidence to invade the country.
But when Russia and China decided to work together on this for the past decade or more, they were more than confident in countering the USA military threat together. And the USA just cannot take them out like what they did to Iraq and Libya. Their coming together was a godsend. Together they will be able to make de-dollarisation work with help from members of BRICS.
How would the USA take down Russia or China? They tried using the Europeans as proxy in Europe, by creating the Ukraine War to bring down Russia. But, what is the result? They still have not made Russia collapse. And the Europeans are suffering as a result of their folly. Thankfully, some are waking up, like Germany and Hungary.
The USA is now working on taking out China, using Taiwan as an excuse, creating trade and technology wars and attempting to push China underwater.
There is only one way to cut down the USA to size - take down the US$ hegemony. Then they will not have the monopoly of printing unlimited fiat money to fund their military bases overseas and using their military establishments to protect the US$ hegemony.
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