By Stefan J. Bos, Chief International Correspondent Worthy News
MOSCOW/NEW YORK (Worthy News) – Leading experts warn that the U.S. dollar will soon lose its status as the “world’s reserve currency” after Russian President Vladimir Putin said Russia would start using China’s currency for international payments.
Putin mentioned the transactions in yuan after last week’s talks in Moscow with Chinese President Xi Jinping. Xi noted that China and Russia were “driving” global change that “has not happened in 100 years.”
Saudi Arabia, the world’s largest petroleum exporter, is also in talks with Beijing to use the yuan for global trade, Worthy News monitored.
Xi told Gulf Arab leaders recently that China would work to buy oil and natural gas from Saudi Arabia and others in yuan.
Analysts said these moves would support Beijing’s goal to establish its currency internationally and weaken the U.S. dollar’s grip on world trade.
Additionally, Saudi Arabia and Iran are negotiating to form an economic alliance with China and Russia, further undermining America’s economic clout, according to sources familiar with the discussions.
Saudi Arabia and Iran may even join BRICS, an acronym for five leading emerging economies: Brazil, Russia, India, China, and South Africa.
While the White House claims the U.S. dollar remains strong, critics say that American President Joe Biden’s perceived weakness is also speeding up the fault of the currency.
Former U.S. Assistant Treasury Secretary under President Donald J. Trump, Monica Crowley, is among those raising the alarm bells.
She warned that if America’s currency loses its global reserve currency status, “that would mean the end of the U.S. dollar.”
“Having that status [as the world’s reserve currency] has been a real privilege,” Crowley told Fox News television over the weekend. “But we’ve abused that privilege by wholly reckless monetary and fiscal policies over many years, certainly over the last couple of years, which has really devalued the dollar,” she noted.
“On top of that, you have [U.S. President Joe] Biden’s weakness, his war on domestic energy production, the Ukraine war. And because of all these things, we’ve caught America’s enemies led by China forming a new economic bloc,” Crowley added.
U.S. broadcaster CNN, arguably not a fan of Trump policies, also aired comments expressing concerns. CNN’s “GPS” program host Fareed Zakaria noted, “Washington’s weaponizing of the dollar over the past decade has led many important countries to search for ways to make sure that they do not become the next Russia.”
He stressed that other countries are trying to avoid the U.S.-dominated SWIFT payment system and are seeking refuge in China’s yuan.
Crowley agrees. She said all it would take for the dollar to be removed from world reserve status leading to “Weimar Republic” inflation in America, is for oil-rich Saudi Arabia to join the BRICS nations.
“If that were to happen, there would be a complete implosion of the global economic system, but certainly the American economic system,” Crowley commented.
“And if that were to happen, you’d be looking at sky-high inflation, just raging Weimar Republic kind of inflation.”
She referred to the historical period of Germany when a loaf of bread in Berlin that cost around 160 marks at the end of 1922 cost 200,000,000,000 marks by late 1923.
Historical records show that by November 1923, one U.S. dollar was worth 4,210,500,000,000 German marks. Crowley fears similar troubles in the United States. “If you think inflation is bad now, just wait,” she added.
“But more importantly, we [the U.S.] would lose our economic dominance and our superpower status,” Crowley warned.
She recalled Americans benefited from the U.S. dollar’s status in the trade: “It kept prices down whether it’s energy or your food prices.”
The entire global economic system had been “reliant on the safe and secure dollar,” she confirmed. “But that is no longer the case. Again because we’ve been printing money like crazy and devaluing the value of the dollar. On top of it all, oil is the critical lynchpin of this.”
If Saudi Arabia decides to join “with America’s enemies here and starts trading oil in different currencies, that is going to undermine the entire global economic system and here at home,” the former Treasury official argued.
Americans should take notice, she said. “What it is going to mean for us is going to be raging inflation so much worse than anything we have ever experienced.”
She and other market watchers argue that America’s rivals, such as China, as well as even Washington, are using the turmoil to ‘rescue’ the financial system by introducing Central Bank Digital Currencies (CBDC).
Yet, Dutch Queen Maxima has promoted the CBDCs as the “United Nation’s Secretary-General’s Special Advocate for Inclusive Finance for Development.”
If appropriately designed, “CBDCs could hold great promise to support a digital financial system that works for everyone. But that is an important ‘if,'” she claimed last year.
The venue where she made the remarks was remarkable: an annual International Monetary Fund– World Bank meeting in Washington, D.C.
“If designed and implemented with inclusion in mind, CBDCs could offer many options to expand access to the unbanked and to serve the vulnerable and the poor,” Maxima argued.
However, “Maxima openly advocates for programmable money; power in central banks, without parliamentary accountability,” complained leading Dutch financial journalist Arno Wellens.
She is “an unelected official who is outside politics under [Dutch] constitutional law,” he wrote on social media. “This is a serious attack on democracy,” stressed Wellens, reflecting a broader debate on government control and digitalization in the Netherlands.
China became the world’s first major economy to pilot a digital currency in April 2020, and with the U.S. dollar under pressure, even Washington is flirting with its introduction, noted Crowley.
“If they were to do that [introducing CDBCs], the United States already has a pilot program, that means the loss of your individual economic freedom. Because the government will have total access and control of everything you buy and sell. And the ability to turn it off [immediately],” she explained.
Yet leading economist Peter Schiff fears that’s on the horizon for America given the current geopolitical and economic climate. “The petrodollar’s days are numbered,” he wrote on the social media platform Twitter in reaction to Saudi Arabia’s announcement it will be investing in Chinese oil refineries.
The International Monetary Fund (IMF) confirms his assessment. The dollar share in global foreign reserves dropped from just over 70 percent in 2002 to less than 60 percent last year and fell steadily, according to IMF data.
With the U.S. dollar under threat and East-West tensions growing over American dominance and conflicts such as the war in Ukraine, countries now look for new global payment options to settle their (financial) differences.
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