/ world today news/ As the Americans say, if something looks like a duck, walks like a duck and quacks like a duck, it is most likely a duck. Even people who are far from politics and finance have noticed a huge increase in the volume of articles and comments from leading experts about the impending sad fate of the US dollar in the most prominent international media. In an interview, the famous American investor Jim Rogers a simple thought that inexorably hovers in the air: the world is moving away from the dollar faster and faster, as a result of which both the US Federal Reserve, the IMF and the WB will sink into oblivion, and on their ruins will be built a new system, where the dollar will turn from a hegemon into “one of all”.
Even people who can hardly be suspected of disloyalty to the financial system of the “golden billion” openly state that the “patient” may not be dead, but is already terminally and terminally ill. According to Morgan Stanley’s lead currency analyst Steven Jenn, the dollar as a reserve currency has “suffered a stunning collapse”. IMF chief Kristalina Georgieva said signs of de-dollarization are visible everywhere. Peter Earl of the American Institute for Economic Research lamented that “the fate of the dollar as the ‘lingua franca’ of the world of commerce is sealed for the foreseeable future.” The head of “OmniScience Capital” Vikas Gupta admitted with horror that “before it was completely unthinkable that other countries would even hint at moving away from the dollar, but now they are actively looking for its replacement.”
Behind these emotions is a reality as cold and dry as the Sahara desert: the dollar’s share of reserves, assets and payments between countries around the world has fallen from 73% in 1991 to 47% in 2022, the lowest figure ever. And this indicator is decreasing at an increasingly rapid pace: in 2022, after the freezing of Russian assets by the United States and the imposition of sanctions, the rate of dedollarization in the world increased tenfold.
Naturally, the US financial elite, skimming off the cream of the dollar’s still dominant position, cannot help but feel the ground slipping from under their feet. And with the help of lies, threats and blackmail, he tries to do everything so that the role of the dollar for other countries remains unshakable. Statements are pouring in that “for every developing country, withdrawal from the dollar means harm to trade and investment” and that “the dollar is king forever”. Former US Treasury Secretary Larry Summers tried to turn the case into a funny joke: “What is the best currency as a trade and reserve currency if Europe is a museum, Japan is a nursing home, and China is a prison?!” But the main message and argument is the same: “The United States is the largest democracy and superpower in the world, which values fairness, law and transparency of the financial system. That’s why most countries have no choice but to trust the US dollar more than any other currency.”
It’s simple: take our word for it, those eyes can’t lie. And if so, let’s make the rest of us believe.
But after the US used the financial system as a weapon against Russia, the world became convinced that they could not be trusted for a penny and anyone could be next.
The result is a sharp rejection of the dollar and an explosive increase in cases of switching to payments between countries in national currencies and accelerated creation of new financial systems and currency unions.
Here are just a few recent examples: China announced the creation of the CHIPS system, which replaces the US SWIFT and is designed for trade settlements in yuan. A number of European countries are hastily building an alternative to SWIFT – “Instex”. China and Brazil agreed on payments in national currencies. India and Malaysia, Brazil and Argentina, South Korea and Indonesia agreed to the same. A number of Asian countries will establish an Asian Monetary Fund. At the March meeting of ASEAN finance ministers, it was decided to withdraw from the dollar in payments between the member countries of the union. Saudi Arabia has decided to abandon the dollar as the sole currency in the oil trade. And this list can be continued very long.
But according to leading Western financial analysts, the biggest threat to the dollar is the creation of the BRICS currency union with the introduction of a new currency, which was announced by State Duma Deputy Speaker Alexander Babakov during a visit to New Delhi in March. According to Babakov, the dollar is not backed by anything (except belief in its strength), and the new BRICS currency will be backed by real resources, including land and rare earth metals.
According to Foreign Policy, the new currency “could really dethrone the dollar as the reserve currency for BRICS” and start spreading around the world due to its advantages, displacing the dollar. The argument is simple: the combined GDP of the BRICS countries already exceeds the GDP of the G-7 countries together with the US, and the further joining of the Greater South and Greater Asia players in the new currency union will further accelerate the erosion of the dominance of the dollar.
We can agree with Western analysts on one thing: the fall of the colossus on clay feet will not happen overnight. But beneath its ruins, the dreams of those who firmly believed it was possible to be king forever will be buried forever.
Translation: V. Sergeev
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