The dedollarisation high speed train is running at full speed. Are the Americans afraid? Nay, Trump is challenging the BRICS' countries and threatening to impose more tariffs against them if they dare to try to dedollarise. Trump is playing brinkmanship or telling the BRICS countries not to go against the American Empire or else....
The possibility of BRICS countries and the rest of the world to stop dedollarisation is nil. More and more countries are reducing trade with the Americans out of necessity and self preservation. There is practically nothing to buy from the Americans that needs the American dollars. And more and more countries have nothing to sell to the Americans. Tariffs or no tariffs does not mean anything to them. The decoupling from the American economy is becoming a natural phenomenon. When trade with the Americans drops to an insignificant level, there will be less demand for the dollar, and less need to hold them. Who is still thinking of buying American legacy cars or Boeing aircraft or iPhones?
The second point is the vicious cycle of banks, institutions and nation states finding it riskier to hold the dollar as a reserve. They will start to downsize their dollar holdings, and a little drizzle could end up turning into a storm.
International trade would go on but without the need for the dollar. All trades would be using their own currencies or BRICS' currency, or new currency being developed. China, the biggest exporters would not be accepting the dollar for their goods and services. So would be the rest of the world.
What would happen to those holding the dollars? The only place they can spend it is to buy whatever they could from the Americans. They need to dispose of their dollars before they become worthless. Another way to dispose the dollars is to buy other currencies if they could in the exchange market. This would prove difficult by the day when no one is accepting the dollar. Maybe they could change into some European currencies as an intermediary. The USA would be the dumping ground for the dollar with Europe as a secondary market.
What would happen when all the dollars printed return to the USA? Every country, every institution would be dumping the dollar into the American market, buy whatever they could lay their hands on, maybe properties and land. The years of reckless printing of the dollar will pay proportionally with the dollar coming home to roost. The Americans would be very rich with plenty of dollars flooding the streets of America, or maybe Europe.
Trump can raise all the tariffs by 100s or 1,000 times, who cares? No one is going to sell to the Americans. It would be a one way traffic, to dump the dollar quickly before it is too late. There will be no place for the dollar outside America and Europe. The two can trade among themselves.
This could be the scenario going forward when dedollarisation hits full steam. Would the Americans be pointing a gun at everyone to use or accept the dollar? It would be futile when there is nothing to buy from the Americans...while the dollar is not accepted by countries around the world.
5 comments:
Even though there is ongoing dedollarisation amongst the BRICS countries, Chinese exporters demand payment in US dollars from Indian importers rather then accepting Indian rupees from the deepshit hole country !
Countries needing to buy oil from Middle East countries still need to hold US$, since oil is traded in US$. The Middle East holds the key to global need to hold US$ in reserve. If that key can be put aside by the Arabs, the US$ will no longer be important to be held by countries, or at least not as much as required for trade in other commodities other than oil.
For every country around the world, oil is the biggest need for a country's economic activity to function. Everything needs mostly oil to generate electricity for offices, computers, lifts, lighting, air conditioning, home appliances and most of all transportation. Without oil, everything comes to a complete standstill, other than eating, sleeping and shitting.
However, BRICS is the solution to the need for countries to hold huge US$ reserves to buy oil. Russia can do the oil trade in Yuan. Some Middle East oil producers are also using the Yuan in the oil trade. Iran is also doing the oil trade outside the US$. Iran, under sanctions I know, is even using barter trade, exporting oil to China in return for development and consumer goods.
Other BRICS countries will do bi-lateral trade in their own currencies inside the bloc, with even commodity exchanges being set up to facilitate the selling and buying of commodities, all bypassing the use of the US$.
Sure, what is happening is all going on discreetly and patiently executed, ignored by the MSM, but de-dollarization is going on without being monitored closely by the USA and the West. That is the beauty of the system.
Tariffs are another great help for BRICS de-dollarization move. As countries export less to the USA, less US$ goes into the hands of countries which means less usage of the US$ in trade.
And as countries do trade among themselves, especially countries in BRICS, they can trade using their own currency, if agreeable, which also means less usage of the US$.
How then are tariffs going to help the USA I wonder?
If all the US$ return home to the USA to roost, the country will be very rich. The price of toilet papers will fall, and USA citizens can shit more, LOL.
Just a little story:
In the old days people were led to believe that USA streets were paved with gold and many Chinese were lured to work in the USA thinking of all the gold. What they found out later was that all that glitters painted were not gold, and they realized too late that they were being tricked, and forced to work on building railways, mines and hard labor, helping to build up the USA. I suppose they were paid even far below 'slave wages'. Nothing wrong about that as there was no Human Rights Watch to complain to or International Labour Organization to oversee worker's rights.
When all the dollars return home to the USA, the streets will be paved with dollars now, the walls of buildings will also be paved with dollars, people will even wear clothes sewn using dollar notes, and USA citizens will have to carry dollars around using trolleys. No bags or pockets will be big enough for carrying those dollars around. You see, the USA is not like China, where payments for everything goes through a mobile phone. Cash in hand is still the touted 'King'. That is why they have to keep printing 24/7 to keep up. China better not follow suit or else it will be accused of stealing the USA model.
There will not be any robberies in the USA, as everyone has so many dollars stack up in boxes at home and robbers have no incentives to rob when everyone is so rich. Fewer Law Enforcement Officers will be needed as there will be fewer robberies. Trump already saw the future and asking two million Federal Workers, which includes law enforcement officers, to resign.
Trump wants to cut costs, even removing security protection for ex-administration people like Anthony Fauci (or Doctor Covid) and others like John Bolton and Mike Pompeo. He wants to make the USA really swim in dollars.
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