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Nummer 58 (4 feb. 2023)

Nummer 58 (4 feb. 2023)

In dit nummer:

Verharde dictatuur onder Rutte
WEF als alles-verslindende cult
Inhoud prik erger dan gedacht
De EU in het oog van de orkaan
Oekraïense ontwikkelingen

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AB InBev


16 jan.

We’re at #WEF23, where our leaders are connecting with public and private sector peers to dream up big solutions to the issues our world is facing. Follow us this week for updates about the ideas for collaboration coming from


that will help us create a #FutureWithMoreCheers.

Wereldwijde concurrentie voor de dollar (1)

De-Dollarization Accelerates: The Beginning of the End for US Dollar Hegemony in Southeast Asia? 

By Timothy Alexander Guzman 

– Global Research 

The US is facing major moves by the global community to de-dollarize their economies.  The reserve status of the US dollar will eventually come to an end, maybe not anytime soon, but sometime in the future as it is facing numerous challenges not only from major powers such as Russia and China who are actively trying to rid themselves of the toxic currency, but also countries with smaller economies who are based in the Southeast Asian region which includes Singapore, Malaysia, Indonesia, Cambodia, Thailand, and Laos.  The globalist think tank, the Carnegie Endowment for International Peace (CEIP) published an article on August 22nd, 2022, on the US dollar’s waning influence in Southeast Asia titled ‘Southeast Asia’s Growing Interest in Non-dollar Financial Channels—and the Renminbi’s Potential Role’ stated what was taking place between China and several Southeast Asian countries: 

China’s central bank—announced the launch of a new emergency liquidity arrangement that can be funded using renminbi and tapped by participating central banks during times of market stress. Three of the five participating central banks are Singapore’s, Malaysia’s, and Indonesia’s, which each recently renewed agreements with the PBOC implicitly aimed at reducing dollar usage in cross-border payments. This follows policymakers in Thailand, Laos, Cambodia, and Myanmar all announcing efforts to reduce dollar usage, as well as comments by Indonesia’s central bank head that consumers across five of Southeast Asia’s largest economies will soon be able to make intra-regional cross-border payments via linkages that avoid using the dollar as an intermediary, as is currently often the case 

Interestingly, The CEIP listed several reasons why Southeast Asian countries want to dramatically reduce the use of US dollars are as follows: 

Several factors are behind the various efforts aimed at reducing dollar usage in Southeast Asia. To begin with, many officials are concerned about the potential economic impacts of U.S. monetary policy tightening on the region given its high usage of the dollar; accordingly, some are seeking to reduce usage of the dollar in intra-regional trade payments as a means of curbing dollar reliance more broadly. Recent sanctions may also be spurring demand for alternative financial channels—for example, Myanmar’s military government is actively exploring how to circumvent EU and U.S. sanctions to transact with Russia 

According to an article published by ‘Bank Indonesia calls against payments in US Dollars’ who translated the report by an Indonesian news portal called on what Nugroho Joko Prastowo of the Solo Bank Indonesia Representative Office said regarding Indonesian businesses using national currencies to reduce its reliance on the US dollar: 

Bank Indonesia has urged importers and exporters to use national currencies in international payments in order to reduce Indonesian financial markets’ reliance on the US dollar, according to, an Indonesian news portal.  “About 90% of export-import payments are conducted in US dollars, while the share of Indonesian direct exports to the US is estimated at only 10%, and US imports account for 5%” 

The report also mentioned that “China, Japan, Thailand, and Malaysia have already agreed to use the two-way payment mechanism, with Singapore and the Philippines planning to join the system, according to the economist.”   

