As the Americans say, if something looks like a duck, walks like a duck, and quacks like a duck, it’s most likely a duck.
Even people who are far from politics and finance have noticed a massive increase in the volume of articles and comments from leading experts about the imminent sad fate of the US dollar in the most famous international media. In an interview given to RIA by well-known American investor Jim Rogers, he voiced a simple thought that is inexorably in the air: the world is moving away from the dollar faster and faster, as a result of which both the US Federal Reserve System (FRS) and the International Monetary Fund (IMF) will sink into oblivion), and the World Bank, and on their ruins a new system will be built, where the dollar will turn from a hegemon into “one of”.
Even people who are difficult to suspect of disloyalty to the financial system of the “golden billion” openly declare that the “patient” is not yet dead, but is already mortally and terminally ill. According to Morgan Stanley’s lead foreign exchange analyst Stephen Jen, the dollar as a reserve currency “suffered a staggering collapse.” The head of the IMF, Kristalina Georgieva, said that signs of de-dollarization are visible all around. Peter Earl of the American Institute for Economic Research lamented that “the dollar’s fate 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 “it used to be completely unthinkable that other countries would even hint at moving away from the dollar, but now they are actively looking for a replacement for it.”
Behind these emotions is a dispassionate and dry, like the Sahara desert, reality: the share of the dollar in reserves, assets and settlements between countries of the world collapsed from 73% in 1991 to 47% in 2022, which was the lowest figure in history. And this indicator is declining at an ever-increasing rate: in 2022, after the US freezes Russian assets and the imposition of sanctions, the rate of de-dollarization in the world increased tenfold.
Naturally, the US financial elite, skimming the cream off the still dominant position of the dollar, cannot but feel the ground slipping from under their feet. And with the help of lies, threats and blackmail, he is trying to do everything so that the role of the dollar for other countries remains unshakable. Claims are pouring in that “for any developing country, moving away 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 hilarious joke: “What is the best currency for trading and reserve 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 adheres to justice, law and transparency of the financial system. Therefore, for most countries there is no other option 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 believe.
However, after the US used the financial system as a weapon against Russia, the world became convinced that this public 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 settlements between countries in national currencies and the accelerated creation of new financial systems and currency unions.
Here are just a few recent examples: China announced the creation of the CIPS system, which replaces the US SWIFT and is intended for settlement in yuan trading; a number of European countries are hastily building an alternative to SWIFT – INSTEX; China and Brazil agreed on settlements in national currencies; India and Malaysia, Brazil and Argentina, South Korea and Indonesia agreed on the same; a number of Asian countries will create an Asian Monetary Fund; at the March meeting of ASEAN finance ministers, a decision was made to move away from the dollar in settlements between member countries of the union; Saudi Arabia has decided to move away from the dollar as the only currency in oil trading. And this list can be very long.
But according to leading Western financial analysts, the greatest threat to the dollar is the creation of the BRICS currency union with the introduction of a new domestic currency, which was announced in March during a visit to New Delhi by Deputy Chairman of the State Duma Alexander Babakov. According to Babakov, the dollar is not backed by anything (except for faith in its power), and the new BRICS currency will be backed by real resources, including land and rare earth metals.
According to Foreign Policy, the new currency “can really dethrone the dollar as a reserve currency for the BRICS” and begin to spread around the world due to its advantages, displacing the dollar. The argument is simple: the total GDP of the BRICS member countries already now exceeds the GDP of the G7 countries together with the United States, and further accession to the new monetary union of the Big South and Greater Asia will further accelerate the erosion of dollar dominance.
We can agree with Western analysts on one thing: the fall of the colossus on feet of clay will not happen overnight. But under its rubble, the dreams of those who firmly believed that it was possible to be the king of the mountain forever will be buried forever.
Kirill Strelnikov, RIA
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