Another article published by the on December 15th, 2021, ‘GT Exclusive: Myanmar accepts yuan as official settlement currency for border trade with China’ said that Myanmar’s usage of Chinese yuan will help break the US dollar dominance in the long term: 

The yuan was included in the list of Myanmar’s official settlement currencies in January 2019. The move at that time was more symbolic, as all contracts and trade were still not settled in the Chinese currency.  Zhou said that the move, in the long term, will help break the monopoly of the US dollar in Myanmar’s foreign currency reserves.  The US has been abusing the dollar’s dominant status to impose arbitrary sanctions on other countries, and the yuan’s further expansion in Myanmar’s trade settlements may provide a shield against such a potential weapon, analysts said 

Cambodia is on Board Dumping US Dollars 

Why Cambodia with a population of close to 17 million people and a much smaller economic impact on the world’s economy is willing to drop US dollars is an important development.  The Diplomat, a current-affairs magazine based on analysis and commentaries from various authors on developments throughout Asia and the rest of the world published an article by Luke Hunt on the case of Cambodia’s attempt to stop using US dollars titled ‘Cambodia Reduces its Dependency on the US Dollar’ lays out the mood of the Cambodian government. 

“Ever since United Nations peacekeepers arrived in war-torn Cambodia to oversee elections held in 1993, the U.S. dollar has been a mainstay of the local economy with a dual currency system providing steady exchange rates in a volatile place” but there is a monumental shift taking place when the National Bank of Cambodia (NBC) announced that it “would phase-out small-denominated U.S. dollar bills – $1, $2, and $5 notes – following negotiations with banks and micro-finance institutions (MFIs).”  Naturally it’s a step to reduce the dependency of the US dollar according to the NBC “Cambodia has to encourage the use of its riel, more. So, allowing the circulation of small U.S. bills is an obstacle in urging the use of the riel.” 

There are several reasons for Cambodia’s move, one of them is to allow the use of digital currencies to “give the central bank more control over the Cambodian economy and bolster the local riel currency, which for decades suffered from a lack of confidence due to negative sentiment stemming from a 30-year war” in addition it will allow the central bank “control over monetary policy and interest rate settings and reduced costs in handling the sheer volume of $1 dollar notes circulating through the economy.”  

Hunt mentions the dark period of Cambodian history with the US-backed Pol Pot and the Khmer Rouge who destroyed Cambodia and it’s traditions and started a new revolution with a new culture that would begin on Year Zero, therefore everything before would be deemed irrelevant, 

“It’s a far cry from the late 1970s, when Khmer Rouge rule abandoned money, banks were abolished, and the NBC blown-up as Pol Pot tried to create a utopian, agrarian society that led to the deaths of an estimated 1.7 million Cambodians.”  

One of the darkest times in world history indeed.  It is a positive development that the NBC is encouraging the use of the Cambodian Riel for its economy, so the future seems promising.  NBC Governor Chea Chanto spoke at the 40th Anniversary of the re-establishment of the Riel 

“he said demand for the currency had increased by an average of 16 percent a year for the last 20 years amid annual average growth rates of 7.8 percent and inflation at around 2.5 percent.”  

Chanto said that “I firmly believe all ministries, institutions, companies, enterprises, and those who actively participate in the process of developing the banking system promote the use of the riel, which is our national currency.” 

According to an unidentified analyst “It’s also a matter of sovereignty and pride. It’s their country and they are entitled to have their own currency like anywhere else.”
Transitioning from the US dollar to the Cambodian Riel won’t be an easy task according to Michael Finn of the Khmer Times who authored ‘De-dollarisation: Views from Asia, US and Europe’ claims that “Any reduction in the use of the dollar needs to be handled carefully, according to foreign chambers of commerce in Cambodia. They say the central bank is unlikely to fully phase-out the US currency and any sudden moves to end reliance on the dollar would be bad for business.”  European Chamber of Commerce Advocacy Manager Noe Schellinck said that “ 

To a certain extent, the dollarisation now can be ascribed to the success of the Cambodian economy, with a great influx of Foreign Direct Investment, compared to the historic context of when the dollarization came about.” But the Indonesian Chamber of Commerce President Dalton Wong disagrees with Schellinck’s assessment: 

De-dollarisation is not a bad thing as it is a re-balancing of the fiscal and monetary policy tools. It is certainly not a complete displacement and substitution of the US dollar in favour of the Khmer Riel in trade and investment, which some observers and analysts seem to mischievously suggest, which is not so helpful. In fact, promoting a greater use of the Khmer riel will give greater monetary policy tools to the Cambodian author 

The collapse of the US dollar is becoming a reality as China and Russia continue to buy gold and trade with their own currencies at an accelerated pace with many more countries around the world who are also racing to de-dollarize their economies.  As we already know, several countries in Southeast Asia will soon make its move to rid itself of the toxic currency, but there are also other countries who are also making moves including India, Iran, South Africa, Syria, and Venezuela who are all motivated to drop the US dollar.  One of the main reasons for these countries to move forward by eliminating the use of US dollar is because Washington uses its currency status as a weapon to impose harsh sanctions on countries they deem as enemies. 

African countries are also starting to look for alternatives to the US dollar including Ghana according to a report published by Reuters on November 24th, 2022, ‘Ghana plans to buy oil with gold instead of U.S. dollars’ said that “Ghana’s government is working on a new policy to buy oil products with gold rather than U.S. dollar reserves” Ghana’s reason slightly differs from other countries since “The move is meant to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which is weakening the local cedi and increasing living costs.”  This means that the US dollar is causing inflation.  The move is expected to take place in the first quarter of 2023 as Ghana’s Vice-President Mahamudu Bawumia said that the new policy “will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency” as he explained that “using gold would prevent the exchange rate from directly impacting fuel or utility prices as domestic sellers would no longer need foreign exchange to import oil products.”  Libya was one of the first countries in Africa to propose the idea of creating an alternative currency to bypass the US dollar called the African Dinar which would have been gold-backed but the Obama regime supported a violent coup to overthrow its president who suggested the idea, Muammar Ghaddafi who was tortured and then killed in the process making Libya a hotbed for terrorism and at the same time, re-creating the centuries-old industry of slavery. 

The bottom line is that US dollar’s dominance in the global market will come to an end sometime in the foreseeable future.  No one has a crystal ball of when it will happen, but it is certain.  The world will experience an alternative economic reality that will change the dynamics of the US and its Western powers dominating the World’s economy with an outdated and flawed currency that will eventually have the same value as toilet paper. 


Note to readers: Please click the share buttons above or below. Follow us on Instagram and Twitter and subscribe to our Telegram Channel. Feel free to repost and share widely Global Research articles. 

Timothy Alexander Guzman writes on his own blog site, Silent Crow News, where this article was originally published. He is a regular contributor to Global Research. 

Featured image is from SCN 

Wereldwijde concurrentie voor de dollar (2)

Global South: Gold-backed currencies to replace the US dollar 

Pepe Escobar • January 19, 2023  

Let’s start with three interconnected multipolar-driven facts. 

First: One of the key take aways from the World Economic Forum annual shindig in Davos, Switzerland is when Saudi Finance Minister Mohammed al-Jadaan, on a panel on “Saudi Arabia’s Transformation,” made it clear that Riyadh “will consider trading in currencies other than the US dollar.” 

So is the petroyuan finally at hand? Possibly, but Al-Jadaan wisely opted for careful hedging: “We enjoy a very strategic relationship with China and we enjoy that same strategic relationship with other nations including the US and we want to develop that with Europe and other countries.” 

Second: The Central Banks of Iran and Russia are studying the adoption of a “stable coin” for foreign trade settlements, replacing the US dollar, the ruble and the rial. The crypto crowd is already up in arms, mulling the pros and cons of a gold-backed central bank digital currency (CBDC) for trade that will be in fact impervious to the weaponized US dollar. 

A gold-backed digital currency 

The really attractive issue here is that this gold-backed digital currency would be particularly effective in the Special Economic Zone (SEZ) of Astrakhan, in the Caspian Sea. 

Astrakhan is the key Russian port participating in the International North South Transportation Corridor (INTSC), with Russia processing cargo travelling across Iran in merchant ships all the way to West Asia, Africa, the Indian Ocean and South Asia. 

The success of the INSTC – progressively tied to a gold-backed CBDC – will largely hinge on whether scores of Asian, West Asian and African nations refuse to apply US-dictated sanctions on both Russia and Iran. 

As it stands, exports are mostly energy and agricultural products; Iranian companies are the third largest importer of Russian grain. Next will be turbines, polymers, medical equipment, and car parts. Only the Russia-Iran section of the INSTC represents a $25 billion business. 

And then there’s the crucial energy angle of INSTC – whose main players are the Russia-Iran-India triad. 

India’s purchases of Russian crude have increased year-by-year by a whopping factor of 33. India is the world’s third largest importer of oil; in December, it received 1.2 million barrels from Russia, which for several months now is positioned ahead of Iraq and Saudi Arabia as Delhi’s top supplier. 

 A fairer payment system’ 

Third: South Africa holds this year’s rotating BRICS presidency. And this year will mark the start of BRICS+ expansion, with candidates ranging from Algeria, Iran and Argentina to Turkey, Saudi Arabia and the UAE. 

South African Foreign Minister Naledi Pandor has just confirmed that the BRICS do want to find a way to bypass the US dollar and thus create “a fairer payment system not skewed toward wealthier countries.” 

For years now, Yaroslav Lissovolik, head of the analytical department of Russian Sberbank’s corporate and investment business has been a proponent of closer BRICS integration and the adoption of a BRICS reserve currency. 

Lissovolik reminds us that the first proposal “to create a new reserve currency based on a basket of currencies of BRICS countries was formulated by the Valdai Club back in 2018.” 

Are you ready for the R5? 

The original idea revolved around a currency basket similar to the Special Drawing Rights (SDR) model, composed of the national currencies of BRICS members – and then, further on down the road, other currencies of the expanded BRICS+ circle. 

Lissovolik explains that choosing BRICS national currencies made sense because “these were among the most liquid currencies across emerging markets. The name for the new reserve currency — R5 or R5+ — was based on the first letters of the BRICS currencies all of which begin with the letter R (real, ruble, rupee, renminbi, rand).” 

So BRICS already have a platform for their in-depth deliberations in 2023. As Lissovolik notes, “in the longer run, the R5 BRICS currency could start to perform the role of settlements/payments as well as the store of value/reserves for the central banks of emerging market economies.” 

It is virtually certain that the Chinese yuan will be prominent right from the start, taking advantage of its “already advanced reserve status.” 

Potential candidates that could become part of the R5+ currency basket include the Singapore dollar and the UAE’s dirham. 

Quite diplomatically, Lissovolik maintains that, “the R5 project can thus become one of the most important contributions of emerging markets to building a more secure international financial system.” 

The R5, or R5+ project does intersect with what is being designed at the Eurasia Economic Union (EAEU), led by the Macro-Economics Minister of the Eurasia Economic Commission, Sergey Glazyev. 

A new gold standard 

In Golden Ruble 3.0 , his most recent paper, Glazyev makes a direct reference to two by now notorious reports by Credit Suisse strategist Zoltan Pozsar, formerly of the IMF, US Department of Treasury, and New York Federal Reserve: War and Commodity Encumbrance (December 27) and War and Currency Statecraft (December 29). 

Pozsar is a staunch supporter of a Bretton Woods III – an idea that has been getting enormous traction among the Fed-skeptical crowd. 

What’s quite intriguing is that the American Pozsar now directly quotes Russia’s Glazyev, and vice-versa, implying a fascinating convergence of their ideas. 

Let’s start with Glazyev’s emphasis on the importance of gold. He notes the current accumulation of multibillion-dollar cash balances on the accounts of Russian exporters in “soft” currencies in the banks of Russia’s main foreign economic partners: EAEU nations, China, India, Iran, Turkey, and the UAE. 

He then proceeds to explain how gold can be a unique tool to fight western sanctions if prices of oil and gas, food and fertilizers, metals and solid minerals are recalculated: 

    “Fixing the price of oil in gold at the level of 2 barrels per 1g will give a second increase in the price of gold in dollars, calculated Credit Suisse strategist Zoltan Pozsar. This would be an adequate response to the ‘price ceilings’ introduced by the west – a kind of ‘floor,’ a solid foundation. And India and China can take the place of global commodity traders instead of Glencore or Trafigura.”  

So here we see Glazyev and Pozsar converging. Quite a few major players in New York will be amazed. 

Glazyev then lays down the road toward Gold Ruble 3.0. The first gold standard was lobbied by the Rothschilds in the 19th century, which “gave them the opportunity to subordinate continental Europe to the British financial system through gold loans.” Golden Ruble 1.0, writes Glazyev, “provided the process of capitalist accumulation.” 

Golden Ruble 2.0, after Bretton Woods, “ensured a rapid economic recovery after the war.” But then the “reformer Khrushchev canceled the peg of the ruble to gold, carrying out monetary reform in 1961 with the actual devaluation of the ruble by 2.5 times, forming conditions for the subsequent transformation of the country [Russia] into a “raw material appendage of the Western financial system.” 

What Glazyev proposes now is for Russia to boost gold mining to as much as 3 percent of GDP: the basis for fast growth of the entire commodity sector (30 percent of Russian GDP). With the country becoming a world leader in gold production, it gets “a strong ruble, a strong budget and a strong economy.” 

All Global South eggs in one basket 

Meanwhile, at the heart of the EAEU discussions, Glazyev seems to be designing a new currency not only based on gold, but partly based on the oil and natural gas reserves of participating countries. 

Pozsar seems to consider this potentially inflationary: it could be if it results in some excesses, considering the new currency would be linked to such a large base. 

Off the record, New York banking sources admit the US dollar would be “wiped out, since it is a valueless fiat currency, should Sergey Glazyev link the new currency to gold. The reason is that the Bretton Woods system no longer has a gold base and has no intrinsic value, like the FTX crypto currency. Sergey’s plan also linking the currency to oil and natural gas seems to be a winner.” 

So in fact Glazyev may be creating the whole currency structure for what Pozsar called, half in jest, the “G7 of the East”: the current 5 BRICS plus the next 2 which will be the first new members of BRICS+. 

Both Glazyev and Pozsar know better than anyone that when Bretton Woods was created the US possessed most of Central Bank gold and controlled half the world’s GDP. This was the basis for the US to take over the whole global financial system. 

Now vast swathes of the non-western world are paying close attention to Glazyev and the drive towards a new non-US dollar currency, complete with a new gold standard which would in time totally replace the US dollar. 

Pozsar completely understood how Glazyev is pursuing a formula featuring a basket of currencies (as Lissovolik suggested). As much as he understood the groundbreaking drive towards the petroyuan. He describes the industrial ramifications thus: 

    “Since as we have just said Russia, Iran, and Venezuela account for about 40 percent of the world’s proven oil reserves, and each of them are currently selling oil to China for renminbi at a steep discount, we find BASF’s decision to permanently downsize its operations at its main plant in Ludwigshafen and instead shift its chemical operations to China was motivated by the fact that China is securing energy at discounts, not markups like Europe.”  

The race to replace the dollar 

One key takeaway is that energy-intensive major industries are going to be moving to China. Beijing has become a big exporter of Russian liquified natural gas (LNG) to Europe, while India has become a big exporter of Russian oil and refined products such as diesel – also to Europe. Both China and India – BRICS members – buy below market price from fellow BRICS member Russia and resell to Europe with a hefty profit. Sanctions? What sanctions? 

Meanwhile, the race to constitute the new currency basket for a new monetary unit is on. This long-distance dialogue between Glazyev and Pozsar will become even more fascinating, as Glazyev will be trying to find a solution to what Pozsar has stated: tapping of natural resources for the creation of the new currency could be inflationary if money supply is increased too quickly. 

All that is happening as Ukraine – a huge chasm at a critical junction of the New Silk Road blocking off Europe from Russia/China – slowly but surely disappears into a black void. The Empire may have gobbled up Europe for now, but what really matters geoeconomically, is how the absolute majority of the Global South is deciding to commit to the Russia/China-led block. 

Economic dominance of BRICS+ may be no more than 7 years away – whatever toxicities may be concocted by that large, dysfunctional nuclear rogue state on the other side of the Atlantic. But first, let’s get that new currency going.  

Wereldwijde concurrentie voor de dollar (3)

King Dollar is facing revolt 

7 min read . Updated: 22 Dec 2022, 06:37 AM ISTBloombergThe dollar has strengthened about 7% this year, on track for its biggest annual advance since 2015 (REUTERS) 

Tired of a too-strong and newly weaponized greenback, some of the world’s biggest economies are exploring ways to circumvent the US currency. 

Tired of a too-strong and newly weaponized greenback, some of the world’s biggest economies are exploring ways to circumvent the US currency.  

Smaller nations, including at least a dozen in Asia, are also experimenting with de-dollarization. And corporates around the world are selling an unprecedented portion of their debt in local currencies, wary of further dollar strength. 

No one is saying the greenback will be dethroned anytime soon from its reign as the principal medium of exchange. Calls for “peak dollar” have many times proven premature. But not too long ago it was almost unthinkable for countries to explore payment mechanisms that bypassed the US currency or the SWIFT network that underpins the global financial system.  

Now, the sheer strength of the dollar, its use under President Joe Biden to enforce sanctions on Russia this year and new technological innovations are together encouraging nations to start chipping away at its hegemony. Treasury officials declined to comment on these developments. 

“The Biden administration made an error in weaponizing the US dollar and the global payment system,” John Mauldin, an investment strategist and president of Millennium Wave Advisors with more than three decades of markets experience, wrote in a newsletter last week. “That will force non-US investors and nations to diversify their holdings outside of the traditional safe haven of the US.” 

Bilateral Payments 

Plans already underway in Russia and China to promote their currencies for international payments, including through the use of blockchain technologies, accelerated rapidly after the invasion of Ukraine. Russia, for example, began seeking remuneration for energy supplies in rubles.  

Soon, the likes of Bangladesh, Kazakhstan and Laos were also stepping up negotiations with China to boost their use of the yuan. India began talking up more loudly the internationalization of the rupee and just this month, started securing a bilateral payment mechanism with the United Arab Emirates.  

Critical to those considerations was the move by the US and Europe to cut off Russia from the global financial messaging system known as SWIFT. The action, described as a “financial nuclear weapon” by the French, left most major Russian banks estranged from a network that facilitates tens of millions of transactions every day, forcing them to lean on their own, much smaller version instead. 

That had two implications. First, the US sanctions on Russia stoked concern that the dollar could more permanently become an overt political tool — a concern shared especially by China, but also beyond Beijing and Moscow. India, for example, has been developing its own homegrown payments system that would partly mimic SWIFT. 

Second, the US decision to use the currency as part of a more aggressive form of economic statecraft puts extra pressure on economies in Asia to choose sides. Without any alternative payments system, they’d run the risk of being compelled into compliance with, or enforcement of, sanctions they may not agree with — and losing out on trade with key partners.  

“The complicating factor in this cycle is the wave of sanctions and seizures on USD holdings,” said Taimur Baig, managing director and chief economist at DBS Group Research in Singapore. “Given this backdrop, regional steps to reduce USD reliance are unsurprising.”  

Just as officials across Asia are loath to pick a winner in US-China tussles and would prefer to keep relations with both, the US penalties on Russia are pushing governments to go their own way. Sometimes the action takes a political or nationalist tone — including resentment of Western pressure to adopt sanctions on Russia.  

Moscow looked to convince India to use an alternative system to keep transactions moving. Myanmar’s junta spokesman said the dollar was being used to “to bully smaller nations.” And Southeast Asian countries pointed to the episode as a reason to trade more in local currencies.  

“Sanctions make it more difficult – by design – for countries and companies to remain neutral in geopolitical confrontations,” said Jonathan Wood, head of global risk analysis at Control Risks. “Countries will continue to weigh economic and strategic relationships. Companies are caught more than ever in the crossfire, and face ever more complex compliance obligations and other conflicting pressures.” 

It’s not just the sanctions helping to accelerate the de-dollarization trend. The US currency’s rampant gains have also made Asian officials more aggressive in their attempts at diversification.  

The dollar has strengthened about 7% this year, on track for its biggest annual advance since 2015, according to a Bloomberg index of the dollar. The gauge reached a record high in September as dollar appreciation sent everything from the British pound to the Indian rupee to historic lows.  

Huge Headache 

The dollar’s strength is a huge headache for Asian nations who’ve seen prices of food purchases soar, debt-repayment burdens worsen and poverty deepen.  

Sri Lanka is a case in point, defaulting on its dollar debt for the first time ever as a soaring greenback crippled the nation’s ability to pay up. Vietnamese officials at one point blamed dollar appreciation for fuel-supply struggles. 

Hence moves such as India’s deal with the UAE, which accelerates a long-running campaign to transact more in the rupee and to set up trade settlement agreements that bypass the US currency. 

Meanwhile, dollar-denominated bond sales by non-financial companies have dropped to a record low 37% of the global total in 2022. They’ve accounted for more than 50% of debt sold in any one year on several occasions in the past decade. 

While all these measures may have a limited market impact short term, the end result may be an eventual weakening of demand for the dollar. The Canadian dollar and Chinese yuan’s shares of all currency trades, for instance, are already slowly edging higher.  

Technological progress is another factor facilitating efforts at moving away from the greenback.  

Several economies are chipping away at dollar use as a by-product of efforts to build new payment networks — a campaign that pre-dates the surging greenback. Malaysia, Indonesia, Singapore and Thailand have set up systems for transactions between each another in their local currencies rather than the dollar. Taiwanese can pay with a QR code system that’s linked with Japan. 

All-in, the efforts are driving momentum further away from a West-led system that’s been the bedrock for global finance for more than half a century. What’s emerging is a three-tier structure with the dollar still very much on top, but increasing bilateral payment routes and alternative spheres such as the yuan that seek to seize on any potential US overreach. 

And for all the agitation and action afoot, it’s unlikely the dollar’s dominant position will be challenged anytime soon. The strength and size of the US economy remains unchallenged, Treasuries are still one of the safest ways to store capital and the dollar makes up the lion’s share of foreign-exchange reserves. 

The renminbi’s share of all foreign-exchange trades, for example, may have climbed to 7%, but the dollar still makes up one side of 88% of such transactions. 

“It’s very hard to compete on the fiat front — we have the Russians doing that by forcing the use of rubles, and there’s wariness with the yuan as well,” said George Boubouras, three-decade markets veteran and head of research at hedge fund K2 Asset Management in Melbourne. “At the end of the day, investors still prefer liquid assets and in this sense, nothing can replace the dollar.” 

Nevertheless, the combination of moves away from the dollar are a challenge to what then-French Finance Minister Valéry Giscard d’Estaing famously described as the “exorbitant privilege” enjoyed by the US. The term, which he coined in the 1960s, describes how the greenback’s hegemony shields the US from exchange-rate risk and projects the nation’s economic might. 

And they may ultimately test the entire Bretton Woods model, a system that established the dollar as a leader in the monetary order, which was negotiated at a hotel in a sleepy New Hampshire town at the close of World War II.  

The latest efforts “do indicate that the global trade and settlement platform that we’ve been using for decades may be beginning to fracture,” said Homin Lee, Asia macro strategist at Lombard Odier in Hong Kong, whose firm oversees the equivalent of $66 billion. 

“This entire network that was born out of the Bretton Woods system — the Eurodollar market in the 1970s and then the financial deregulation and the floating rates regime in the 1980s — this platform that we have developed so far may be beginning to shift in a more fundamental sense,” Lee said. 

Valuable Lesson 

The net result: King Dollar may still reign supreme for decades to come, but the building momentum for transactions in alternate currencies shows no sign of slowing — particularly if geopolitical wild cards continue to convince officials to go their own way.  

And the US government’s willingness to use its currency in geopolitical fights could ironically weaken its ability to pursue such methods as effectively in the future.   

“The war in Ukraine and the sanctions on Russia will provide a very valuable lesson,” Indonesian Finance Minister Sri Mulyani Indrawati said last month at the Bloomberg CEO Forum on the sidelines of the G-20 meetings in Bali.  

“Many countries feel they can do transactions directly — bilaterally — using their local currencies, which I think is good for the world to have a much more balanced use of currencies and payment systems.” 

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